CORPORATE GOVERNANCE
QUESTION 1
Answer (a), (b), and (c)
(a) Critically evaluate the moves towards a global corporate governance code.
(10 marks)
(b) Outline the main codes in operation.
(10 marks)
(c) Discuss the reasons for differences in corporate governance codes in the first place.
(20 marks)
Total (40 marks)
QUESTION 2
Answer both (a) and (b)
(a) Critically evaluate the need for the Sarbanes-Oxley Act in the United States of
America in the aftermath of the collapse of Enron indicating major reasons for its
introduction.
(20 marks)
(b) Discuss the contrasting views on whether the Act has been successful in addressing
the need for the Act.
(20 marks)
Total (40 marks)
QUESTION 3
Critically evaluate the UK’s approach to corporate governance including an outline of the
essential features of the approach with an analysis of the benefits associated with the adoption
of such an approach. Your answer should include examples of companies who have complied
with the UK’s approach to corporate governance and examples of companies who have not
complied.
(40 marks)
QUESTION 4
Answer both (a) and (b)
There are various agency relationships which exist in a company.
(a) Critically evaluate what you consider to be the key agency relationships in a
company.
(15 marks)
(b) Outline and assess the different methods which you have studied that can be used to
overcome potential problems in these relationships.
(25 marks)
Total (40 marks)
QUESTION 5
Agency relationships are an inevitable consequence of having a public limited company.
Critically analyse the agency relationships that exist in public limited companies and outline
and critically appraise the methods that can be utilised in order to overcome potential
problems in these relationships.
(40 marks)
QUESTION 6
(i) Explain agency theory, and how it relates to corporate governance.
(18 marks)
(ii) Identify and critically analyse the ELEVEN core principles of corporate governance.
(22 marks)
Total (40 marks)
QUESTION 7
(i) Identify and critically analyse FOUR roles of non-executive directors.
(16 marks)
(ii) Identify SIX corporate governance disclosures that should be included within the
annual Report and explain their significance.
(24 marks)
Total (40 marks)
QUESTION 8
(i) Outline and critically analyse the factors which are required to ensure that the internal
audit function operates effectively.
(20 marks)
(ii) Identify and critically discuss TEN ways in which risk could be classified for any
commercial organisation.
(20 marks)
Total (40 marks)
QUESTION 9
The collapse of Enron in 2001 resulted in the enactment of the Sarbanes-Oxley Act in the
United States of America. Critically evaluate the need for the Sarbanes-Oxley Act and
discuss whether you believe that the Act has been successful in addressing the need for the
Act.
(40 marks)
QUESTION 10
Critically evaluate the key agency relationships in a company and outline and assess the
different methods which you have studied that can be used to overcome potential problems in
these relationships
(50 marks)
QUESTION 12
The Sarbanes-Oxley Act (SOX) introduced a series of corporate governance initiatives into
the federal securities laws which represented not just a considerable change in law but also a
departure in the mode of regulation. The federal regime had until then consisted of disclosure
requirements, rather than substantive corporate governance mandates.
Critically evaluate the need for the Sarbanes-Oxley Act in the United States of America in the
aftermath of the collapse of Enron and Worldcom Inc, highlighting its significant changes. In
addition discuss whether you believe that the Act has been successful in addressing that need.
(50 marks)
QUESTION 13
There have been a number of corporate governance reports in the UK, which essentially
recommend the retention of the UK’s ‘comply or explain’ approach.
The UK Code has been described as the global model of corporate best practice. Critically
evaluate the ‘comply or explain’ approach under the UK Combined Code. In your answer
you should assess the key aspects of the Code.
(50 marks)
QUESTION 14
Critically discuss the role of a stakeholder and outline each of the main stakeholders and their
respective interests.
(50 marks)
QUESTION 15
Critically evaluate the need for the Sarbanes-Oxley Act in the United States of America in the
aftermath of the collapse of Enron and discuss whether you believe that the Act has been
successful in addressing the need for the Act.
(50 marks)
QUESTION 16
Ethical sourcing and supply chain management can be a major problem for business today.
Critically analyse the problems companies encounter in ethical sourcing and supply chain
management and put forward your own suggestions as to how companies might aim to solve
these problems.
(50 marks)
QUESTION 17
Critically evaluate the moves towards a global corporate governance code with an outline of
the main codes in operation and discuss the reasons for differences in corporate governance
codes in the first place.
(50 marks)
QUESTION 18
Many people would argue that there is no such thing as Business Ethics. They would say that
business only exists to be profitable and if there is a conflict between choosing to behave
ethically and making profit, profit will always take precedence.
(a) Outline your argument to support the case for ethical behaviour in business.
(40 marks)
(b) Does ethical behaviour guarantee success for a company? Explain your answer with
reasons.
(10 marks)
Total (50 marks)
QUESTION 19
You are the Legal Counsel for a software company which intends to obtain a stock exchange
listing and as a consequence there is a requirement to improve the corporate governance of
the company. One step it is taking is setting up an audit committee. The directors are
currently interviewing two potential non-executive directors and have been asking your views
of what the responsibilities of non-executive directors and the audit committee should be.
Applicant 1 stated on her applicant’s statement that she had read about media criticism of
nonexecutive directors in the wake of many corporate scandals and shared the view of British
entrepreneur Tiny Rowland that they have in the past been no more than ‘a bauble on a
Christmas Tree’. In her opinion non-executive directors were ‘guardian angels’ and as a result
they should adopt an uncompromisingly ethical approach to all their duties, particularly their
work on the audit committee.
However, Applicant 2 stated that such quotes in the press were no more than ‘paper talk’ and
that their impact was much more widespread than this would suggest: ‘in the real world’ away
from politics, non-executive directors had to be primarily responsible for promoting the
company’s interests – the job of directors was to direct the company towards maximising its
profits. The bigger the profits, the greater the benefits are to more people.
Required:
Discuss and critically analyse the potential problems associated with recruiting non-executive
directors and critically discuss how these might be avoided. Reference should be made to the
views of the two Applicants i.e. Applicant A and Applicant B.