The governance of an enterprise is the sum of those activities that make up the internal regulation of the business in compliance with the obligations placed on the firm by legislation, ownership and control. It incorporates the trusteeship of assets, their management and their deployment" (Cannon, 1994).

Extracted from: Solomon, J., & Solomon, A. (2004). Corporate Governance and Accountability. West Success: John Wiley & Sons Ltd.

 

 All questions relate to the case study above 

 

Question 

Having gone through the definition and using your knowledge of corporate governance who is given the trusteeship and control of assets in corporations                                                      

 

Question 

Having gone through the definition and using your knowledge of corporate governance who is given ownership of the corporation.   

Questions

State and elaborate on any four obligations placed on a firm either by legislation ownership or control                                                                                                                               

Question

Critically analyze this definition given by Canon (1994) of corporate governance

Question 

Using you knowledge of corporate governance give your definition of corporate governance and explain why you gave such a definition                                                                                   

Section 

Answer any TWO questions in this section (40 marks)

Question 

Company JKW is listed in the Johannesburg stock Exchange as well as the London Stock exchange. 

1. What type of corporate governance model is it likely to be following?                      
2. Give a detailed description of this model                                                                       

Question

A Company located in Maseru went bankrupt in 2020 and upon thorough investigations it was realized that both the audit function and the accounting function were fraudulent and opaque. 

 

Suggest to the company shareholders how the audit committee could have helped to lessen this situation.                                                                                                                                       

 

Question

The OECD has outlined several principles that are crucial in good corporate governance. Of those highlighted by the OECD select the principles that if implemented can be beneficial to the company and minimize the highlighted issues of company JKW.

 

Section 

Answer all questions in this section

 

 COCA-COLA CASE

Coca-Cola is a company that manufactures carbonated drinks in a lot of countries around the globe. As a result it is listed in various stock exchanges around the world, including the Johannesburg Stock Exchange and the London stock exchange.  It is expected therefore, that the company should adhere to principles of good corporate governance that govern these countries.

The board of directors consists of sixteen candidates in total some of the board members are: Mr. James Quincey who is the Chairman of the board and is also the Chief Executive Officer and acting Director of operations. He became CEO in 2017 and was elected Chairman of the Board in 2019. Mr. Gary Fayard is an Executive director in the board and Chief Financial Officer along with Ms Connie McDaniel who is the principal accounting officer. The board also consists of non-executive directors who are, Ms. Tsay, who has been a Director of the Coca-Cola Company since April 2018. Ms. Tsay has been the CEO and Director of a Computer Software company from 2018. Ms. Tsay previously served as a non- executive director of Rosetta Stone Inc. from 2014 to July 2018. 

Mr. Herbert Allen has been a Director of the Coca-Cola Company since 1982. Mr. Allen is President, Chief Executive Officer and a Director of Allen & Company Incorporated, a privately held investment firm, and has held these positions since 2016. The non-executives directors, Miss Cathleen Black and Mr. Bolland have been directors of the Coca-Cola Company since 2017. Prior to serving as director at Coca-Cola Mr. Bolland served as Chief Executive Officer and a Director of Marks & Spencer Group plc., an international, multi-channel retailer, from May 2010 to April 2016. 

Mr. Barry Diller has been a Director of the Coca-Cola Company since 2002. Mr. Diller held the positions of Chairman of the Board and Chief Executive Officer of IAC/InterActiveCorp and its predecessors since August 1995 and ceased serving as Chief Executive Officer in December 2010. The rest of the board members are Mr. Warren E. Buffett, Mr. Peter V. Ueberroth, Mr James B. Williams, Mr Sam Nunn, Mr Donald F. Mchenry, Mr Donald R. Keough, Mr Pedro Reinhard, Mr Dominique Reiniche. 

Adapted from: Manuel, E (2007), Corporate Governance, https://www.researchgate.net/publication/24113370

Question

Critically analyse the board structure and composition of Coco-cola