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Corporate governance failure is an existential business risk. Recent decades have witnessed a number of high-profile corporate failures worldwide, such examples include Enron, Worldcom, Royal Bank of Scotland, Satyam. Causes of corporate governance failure are varied, yet the consequences have a far-reaching impact. In this assessment, you should reflect on the relationship between the aspects of corporate governance we have considered in this course, and their role in corporate governance failure. You are required to discuss and evaluate ALL of the following topics relating to corporate governance failure. In your answer you should make reference to academic journal articles and relevant case studies.

Question 1
A large proportion of privately held companies have family involvement, in terms of both ownership and management. Some literature finds that family ownership helps to enhance monitoring mechanisms and consequently improves firm performance. Family firms are not motivated to pursue short-term objectives and tend to prioritize succession planning, thus implying that there is a positive relationship between family ownership and business ethical awareness (Arregle et al. 2007). However, despite the benefits of family ownership, problems may still exist. Family firms are characterized by trust among family members, and such trust can always be exploited by dishonest family members. Furthermore, trust may enable family firms to have less strict controls in place. In addition, as firms grow, there may be a need to bring in outside investors, this may result in conflicts of interest between family members and non-family shareholders. Similarly, conflicts may also arise between family members, for example, as a result of generational differences. Factors such as these, may contribute towards corporate governance failure (Sacristan-Navarro & Cabeza-Garcia, 2020)

Required: Evaluate the role of family ownership in corporate governance failure, you should make reference to Sacristan-Navarro & Cabeza-Garcia (2020) and the case of El Corte Ingles.

Question 2
The Cadbury Code was introduced in the UK in 1992. Its subsequent evolution into the UK Corporate Governance Code has seen numerous changes encompassing aspects such as board and committee roles, executive remuneration, board diversity, and risk. Despite these changes, the UK has seen several high-profile corporate governance failures such as Carrillion, British Steel, and Patisserie Valerie. Failures such as these prompt debate about the nature of the corporate governance framework in the UK and the effectiveness of the Code.

Required: Evaluate the extent to which corporate governance reforms such as the UK Corporate Governance code 2018 influence corporate governance failure. You should make reference to the paper by Elsayed et al (2022).

Question 3
The U.S. Statement on Auditing Standards (SAS) No. 82 identifies two types of corporate fraud: financial reporting fraud and misappropriation of assets. In terms of financial reporting fraud, it refers to management behavior that seeks to inflate reported profits or other assets by deliberately overstating assets and revenues or understating expenses and liabilities in financial statements (Rezaee, 2005).

Required: Explore different types of fraudulent techniques/methods that firm managers may use to manipulate the firm’s financial reporting and mislead investors.

Question 4
Internal governance mechanisms including board of directors, board sub-committees, board of supervisors play an important role in mitigating the principal–agent conflicts (Hu et al., 2010). Previous corporate board studies have paid attention to the efficacy of boards of directors in fulfilling their monitoring and advisory roles and their influence on corporate governance. For instance, Uzun et al. (2004) find that board composition and the structure of a board’s oversight committees are significantly correlated with the incidence of corporate scandals. Xiang and Zhu (2020) highlight the important role played by academic independent directors on improving financial reporting quality. In addition, CEOs and other board members of firms committing scandals often receive lower compensation (Conyon & He, 2016).

Required: Examine how different board characteristics affect the occurrence of corporate scandals. You should make reference to the paper by Uzun et al. (2004).

Question 5
An increasingly important external control mechanism affecting corporate governance worldwide has emerged with the rise of the influence of institutional investors as equity owners (Huyghebaert & Wang, 2012). However, the recent empirical findings are mixed. On one hand, Pucheta‐Martínez & García‐Meca (2014) find that institutional directors are effective as monitors of management, which leads to higher corporate financial reporting quality. On the other hand, Burns et al. (2010) find that different types of institutional investors have different impact on the occurrence of financial misreporting.

Required: Critically evaluate the role of institutional ownership in the occurrence of corporate scandals. You should at least make reference to Pucheta‐Martinez & Garcia‐Meca (2014) paper.

Question 6
Corporate social responsibility (CSR) has received increasing attention from the general public, policy makers, and academic researchers in recent decades, and the discussion on why firms engage in socially responsible activities is ongoing. Some researchers argue that CSR engagement represents a sincere managerial commitment to ethical behaviors. Subsequently, socially responsible firms are less likely to manipulate earnings (Kim et al. 2012). However, Li et al. (2021) argue that fraudulent firms strategically adjust their CSR performance to cover up their fraudulent financial activities.

Required: Critically discuss why firms especially those firms committed corporate scandals engage in CSR practices? You should at least make reference to Li et al. (2021) paper.

Question 7
Required: Reflecting of your answers above, identify the key factors which contribute to corporate governance failure.

Sample Answer

Compelling correspondence is essential to the achievement all things considered but since of the changing idea of the present working environments, successful correspondence turns out to be more troublesome, and because of the numerous impediments that will permit beneficiaries to acknowledge the plan of the sender It is restricted. Misguided judgments.In spite of the fact that correspondence inside the association is rarely completely open, numerous straightforward arrangements can be executed to advance the effect of these hindrances.

Concerning specific contextual analysis, two significant correspondence standards, correspondence channel determination and commotion are self-evident. This course presents the standards of correspondence, the act of general correspondence, and different speculations to all the more likely comprehend the correspondence exchanges experienced in regular daily existence. The standards and practices that you learn in this course give the premise to additionally learning and correspondence.

This course starts with an outline of the correspondence cycle, the method of reasoning and hypothesis. In resulting modules of the course, we will look at explicit use of relational connections in close to home and expert life. These incorporate relational correspondence, bunch correspondence and dynamic, authoritative correspondence in the work environment or relational correspondence. Rule of Business Communication In request to make correspondence viable, it is important to follow a few rules and standards. Seven of them are fundamental and applicable, and these are clear, finished, brief, obliging, right, thought to be, concrete. These standards are frequently called 7C for business correspondence. The subtleties of these correspondence standards are examined underneath: Politeness Principle: When conveying, we should build up a cordial relationship with every individual who sends data to us.

To be inviting and polite is indistinguishable, and politeness requires an insightful and amicable activity against others. Axioms are notable that gracious “pay of graciousness is the main thing to win everything”. Correspondence staff ought to consistently remember this. The accompanying standards may assist with improving courtesy:Preliminary considering correspondence with family All glad families have the mystery of progress. This achievement originates from a strong establishment of closeness and closeness. Indeed, through private correspondence these cozy family connections become all the more intently. Correspondence is the foundation of different affiliations, building solid partners of obedient devotion, improving family way of life, and assisting with accomplishing satisfaction (Gosche, p. 1). In any case, so as to keep up an amicable relationship, a few families experienced tumultuous encounters. Correspondence in the family is an intricate and alluring marvel. Correspondence between families isn’t restricted to single messages between families or verbal correspondence.

It is a unique cycle that oversees force, closeness and limits, cohesiveness and flexibility of route frameworks, and makes pictures, topics, stories, ceremonies, rules, jobs, making implications, making a feeling of family life An intelligent cycle that makes a model. This model has passed ages. Notwithstanding the view as a family and family automatic framework, one of the greatest exploration establishments in between family correspondence centers around a family correspondence model. Family correspondence model (FCP) hypothesis clarifies why families impart in their own specific manner dependent on one another ‘s psychological direction. Early FCP research established in media research is keen on how families handle broad communications data. Family correspondence was perceived as an exceptional scholastic exploration field by the National Communications Association in 1989. Family correspondence researchers were at first impacted by family research, social brain science, and relational hypothesis, before long built up the hypothesis and began research in a family framework zeroed in on a significant job. Until 2001, the primary issue of the Family Communication Research Journal, Family Communication Magazine, was given. Family correspondence is more than the field of correspondence analysts in the family. Examination on family correspondence is normally done by individuals in brain science, humanism, and family research, to give some examples models. However, as the popular family correspondence researcher Leslie Baxter stated, it is the focal point of this intelligent semantic creation measure making the grant of family correspondence special. In the field of in-home correspondence, correspondence is normally not founded on autonomous messages from one sender to one beneficiary, yet dependent on the dynamic interdependency of data shared among families It is conceptualized. The focal point of this methodology is on the shared trait of semantic development inside family frameworks. As such, producing doesn’t happen in vacuum, however it happens in a wide scope of ages and social exchange.

Standards are rules end up being followed when performing work to agree to a given objective. Hierarchical achievement relies significantly upon compelling correspondence. So as to successfully impart, it is important to follow a few standards and rules. Coming up next are rules to guarantee powerful correspondence: clearness: lucidity of data is a significant guideline of correspondence. For beneficiaries to know the message plainly, the messages ought to be sorted out in a basic language. To guarantee that beneficiaries can without much of a stretch comprehend the importance of the message, the sender needs to impart unmistakably and unhesitatingly so the beneficiary can plainly and unquestionably comprehend the data.>

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