Define Corporate Governance And Evaluate Its Role And Function In The Effective Management: Corporate Governance & Accountability Assignment, NUI, Ireland

Learning Outcomes

1. Define Corporate Governance and evaluate its role and function in the effective management and control of organizations and the resources for which they are accountable

2. Compare and contrast the various mechanisms for the enforcement of Corporate Governance

3. Demonstrate the application of professional values and judgment through an ethical framework that is in the best interests of business, society, and the environment, and in compliance with relevant laws and regulations.
Aplomb Plc Case Study:

Aplomb Ple (Aplomb) has been trading for 20 years selling financial products and has very recently become a stock exchange listed company in the U.K.

Billy Boorman was recently appointed as the chairman of Aplomb and he was the chief executive of the company for the previous 10 years. Aplomb currently has a board of directors that has throe non-executive directors among the eight board members. Billy is considering appointing one of his close friends as a non-executive director. It is a retired chief executive of a manufacturing company.

The finance director is responsible for determining the amount of remuneration each director is paid. Currently, all remuneration is in the form of an annual bonus based on profits. Aplomb has no audit committee and the finance director has been asked to consider if Aplomb should establish one, but she has not undertaken this task yet as she is very busy. A new procurement director was appointed late last year. lie has yet to undertake his board training as this is normally provided by the chief executive and this role is currently vacant.

In accordance with the UK Corporate Governance principles, Aplomb plans to establish a small internal audit department and has been advised that based on the nature of their business they will require a team with very specialist skills. They are not quite sure about the role of the internal audit team. They arc undecided whether to recruit an internal audit team or to outsource the whole function to their external auditors.

There are a large number of shareholders and therefore the directors believe that it is impractical and too costly to hold an annual general meeting of shareholders. Instead, the board has suggested sending out the financial statements and any voting resolutions by email and shareholders can then vote on the resolutions via email.

Required:

Prepare g REPORT for the board of Directors at Aplomb Plc and advise them on the following issues:

(i) From the ease study information above, analyze Effl corporate governance weaknesses at Aplomb Plc.

(ii) Provide recommendations to address each weakness to bring the organization in line with the requirements of the UK Corporate Governance Code.

(iii) Explain the role and function of an Internal Audit Department.

(iv) Evaluate the benefits and drawbacks for Aplomb Plc if the external audit Finn provides both the external audit and the internal audit service to the organization.