The Arctic National Wildlife Refuge in Alaska extends across 19 million acres, consisting of protected wilderness that prohibits even road building. It is the largest unexplored, potentially productive, onshore petroleum producing basin in the world. Despite widespread condemnation from environmental protection groups, Petros (an oil company) was given license to drill there 15 years ago.

The costs of exploration are enormous. There are frequent budget overruns on developing the oil field and there have also been some instances of loss of life among employees. There is also a need to rely heavily on specialist contractors drafted in from around the world who have expertise in dealing with the harsh winter conditions. One such contractor is responsible for maintaining the ageing pipelines.

Recently disaster struck when a corroded pipeline erupted spilling 4,000 gallons of crude oil onto the land, ravaging local caribou (large North American reindeer) herds. A subsequent investigation carried out at the insistence of the board found a number of operational weaknesses. Local site managers had overridden maintenance schedules in order to avoid placing employees at risk during winter months, and there is evidence to suggest collusion between at least one manager and the contractor where maintenance records have been falsified.

At the next AGM the board's attempt at damage limitation incensed a number of shareholders. Despite repeated requests for an apology to be made to indigenous peoples and species, the board remained adamant that responsibility rested with the contractor. In a rare show of shareholder activism, 13% voted for the company to cancel its Alaskan adventure and turn its attention to developing renewable energy sources.

Outside of the forum, environmental protection groups ran a successful campaign for customers to boycott the company's petrol pumps as a sign of protest. Petrol station property has also been vandalised and the board has been forced to convene an emergency meeting to discuss what to do next. Required:

Discuss FIVE (5) reasons why internal control may have failed at Petros and provide recommendations.