CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

ADVANCED FINANCIAL MANAGEMENT

Investment decisions

Financing decisions

Dividend decisions

Financial objectives
Primary objective maximise shareholder wealth
Secondary objectives meeting other predetermined targets
Stakeholders

Shareholders

Management and employees

Customers

Suppliers

Lenders

Government

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CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

Stakeholders

Measures

Suppliers

Price
Payment

Lenders

Security
Liquidity

Government

Taxable profit
Inflation
Employment
Investment

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CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

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CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

Corporate Governance
Are the board effective?
Are they making good decisions?
Can we obtain assurance that they are?

Are the board effective?

Combined Code

Board of Directors
Chair

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CEO

Execs

Non-execs

CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

Are they making good decisions?

Higgs Report
Cadbury Report

Greenbury Code

Key guidance

Smith

Turnbull

Can we obtain assurance that they are?

Disclosure
FSA Listing Rules

Combined Code
FSA Disclosure and
Transparency rules

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CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

More formalised

Independent audit
committee

Quarterly
reporting

USA
Sarbanes Oxley
Independent
directors

PCOAB
Critical accounting policies

Germany
EU company law

Two-tier board
of directors

Board of directors
Supervisory board

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Management board

CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

Japan
Consensual management
Policy boards
Functional boards

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Monocratic
boards

CH AP TER 1 I S S U ES I N COR POR ATE G OVER N AN CE

SUSTAINABILITY AND ENVIRONMENTAL RISK

Sustainability balancing growth with environmental and social concerns

At BP, we are working hard to restore trust in our ability to operate safely and responsibly
wherever we do business.
Our approach to sustainability covers issues relating to governance and risk management, safety, the
environment, the energy future and our local and global socio-economic impact. We aim to report
on these issues in a way that answers key questions raised by our stakeholders.
Carbon Trading
1. Governments hand out free tradable rights to emit carbon dioxide to big industrial polluters
2. Companies buy additional pollution credits from projects that claim to emit less greenhouse
gas than they would have without the investment
Environment Agency
1. Protects air, land and water used by society in England and Wales
2. Offers guidance to businesses on environmental issues

Environmental Permitting

Flood

Pollution and emissions

Waste

Water

Environmental Audits

Energy saving

Waste reduction

Business processes

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