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Question		Answer
Remuneration committee role 3 start learning		To have an appropriate reward policy, \| that attracts and motivates directors, \| to achieve the long-term interest of shareholders.
NEDs remuneration characteristic: 3 start learning		Consist of a basic salary and sometimes share awards \| equity-based remuneration should be fully vested on the grant date, but still subject to applicable holding periods \| performance measures remuneration not generally supported
Remuneration - Company strategy dependence 3 start learning		Amount depends on company resources. \| Remuneration levels in comparable companies. \| Conditions throughout the company. 1) e.g. cash for bonuses
Remuneration level is determined by: 2+2 start learning		Job description. \| Significant proportion based on performance related elements. \| Not too small – could lead to lack of motivation and underachievement \| Not to easily earned to ensure that directors to improve performance to attract and possibly motivate if increase with performance
Institutional shareholder intervention due to strategy - examples of concerns: 3 start learning		products sold. \| markets serviced. \| expansion developing.
Institutional shareholder intervention due to Internal controls examples 3 start learning		failure in health and safety. \| quality control. \| budgetary control.
Institutional shareholder intervention due to Operational performance start learning		in terms of divisions within the corporate structure that have persistently under-performed.
Institutional shareholder intervention due to Remuneration policy might relate to...? 2 start learning		to a failure of the remuneration committee. \| to self-serving executive rewards. self-serving - wyrachowany
Institutional shareholder intervention due to Acquisitions and disposal start learning		When executive decisions that have been inadequately challenged by NEDs.
Institutional shareholder intervention due to Succession planning 2 start learning		A failure to adequately balance board composition. \| Or recommendation of replacement executives without adequate quality of the candidate.
Institutional shareholder intervention due to Social responsibility example: 1 start learning		A failure to adequately protect to instances of environmental contamination.
Sustainable development 2 start learning		development that meets the needs of the present, \| without compromising the ability of future generations.
Sustainability is an attempt to provide the...? 3 start learning		_the best outcomes \| for the human and natural environments \| both now and into the indefinite future.
Environmental footprint – an attempt to evaluate the size of a company’s impact on the environment in 3 respects: 3 start learning		Consumption of resources. \| Pollution emissions impact on environment. \| Measurement of both in terms of harm to the environment.
Social footprint – evaluates sustainability in three areas: 3 start learning		Human capital. \| Social capital. \| Constructed capital
Social footprint - Human capital 3 start learning		Peoples health, \| Skills, \| Motivation. to take effective action.
Social footprint - Social capital basics: 3 start learning		Networks of people.\| The mutually-held knowledge and skills... \| _they have in order to take effective action.
Social footprint - Constructed capital examples: 4 start learning		tools \| technologies \| roads \| infrastructures. _that people produce and use in order to take effective action.
Environmental reporting - generic meaning start learning		The disclosure of information on environment related issues and performance by an entity.
Environmental reporting typically contains details of environmental performance in areas such as: 2 start learning		Measures of emissions. \| Consumption of resources. Like pollution, waste and greenhouse gases. \| Such as energy, water and non-renewable mineral deposits.
Drawback of social and environmental reporting 2 start learning		Additional cost of reporting systems \| ambiguity of measures used
Integrated reporting demonstrates the linkages between...? 2 start learning		_between an organisation’s governance \| and the social and environmental context within which it operates.
Integrated reporting can help business to take...? 2 start learning		To take more sustainable decisions. \| To enable investors and other stakeholders to understand how an organisation is really performing.
Integrated reporting should be a single report which is not...? start learning		IR is not mandatory in most jurisdictions. An integrated report could contain FS information, in which case the IR would fulfil statutory requirements whilst containing lots of other stuff that might be reasonable and useful... or which might be a waste of paper.
Central to Integrated Reporting is the challenge facing organisations to create and...? start learning		_sustain value in the short, medium and longer term.
An integrated report is a concise communication about...? 3 start learning		_about how an organisation’s governance, \| in the context of its external environment, \| lead to the creation of value.
Social capital examples: 3 start learning		Institutions such as families \| communities \| businesses.
Natural capital 2 start learning		Natural resources. \| Also the capacity of the world’s carbon sinks — (forests and oceans) — to absorb the waste generated by economic activity. 1. E.g. iron ore, water, oil
Manufactured capital start learning		Material goods or fixed assets which contribute to the production process rather than being the output itself – e.g. tools, machines and buildings.
Intellectual capital 4 BRRE start learning		Brands. \| R&D. \| Reputation. \| External relationships. Proprietary information, also known as a trade secret, is information a company wishes to keep confidential. It may can include secret formulas, processes. It can also include a company's business and marketing plans, salary structure or customer lists.
IR - Annual and intercompany comparability start learning		The information in the integrated report should be presented on a basis that is consistent over time and in the way that it enables comparison with other organisations.
IR – Orientation to future and strategy. Highlighting...? start learning		Highlighting significant risks and opportunities flowing from the organisation’s market position and business model.
IR – Stakeholder relationship 1 start learning		It should provide insight into quality of the organisation’s relationships with its key stakeholders.
IR – Materiality 1 start learning		Identifying matters with ability to affect value creation.
IR - Conciseness (Shortness) 3 start learning		Should give sufficient context, \| to understand the organisation’s strategy and prospects \| without being burdened by less relevant information.
Reliability and completeness. IR should include all material matters, both...? start learning		_both positive and negative, in a balanced way.
AIDA model The AIDA Model identifies cognitive stages an individual goes through during the buying process for a product or service. It's a purchasing funnel where buyers go to and fro at each stage, to support them in making the final purchase. start learning		Awareness \| Interest \| Desire \| Action
Integrated reporting - value creation process 3 start learning		Value is created through a business model, \| which takes inputs from the capitals and transforms them into outputs. \| Over time it creates (or destroys) value for its stakeholders.
Who should implement a sound system of internal controls? start learning		Directors
Who is ultimately responsible for internal control system? start learning		CEO
Who advise on establishing and monitoring internal controls? start learning		External auditors
Who need to establish specific internal control for each business unit? start learning		Heads of business units
Who need to evaluate the effectiveness of internal controls and recommend improvements? start learning		Internal auditors
Who need to set corporate governance policy in respect of internal control procedures? start learning		Board of directors
What stakeholders are involved in risk management and internal control? start learning		CEO \| Board of directors \| Risk committee \| Executive management \| Internal auditors \| Unit heads \| All employees \| External auditors
The aim of Controls start learning		Attempt to ensure that risks are minimised
Internal control system definition: 3 start learning		Network of systems established in an organisation to provide reasonable assurance \| that organisational objectives will be achieved Network of systems \| to provide reasonable assurance \| organisational objectives.
Internal management control start learning		Procedures and policies in place to ensure that company objectives are achieved.
Internal control system objectives: 3 start learning		Safeguarding assets. \| Prevention and detection of fraud and errors. \| Accuracy and completeness of accounting records.
Internal control system benefits: 3 start learning		Effectiveness of operations. \| Reliability of financial reporting \| Compliance with law
Sound internal control system characteristics: 3 start learning		Embedded within operations. \| Able to respond to changing risks. \| Procedures for reporting control weaknesses.
Environment of controls Internal control systems by COSO start learning		‘Tone at the top’ or the ethics and culture of the organisation. Set by management philosophy and style.
Risk assessment procedure. 3 \| Internal control systems by COSO start learning		Set objectives of organisation. \| Then for each objective, identify and assess the risk affecting that objective. \| Distinguish between controllable and uncontrollable risks.
Activities of control Internal control systems by COSO start learning		Policies and procedures ensuring instructions of management are carried out.
Information and communication 2 \| Internal control systems by COSO start learning		Communicate correct information to correct people. \| Need internal and external information systems.
Monitoring is a ....... Normally doing by ...? 2 \| Internal control systems by COSO start learning		Control of controls \| normally by internal audit function.
Strategic level management responsibilities for internal control and risk. 3 start learning		Monitoring organisation as a whole. \| Reviewing IC systems. \| Assess the risk outcomes of different decisions.
Tactical level management responsibilities for internal control and risk 3 start learning		Implement strategic decisions. \| Inform strategic managers of control weaknesses. \| Advise them on risks identified.
Operational level management responsibilities for internal control and risk. 3 start learning		Identify risks at operational level. \| Report weaknesses to tactical managers. \| Controlling day-to-day operations.
Time period Information characteristic for STRATEGIC level start learning		Forecast
Timeliness Information characteristic for STRATEGIC level start learning		Delayed
Objectivity Information characteristic for STRATEGIC level start learning		Subjective
Quantifiability Information characteristic for STRATEGIC level start learning		Qualititative
Accuracy Information characteristic for STRATEGIC level start learning		Approximate
Certainty Information characteristic for STRATEGIC level start learning		Uncertain
Completeness Information characteristic for STRATEGIC level start learning		Partial
Breadth Information characteristic for STRATEGIC level start learning		Broad
Detail Information characteristic for STRATEGIC level start learning		Little detail
Time period Information characteristic for Operational level start learning		Historical
Timeliness Information characteristic for OPERATIONAL level start learning		Immediately available
Objectivity Information characteristic for OPERATIONAL level start learning		Objective
Quantifiability Information characteristic for OPERATIONAL level start learning		Quantitative
Accuracy Information characteristic for OPERATIONAL level start learning		Accurate
Certainty Information characteristic for OPERATIONAL level start learning		Certain
Completeness Information characteristic for OPERATIONAL level start learning		Complete
Breadth Information characteristic for OPERATIONAL level start learning		Specific
Detail payments Information characteristic for OPERATIONAL level start learning		Highly detailed
Risk management strategy needs to be develop for frauds. This strategy should include three key elements: 3 start learning		Fraud prevention \| Fraud detection \| Fraud response fraud detection - e.g. performing regular checks, stocktaking or cash counts.
Fraud prevention examples: CAWS start learning		An anti-fraud culture \| Risk awareness \| Whistleblowing \| Sound IC systems
Organisations response to fraud: 3 start learning		Internal action, in accordance with personnel policies \| Civil litigation for the recovery of loss \| Criminal prosecution through the police
Factors affecting the need for internal audit: 3 start learning		Scale and complexity of company activities \| Increase in unacceptable events. \| Changes in key risks.
It is now common for companies to use a combination of push and...? start learning		and pull systems.
Disclosure – general principles 3 start learning		AGM is the opportunity to communicate with shareholders. \| Annual report only legally-required information to shareholders and other stakeholders. \| Mechanism which gives the transparency to the governance. AGM is the most important, perhaps only opportunity for the directors to communicate with shareholders.
Organisational risks example: start learning		the organisation is too moribund and too slow to respond to developments in the market. moribund - chylący się ku upadkowi
Inadequate system risk example: start learning		management information inaccurate and out-of-date.
Fraud risks example: start learning		theft of cash or inventory.
Probity risk example: start learning		an employee acts unethically and the company’s reputation is damaged.
Reputational risk example: start learning		products get a name for being unreliable so the company’s reputation is damaged.
Synergy risk example: start learning		Mergers and acquisitions.
Conflict of interest definition: 2 start learning		Situation in which an individual has compromised independence because of another countervailing interest which may or may not be declared. compromised independence \| countervailing interest (wyrównawczy) Shareholders have the right to expect each NED to act wholly in the shareholder's interest. Any other factors that might challenge this sole fiduciary duty are likely to give rise to a conflict of interest. Risk that NED take own personal benefits first.
Discuss the ways in which CSR and the ethical stance might differ between non-profit and a commercial business. 3 start learning		Strategic purpose. \| Measures of success. \| Directors and staff attitude to financial benefits.
Four roles of nomination committee: 4 start learning		Policy determination. \| Each directors is rewarded for individual contribution. \| Annual disclosures to shareholders with remuneration breakdown for each individual with explanation. \| Law and voluntary code compliance ensuring.
Eco-Management and Audit Scheme (EMAS) is a management instrument to? 3 start learning		Evaluate, \| Report, \| and Improve organizations environmental performance.
What is the main use of EMAS? Eco-Management and Audit Scheme start learning		Use the EMAS registration to demonstrate to customer, suppliers and investors your commitment to environmental care and improvement. commitment to environmental care
ISO for international standards on environmental management: start learning		ISO 14000
ISO 14000 main use: 3 start learning		Guidance on the development of environmental management systems. \| Guidance on environmental auditing. \| Coverage of life-cycle issues.
Triple bottom line accounting elements. 3 start learning		Profit, Planet, People. 3P Profit: nothing new here as this is the traditional reporting of financial performance.
Planet: Triple bottom line accounting (3Ps) start learning		It deals with environmental and sustainability issues, sometimes known as the organisation’s environmental footprint.
People 2 \| Triple bottom line accounting (3Ps) start learning		Metrics can include reporting on the ethnic and gender composition. \| Comparisons of the wages between different groups. It deals with social issues.
Business case shows: 2 start learning		How profits can be increased (in a profit-seeking organisation). \| How service levels could be improved in a not-for-profit organisation.
The business case techniques examples: 3 start learning		Cost-benefit analysis. \| NPV. \| Decision tree.
The project benefits really begin to be more easily dealt with once they change from...? start learning		_from measurable to quantifiable. Because predictions are needed for DCF calculations.
Project drift 2 start learning		The objectives and deliverables of the project are never really well defined \| or keep changing.
The project sponsor can be regarded as a person to whom... 2 start learning		to whom the project belongs \| and very often is a person or department which is providing the funding. The person or department who wants the project to be undertaken.
The project manager responsibilities? 3 start learning		_day-to-day responsibilities \| for looking after the progress of the project \| and in particular he will be looking after a project team.
The project manager useful abilities: 3 start learning		Technical ability. \| Negotiation ability. \| Reporting on progress and difficulties.
Post-implementation review characteristics. start learning		This is about what the project achieved. If the project has delivered anything of sufficient value.
Difference in make-up of AC and RmC against Nomination Committee and Risk Management Committee?. start learning		Nomination committee and Remuneration Management Committee should comprise majority of NEDs. In contrast to AC and RmC only Neds.
Risk Management Committee report to...? start learning		the Board. RC B
Risk manager report to...? start learning		Risk Management Committee. Chief internal auditor (CIA) report to the Audit committee.
Operational risks are managed at ...... level. start learning		At risk management level (not necessarily board level).
Improvement sharing clause. start learning		In the licensing contract it will ensure that patented technology will be improved and perfected with several manufacturers.
Voluntary disclosures are the way of... start learning		of redressing the information asymmetry that exist between management and investors.
Voluntary disclosures benefits: 3 start learning		Fuller picture of the company. \| Annual report more forward looking (predictive). \| Enable the company to address specific shareholder concerns as they arise (such as responding to negative publicity).
Nomination committee report to...? start learning		The Board. NC B

SBL 3

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