P92 Chapter 2

Question 1

Main functions of Management in Financial Sector (Soft as oppose to Hard)

Answer 1

Focus on interplay between organization as a corporate entity, its employees, and external environment (customers, public, government), etc…

Question 2

Board of Directors

Answer 2

Selected from members of the shareholders - elect a chairman as well - Types of directors - executive (full time) CEO runs the business - Non-executive - Part time

Question 3

Responsibilities of the board

Answer 3

For insurance - underwriting strategy - most important

Concerned with broad interests of shareholders and staff - does not take part in daily running and managing - tells management team the strategy and they put it into affect

Question 4

Compliance with corporate governance requirements

Answer 4

How companies especially public are controlled internally - UK Corporate Governance Code

Question 5

Senior Executives

Answer 5

All members have a cabinet responsibility to propose developments - decide which matters are for board or CEO

Question 6

CEO/Managing Director

Answer 6

Link between board and management - is a director but also sees the day to day activities of company

Question 7

Finance Director

Answer 7

Also called Chief Financial Officer - Normally member of senior executive team and sometimes a director of company

Question 8

Responsibilities of the Finance Director

Answer 8

• Economic capital model to assist appropriate level of capital for company to hold
• Risk management
  etc. …

Question 9

Company Secretary

Answer 9

Companies Act 2006 requirement - Roles go over later in chap 4

Question 10

Chief Actuary

Answer 10

Responsible for -

Pricing, calculation of claims reserves, risk-based capital requirements, risk of funds, etc…

Question 11

Business Components

Answer 11

Physical Resources - all assets use - office space, IT, telecoms, websites, etc…

Financial Resources - funds available to carry day to day functions - cash, bank loans, share capital, etc..

Human Resources - People

Question 12

Supervisors/Team Leaders (key areas of focus)

Answer 12

First line manager - Need to focus on

1. The task
2. The Team
3. The individual

Question 13

Norms

Answer 13

Behavior that is acceptable to the organization - dress standard - use of first names - standards, etc..

Question 14

Beliefs and Values

Answer 14

What your company and individuals stand for

Question 15

Management styles

Answer 15

Behavior of managers - open door? autocratic? etc..

Question 16

Open Door

Answer 16

Mangers are approachable to staff at all times

Question 17

Autocratic

Answer 17

Power and control lies with a single person, usually Chief Executive

Question 18

Paternalistic

Answer 18

Looks after employees in a fatherly way, respect managers in way children respects parents - perceived as too interfering

Question 19

militaristic/hierarchical

Answer 19

structured in formal way with a clear job demarcation

Question 20

democratic/consultative

Answer 20

decisions are taken with a prior reference to as many staff members as possible