• The goal of this survey is to measure the role of corporate governance in the firm and the effect of it for the major stakeholders. I would like to gauge that where extend the principles of corporate governance happen to be applied in the respective organization and how much the organization possess achieved their obligations toward the major stakeholders.

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• I would like to evaluate the director’s performance in line with the principles of company governance, by simply analyzing the organization governance disclosures in the monetary statements.

• I would really prefer to evaluate the potency of internal control and to evaluate the role of audit panel, in line with the guidelines of corporate and business governance.

• I would like to judge the director’s remuneration plus the working of remuneration panel, in line with the guidelines of mixed code.

• I would like to gauge the part of nominating committee for having a formal and transparent process of appointment of recent director and the effectiveness of succession planning.

• I want to evaluate the danger assessment procedure in the organization, with the correct process of risk committee.

• Finally, I want to evaluate the international practices of company governance and how well my respective organization is in line with the industry practices.


I have selected the subject 17 via OBU analysis and information pack, which is

“the quality of corporate governance within an business and the effect on the organization crucial stakeholders”. This topic includes the application of corporate governance concepts which includes the guidelines given in distinct reports, finally combined into a single Combined Code. It also involves the examination of business governance impact on key stakeholders, including the impact on shareholders as well.

I have picked this subject, because through my expertise from P1 paper (Governance, Risk and Ethics), I got to know about the importance of corporate governance in an organization and I desire to apply the concepts I’ve got in evaluating the potency of corporate governance in an corporation of my choice. Additionally, the corporate governance has become the usual of every firm, so merely get into any organization while an employee I ought to know the significance and need for corporate governance, as it also helps in view of career building.

Another main reason for choice of this particular subject is that the UK combined code is based on rule based strategy (comply or explain basis) rather than the regulation based approach, but still it’s the part of the listing rules in London Stock Exchange. This displays the importance of corporate governance for detailed companies. Further more to concern the annual report in corporate governance is a a part of good procedures, which help stakeholders to understand the governance in the company with no taking a part in that. The comparison of that report with the code provision permits stakeholders to evaluate whether or not the business is governed correctly, nevertheless it also determines the imperfections of governance.


The reason behind selecting English Telecom (BT) as an organization of my personal choice is that because this firm has a solid corporate cultural image in the world. It evidence its good image, with regards to management efficiency leadership, making decisions and corporate governance.

BT Group plc (trading as BT) (LSE: BT. A, NEW YORK STOCK EXCHANGE: BT) can be described as British multinational telecommunications services company headquartered in London, British. It is among the largest telecoms services companies in the world and has procedures in above 170 countries. Through their BT Global Services division it is just a major provider of telecoms services to corporate and government customers worldwide. It is BT Selling division is a leading dealer of telephony, broadband and subscription television set services in britain, with more than 18 million customers.

BT’s origins may date back to the beginning of the Electric power Telegraph Firm in 1846, the initial company on the globe to develop a nationwide marketing communications network. In 1912, the GPO, a government department, became the monopoly telecoms supplier in the UK. The Mailbox Act of 1969 led to the GPO becoming a public corporation. English Telecom was formed in 1980, and became independent of the Post Office in 1981. English Telecom was privatized in 1984, exceeding 50 percent of their shares purcahased by investors. The Government sold it is remaining stake in further share revenue in 1991 and 1993.

BT has a principal listing for the London Stock market and is a constituent from the FTSE 90 Index. Completely a market capitalization of approximately £15 billion by 23 January 2011, the 27th-largest of any company having a primary listing on the London Stock Exchange. It has a secondary listing on the Nyse.

Source: http://en.wikipedia.org/wiki/BT_Group [online]

BT is one of the world’s leading sales and marketing communications services businesses, serving the needs of shoppers in the UK in addition to more than 170 countries throughout the world. Our primary activities will be the provision of fixed-line companies, broadband, portable and TV products and services and also networked THIS services.

In the UK we are a respected communications services provider, making sales and services to buyers, small and medium sized companies and the public sector. We likewise sell low cost products and services to communications services in the UK and around the world. Throughout the world, we source managed networked IT providers to international corporations, home-based businesses and national and local government businesses.

Source: http://www.btplc.com/Thegroup/Ourcompany/index.htm [online]

PORTION – a couple of




Gathering the information in the company regarding my topic was pretty an easier job, as a lot of information regarding the organization (British Telecom) plus the corporate governance is available coming from different options. The reason for fairly easier get is because of a global presence of my respective organization. For example just typing British Telecom (BT) for the Google, you almost come across 11 mil search result, similarly searching for corporate governance at Uk Telecom, you’ll about installment payments on your 91 million search results.

Thus, there is a lot of information offered but the significant task was going to finalize the info, on the basis of top quality and trustworthiness along with updated details. The information helped me performing an excellent of analysis for the corporate governance principles at British Telecom (BT). Subsequent are the resources from which I’ve gathered the information.

British Phone system (BT) official website

The official web site is considered the most credible and reliable supply of getting the details.


The state website of British Telecom (BT) is made up of a separate section for industry�s information which include the section of corporate governance, which helped me in getting the knowledge regarding subject.

www.btplc.com/Thegroup/Ourcompany/Governance/index. htm

Financial reporting council web page

I have as well obtain the details from FRC website since it contains information on corporate governance regarding different studies such as Hampell, Cadbury and Turnbull together with the information of Combined Code.


BBP-ACCA Text Books

I used F1, P1 and P3 BBP-text books to obtain information concerning my relevant topic. We used F1 book to extract the essential knowledge of company governance and stakeholders, furthermore P1 and P3 textual content books allowed me to in my enhance knowledge regarding corporate governance and its stakeholders. P1 was a primary source of knowledge to get my particular topic mainly because it has a in depth section of business governance.

Other source of information gathering

There are some other sources too which allowed me to in my respective topic to get my respective organization. Personally i have tried the Yahoo website we. e. [www.google.com], to collect information regarding corporate governance and its contributions in the achievement of corporations and it proved to be very effective as Google has the energetic and updated searching engine.

Other site that helped in gathering the information was Wikipedia [www.wekepidia.com], this site contain a lot of information with regards to my topic including the the latest ups and downs of corporate governance.

I have investigated the corpgov. net site [www.corpgov.net] to collect relevant information concerning corporate governance and even explored the website pertaining to the different types of description defined by simply different creators.

Similarly, Personally i have tried the web site known as as managing study tips for find the scope and benefits of company governance. [www.managementstudyguide.com]

Moreover, I actually used ACCA website [www.accaglobal.com] to access the articles given by P1 reviewer, evaluator David Campbell regarding business governance.

Furthermore, The UK Merged Code of corporate governance was a important source intended for my expertise gathering relating to my respective topic.


The information I have used for analysis of this task is purely a workplace base exploration. I have not really carried out any kind of field job or any interview with the any kind of personnel in British Telecom. I have used internet for the collection of the data and most parts of the information had been collected through British telecom website. My own research could possibly be limited while compare to my personal topic mainly because most of the info required inside information intended for corporate governance analysis. Even now I have attempted my level best to make use of all publically available data and to cover the maximum prolong through internet.


Throughout the technique of report I have tried to keep up with the ethical regular, required by any ACCA member and student. Even though there was no major honest issue since plenty of details is available with authentic supply. But still I’ve tried my personal level far better achieve honest requirement, by making use of proper and authentic supply of information along with references given of each and every source. Subsequent are the five fundamental concepts defined simply by ACCA, set out in section 3 of the ACCA rulebook:

• Honesty

• Objectivity

• Confidentiality

• Professional competence and due treatment

• Specialist behavior

Origin: ACCA Rule book Web page 283 and 284 (Section 100) reached through www.accaglobal.com/content/dam/acca/global/PDFmembers/2012/2012r/rulebook_2012.pdf [Online/ PDF File]

Though I have tried to comply with most principles, although during my study I have targeted more in two key principles i. e. Honesty and Confidentiality. Firstly, I have tried to be honest and straight forward in my evaluation of corporate governance principles at my respective organization. Subsequently, I have not really considered details that is the ‘confidential information’ from the organization. Furthermore, I have not tried to obtain insider info by any types of relationship.


I have used different theories explain in P1 textual content Book to aid my ideas regarding company governance and stakeholders. Personally i have tried Mendelow’s main grid classification of stakeholders, within my assessment of stakeholders of British Phone system (BT). I possess also use stakeholder and stockholder theory to get my assessment regarding my own respective topic. Moreover, I have used the corporate governance report to measure the effectiveness of corporate governance at BT.

The UK Mixed Code’s provisions helped me in evaluating expand of complying of company governance procedures at BT. To support the view outside the window of corporate and business governance I have used different information such as Hampel, Turnbull and Smith for further guidance on different topics regarding nonexecutive company directors, internal controls and Risikomanagement.

For Reference point: BBP-TEXT Publication P-1 is used (2011 Edition)

PART – 3



Corporate and business governance may be the system with which the agencies are aimed and handled (Cadbury report)

Corporate governance is a set relationship between a industry�s directors, their shareholders and other stakeholders. Additionally, it provides the structure through which the objectives with the company will be set, and the mean of achieving those objectives and monitoring functionality, are identified. (OCED)

Supply: BBP Text Book P1- Page 5, Heading 1 ) 1 (2011 edition)


Were committed to within accordance with best practice in business ethics and values and keeping the highest specifications of financial confirming and corporate governance. The owners consider that BT has, throughout the year, complied with the provisions set out in Section 1 of the 2008 Put together Code about Corporate Governance (the ‘Code’) and utilized the main rules of the Code.

Source: www.btplc.com/Thegroup/Ourcompany/Governance/index. htm [online]


The following is the governance framework of United kingdom Telecom:


Source: BT’s Annual statement 2012, Corporate and business Governance Section Page-65, discovered from www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


I have kept my own base as the UK Code of Company governance pertaining to the analysis of business governance rules at United kingdom Telecom. I possess evaluated the real key areas of corporate governance including Board Procedures, role of Executive / nonexecutives administrators and the position of chairmen, chief Executive officer and Company’s Admin.

1 . The product quality and performance of plank practices & culture in corporate governance in contrast with board for British Telecom:

UK put together code of corporate governance:

A. 1- The Function of the Board

Every firm should be advancing by an effective board which can be collectively accountable for the long lasting success with the company.

Resource: Financial Revealing council – Combined code of corporate governance June-2010 found on www.frc.org.uk, Page-9 Section A: Command [PDF FILE]

Practice by British Telecom (BT):

In British telecommunications the board heads the business as a single team and they are ultimately accountable for the management of the group’s operations moreover to discharging certain legal responsibilities. It includes final responsibility for the group’s approach and for supervising the group’s performance. Their principal focus is about:

• Strategy

• Development

• Developing shareholder worth

• Oversight and control

• Corporate and business governance

Source: www.btplc.com/Thegroup/Ourcompany/Governance/Roleoftheboard [online]


As per the function of the plank defined in the British Telecommunications Website it would appear that the organization is usually following the code provision (A. 1) in an effective manner. The board has the defined responsibilities to supply strategic target and guidance to the corporation.

UK merged code of corporate governance:

A. 2- Division of Duties

There should be a definite division of obligations at the head with the company between the running in the board plus the executive responsibility for the running with the company’s organization. No one specific should have unfettered powers of decision. A. 3- The Chairman

The chairman is liable for leadership of the board and ensuring the effectiveness about all facets of its part. Source: Monetary Reporting authorities – Merged code of corporate governance June-2010 found on www.frc.org.uk, Page-10 Section A: Leadership [PDF FILE]

Practice at United kingdom Telecom (BT):

At British Telecom (BT) there are very clear segregation of duties between who is running the company and who is jogging the plank. The Chairmen is the deal with the company and heads the board as the CEO is a face of board and heads the management from the company we. e. the company’s operation.

Tasks of the Leader and the Chief Executive

The functions of the Leader and the Leader are independent. They are decide in created job points, approved by the Nominating & Governance Committee.

The Leader

The Chairman provides leadership for the Board upon all areas of its position.

His key activities include:

• Chairing the Plank, Nominating & Governance Panel, and the Panel for Lasting and Dependable Business; as being a member of the BT Retirement benefits Committee and promoting a culture to facilitate wide open debate and appropriate problem

• Talking to the nonexecutive directors on corporate governance issues, particularly the Senior Impartial Director

• Reviewing the consumer performance in the nonexecutive administrators and the Leader

• Possessing regular gatherings with the non-executive directors when they discuss matters with no executive owners being present

• Ensuring, with the Leader and the Organization Secretary, the Board is definitely kept correctly informed, is consulted on all concerns reserved to it and this its decisions are made in a timely and considered approach that enables the directors to fulfill their fiduciary duties

• Making sure that fresh directors receive full, formal and tailored induction, which all administrators continue to upgrade and renew their skills and expertise

• Ensuring that the sights of the shareholders are known to the Plank through the Organization Secretary and considered properly

• Representing BT in specified proper and Government relationships, since agreed while using Chief Executive, and generally acting while the connection between

the Table and the business team, specifically on BT’s broad proper direction.

The main Executive

The Chief Executive has ultimate executive responsibility, credit reporting to the Plank, for the day-to-day operating of the business and the accomplishment of the group. He’s responsible for leading the administration and the functional performance of the group, as well as the effective implementation from the strategy and the business plan arranged by the Plank, while handling the risks.

His role comes with:

• Leading the Functioning Committee inside the day-to-day operating of the organization

• Retaining an effective discussion with main shareholders

• Establishing and maintaining essential relationships including those with government authorities, regulators, crucial industry players and view formers

• Monitoring the performance of executive company directors and senior management

• Maintaining an efficient framework for internal controls and Risk management.

Source: BT’s Annual survey 2012, Corporate and business Governance Section Page-67, found from www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


Following the evaluation with the role and responsibilities of Chairmen and CEO, it demonstrates that the table of British Telecom has got the clear division of the responsibilities at the top of the business. There is no 1 dominant individual who has each of the power to manage the organization. Furthermore the part of Chairmen defines that he is providing the leadership towards the board. General the company is pursuing the code conditions (A. 2 & A. 3) in an effective method.

UK combined code of corporate governance:

B. 4 – Expansion

All administrators should receive inauguration ? introduction on getting started with the board and should regularly update and refresh their particular skills and knowledge.

Resource: Financial Credit reporting council – Combined code of company governance June-2010 found on www.frc.org.uk, Page-15 Section B: Performance [PDF FILE]

Practice by British Telecommunications (BT):

About appointment, directors take part in a great induction plan to deepen their know-how and understanding of the business. That they receive information about BT, the role from the Board as well as the matters available to its decision, the conditions of research and account of the main Board Committees, and the forces delegated to the people Committees, BT’s corporate governance policies and procedures, such as the powers arranged to the group’s most elderly executives, plus the latest monetary information.

The induction plan also includes group meetings with each one of the executive and nonexecutive directors, members in the Operating Committee and senior executives throughout the business. Besides the induction system, an on-going programme of director development and firm awareness have been developed to achieve the non-executive directors an admiration of the different elements of the organization both in great britain and international.

Directors happen to be continually up to date on BT’s business, the competitive and regulatory conditions in which it operates and other changes impacting BT and the communications sector as a whole, by written concile and meetings with mature BT business owners.

Source: BT’s Annual record 2012, Company Governance Section Page-68, underneath

Training and details heading, identified from www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


The induction teaching and on-going programme of director’s creation at British Telecom shows that the organization is in successful compliance of code supply (B-4 Development)

UK mixed code of corporate governance:

B. six – Evaluation

The board should carry out a formal and rigorous annual evaluation of its own functionality and that of its committees and specific directors.

Resource: Financial Credit reporting council – Combined code of company governance June-2010 found on www.frc.org.uk, Page-16 Section B: Success [PDF FILE]

Practice by British Phone system (BT):

Boardroom Review can be carried simply by an independent exterior organisation, that was appointed, after a tender physical exercise, to conduct a Table evaluation. The methodology included one-to-one interviews and statement of a Board meeting to supply an independent external view of the Board’s effectiveness. A report was produced and discussed at the Board conference in May 2011. The statement described several areas where the Board was effective and functioning well. In addition there was some locations where enhancements could possibly be considered and a number of actions were arranged by the Panel

Source: BT’s Annual report 2012, Company Governance Section Page-68, beneath Board analysis heading, located from www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


The performance of directors is essential in the improvement of an business which must be evaluated by the board, according to UK code of corporate governance. By British Phone system the plank room review is carried out by an independent exterior organisation, which in turn seems that the organisation has somewhat successful compliance with code dotacion (B. 6).

UK put together code of corporate governance:

B. 7 – Re-election

All administrators should be posted for re-election at regular intervals, subject to continued satisfactory performance

Source: Financial Revealing council – Combined code of business governance June-2010 found on www.frc.org.uk, Page-17 Section B: Performance [PDF FILE]

Practice at British Telecom (BT):

Each and every annual standard meeting, virtually any director who was elected or last re-elected a overseer at or perhaps before the twelve-monthly general conference held in the third year ahead of the current yr, must cease working by rotation. Any movie director appointed by the directors instantly retires on the next following annual standard meeting. A retiring overseer is entitled to re-election. In addition to any benefits of removal underneath the 2006 Take action, the investors can pass an ordinary quality to remove a director, even though his or her time in office hasn’t ended.

They will elect a person to exchange that overseer subject to the Articles, simply by passing a regular resolution. A person therefore appointed can be subject to pension by rotation when the movie director replaced could have been due to retire.

Source: BT’s Gross annual report 2012, Additional information (Information for

shareholders) Section Page-183, under Directors’ visit and retirement heading, discovered from www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


The policies and procedures described for the director’s re-election, specially the non-executive director’s election for 3 years just before s/he needs to face re-election shows that the British Phone system policies will be 100% in accordance with the Code provision of Re-election (B. 7).

2 . The quality and effectiveness of remuneration panel in company governance in comparison with committee at Uk Telecom:

UK combined code of business governance:

D. 2 – Procedure

There should be a formal and transparent process of developing plan on executive remuneration and then for fixing the remuneration deals of specific directors. Simply no director needs to be involved in choosing his or her personal remuneration.

Resource: Financial Revealing council – Combined code of corporate governance June-2010 found on www.frc.org.uk, Page-23 Section D: Remuneration [PDF FILE]

Practice at British Telecommunications (BT):

People of the Committee consist of three independent non-executive directors. The Chairman with the Board are often a member from the Committee if perhaps considered 3rd party on visit as Chairman. Chairman and Chief Executive may attend gatherings of panel, except in instances where their own remuneration is reviewed.

The Remuneration Committee confirms the framework for the remuneration of the Chairman, the executive owners and selected senior business owners. This includes the policy for all cash remuneration, executive discuss plans, service contracts and termination plans. The Committee approves salaries, bonuses and promote awards to get executive administrators and specific senior professionals.

The Panel approves new executive discuss plans and any alterations and makes suggestions to the Table which need shareholder authorization and runs their operation. The Committee also can determine the basis where awards are granted within the executive talk about plans to executives confirming to the mature management team.

Source: BT’s Annual record 2012, Corporate Governance Section Page-77, underneath “The Remuneration committee (our role)” proceeding, found by www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


The framework of the remuneration committee as well as the occasional presence of the Leader and Leader for the meeting (except the conferences in which their own remuneration will be discussed), shows to be completely effective compliance of the code provision (D. 2)

a few. The quality and effectiveness of internal regulates and Taxation & Risk committee in corporate governance in contrast with committee at British Phone system:

UK combined code of corporate governance:

C. three or more – Examine Committee and Auditors

The board ought to establish formal and transparent arrangements to get considering that they should apply the corporate revealing and risikomanagement and internal control guidelines and for maintaining an appropriate romantic relationship with the provider’s auditor.

Supply: Financial Revealing council – Combined code of business governance

June-2010 available on www.frc.org.uk, Page-19 Section C: Accountability [PDF FILE]

Practice at United kingdom Telecom (BT):

Following would be the main tasks of an examine and risk committee intended for financial revealing, risk management & internal settings and external audit:

Monetary Reporting:

The committee reviews BT’s published financial effects, the Total annual Report & Form 20-F and other posted information pertaining to statutory and regulatory compliance and reports their particular views for the Board to support in its approval of the results announcements and the Annual Survey & Form 20-F.

Inside control and risk management:

The committee review the disclosures made by the primary Executive and Group Finance Director through the certification method for the Annual Report & Form 20-F regarding the design and operation of internal regulates or weaknesses in the controls, including any fraud including management or other personnel who have a substantial role in the company’s economic controls. The Board, as required by UK rules, takes responsibility for all disclosures in the Annual Report & Form 20-F. They also obtain reports around the processes to relieve symptoms of complaints received by the firm regarding accounting, internal accounting controls or auditing things.

External Examine:

The committee recommends the appointment and re-appointment in the external auditors and views their resignation or termination, recommending for the Board ideal action to appoint new auditors. That they assess the performance of the external auditors annually by seeking views on their particular performance coming from key stakeholders across the group. The results of the assessment are reported to the Panel. The exterior auditors are required to move the lead partner every single five years, and other companions that are in charge of the group and subsidiary audits just about every seven years.

Independence from the external auditor:

In order to secure the freedom and objectivity of the external auditors, the Board provides determined policies as to what non-audit services may be provided by the external auditors and the authorization process relevant to them. The overall policies and processes to implement them were analyzed and correctly modified in the light of the provisions from the Sarbanes-Oxley Take action relating to non-audit services that external auditors may not carry out.

Source: BT’s Annual record 2012, Corporate Governance Section Page-70, beneath “Audit & Risk Panel Chairman’s record (Our role)” heading, located from www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


After the review of the principle duties of taxation and risk committee in comparison with the code provision (C. 3), this shows that the organization is in powerful compliance. They may have formal and transparent arrangements for corporate reporting, risk management & interior control and external examine.

4. The quality and performance of Nominating committee in corporate governance in contrast with committee by British Phone system:

At Uk telecom, we have a committee known as Nominating and Governance panel which is accountable for both nomination and oversight of governance.

UK put together code of corporate governance:

B. you – The Composition of the Board

The board and its particular committees must have the appropriate stability

of skills, experience, independence and knowledge of the business to enable them to launch their particular duties and responsibilities successfully.

Source: Economical Reporting council – Mixed code of corporate governance June-2010 available on www.frc.org.uk, Page-12 Section W: Effectiveness [PDF FILE]

Practice at Uk Telecom (BT):

The Nominating and Governance Committee helps to ensure that there is a suitable balance of skills, encounter, independence and knowledge around the Board and its Committees, reviews the size and composition from the Board and makes recommendations to the Board.

Supply: British Phone system Website – under Nominating & Governance Committee – Term of reference (Introduction) http://www.btplc.com/Thegroup/Ourcompany/Governance/NominatingCommitee/Terms [Online]


The code dotacion (B. ) is found to be very effectively complied in line by British Telecommunications, as is the work of nominating and governance to have appropriate composition of board

UK combined code of corporate governance:

N. 2- Sessions to the Plank

There should be a formal, rigorous and transparent process of the visit of new directors to the board.

Source: Economical Reporting authorities – Combined code of corporate governance June-2010 found on www.frc.org.uk, Page-13 Section B: Effectiveness [PDF FILE]

Practice at Uk Telecom (BT):

The Nominating & Governance Committee is usually headed by Chairmen around the request in the board. You will discover four nonexecutive directors in the committee, furthermore The Company Secretary and, where appropriate, with the invitation with the Chairman, the main Executive attends the Committee’s meetings.

Panel identifies the particular experience and skills the company is looking for and thinks candidates which have been put forward by the Board and external consultants. Committee makes certain that diversity is known as as part of the prospect process drawn up by the external consultants and, having met potential candidates.

The committee the recommendation towards the Board and advice about succession planning for all Board appointments (and the Company Secretary). Source: BT’s Annual statement 2012, Corporate Governance Section Page-72, beneath “Nominating & Governance Panel Chairman’s report (Nominating)” going, found from www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


The procedure with the appointment of board, defined under the position of Nominating & governance Committee proves that the organization is putting into action the Code provision (B. 2), successfully.

5. The quality and effectiveness of function of non- executive directors in merged code and practice for British Telecommunications:

UK put together code of corporate governance:

A. 4- nonexecutive Owners

As part of their role as members of a unitary board, non-executive directors ought to constructively challenge and help develop proposals upon strategy.

Resource: Financial Revealing council – Combined code of corporate governance June-2010 found on www.frc.org.uk, Page-11 Section A: Command [PDF FILE]

Practice at British Telecommunications (BT):

The non-executive directors:

• Offer a strong, 3rd party element within the Board and are well placed to challenge constructively and help develop proposals upon strategy.

• Collectively bring experience and independent view, gained at the most senior degrees of international business operations and strategy, fund, marketing, technology, communications and political and international affairs and corporate sociable responsibility.

Origin: BT’s Annual report 2012, Corporate Governance Section Page-67, under Function of the nonexecutive directors heading, found by www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


The function of Non-executive directors defined in code of company governance (A. 4) plus the role of NED’s available at British phone system both proved to be effectively consistent with each other.

six. The quality and effectiveness of role of company secretary and practice at British Telecom:

Generally in most countries, the appointment of any company admin is a compulsory condition of company registration. The reason is , the company admin has significant responsibilities in compliance, like the responsibility intended for the regular filing of accounts and also other legal complying issues. His or her primary loyalty is always to the organization.

Technical expertise is therefore an important a part of this part. Because of this, various countries’ company law mandates that for a general public company, the post holder must be a member of one of any list of professional accountancy or company admin professional physiques (which includes ACCA).

The roles consist of:

• Keeping the statutory registers (such as the share register)

• Ensuring the well-timed and accurate filing of audited accounts and other documents to lawful authorities (Example. government companies’ agencies and tax authorities)

• Featuring members (Example shareholders) and directors with notice of vital meetings.

• Organising promises for and minutes by major organization meetings (like the AGM); keeping data from these and other gatherings.

Source: ACCA P1 Document (Corporate governance – external and inner actors) – 25th August 2009, simply by David Champbell. Page-1, found from www.accaglobal.com/en/student/qualification-resources/acca-qualification/acca-exams/p1-exams/exams-p13 [PDF FILE]

Practice in British Phone system (BT):

The corporation Secretary:

• Manages the provision of timely, exact and considered information towards the Board for its meetings and, in assessment with the Chairman and Chief Executive, at other appropriate moments.

• Suggests to the Leader and the Chief Executive, for Panel consideration in which appropriate, corporate and business governance plans and procedures and is in charge of communicating and implementing these people.

• Recommends the Board on suitable procedures for the managing of the meetings and duties (and those of the primary Committees), as well as corporate governance and conformity within the group.

The visit and associated with the Company Admin is a subject for the whole Board.

Source: BT’s Annual survey 2012, Corporate and business Governance Section Page-65, below Role of company secretary, found via www.btplc.com/Sharesandperformance/Annualreportandreview [PDF FILE]


The part of organization secretary bought at British Telecommunications in contrast with the role identified by ACCA P1 Evaluator David Champbell in his document, is appears to be almost efficiently in line with one another.


Meaning of Stakeholders:

A stakeholder can be anybody that can affect or is impacted by an organisation, strategy or project. They can be internal or perhaps external plus they can be for senior or junior levels. Some definitions suggest that stakeholders are those who have the power to impact a great organisation or project somehow.

Source: www.stakeholdermap.com/stakeholder-identification [online]

Stakeholders at Uk Telecom:

A stakeholder within a business can be any individual or perhaps group with an interest in the decisions made by that company. Some of BT’s stakeholders are inside to the business, such as its employees. Some are external for the business, including BT’s consumers.

Source: (The times 95 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/what-is-a-stakeholder.html [Online]

1 ) Mendelow’s mapping of Stakeholders:

Mendelow gave the following matrix of stakeholder mapping based upon the interest and power of stakeholders:


Origin: www.stakeholdermap.com/stakeholder-analysis.html [online]

Assessment of stakeholder’s umschl�sselung at Uk Telecom (BT):

Following are definitely the main stakeholders of United kingdom Telecom:

• Shareholders

• Government / Regulators

• Employees

• Customer

• Suppliers

• Communities

Resource: (The moments 100 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/what-is-a-stakeholder.html [Online]

These stakeholders of BT’s Telecom may be classified in grid, based upon Power and Interest offered by Mendelow because:


installment payments on your Stakeholders Classification (Internal and External Stakeholders):

Perhaps the least difficult and most easy distinction can be between stakeholders inside the business and those outdoors. Internal stakeholders will typically include workers and administration, whereas external stakeholders includes customers, competitors, suppliers, etc. Some stakeholders will be more challenging to categories, such as trade assemblage that may have elements of the two internal and external regular membership.

Source: ACCA P1 Content (All regarding stakeholders – part 1) – 08 January 2008, by David Champbell. Page-2, under heading “Internal and external stakeholders found from www.accaglobal.com/en/student/qualification-resources/acca-qualification/acca-exams/p1-exams/exams-p13 [PDF FILE]

Examination of internal and external stakeholders for British Phone system (BT):

Inner Stakeholders:

• Share cases

Shareholders are extremely important stakeholders because they put money in the business. They contribute capital to the business and be ready to share in the company’s income. BT requirements the support of investors to provide funds to increase the business. The corporation therefore retains close relationships with its main shareholders. It is going to keep investors informed about its economical results and its plans to get growth.

BT rewards its shareholders by providing them a share from the profits. This is certainly known as a gross. BT pays dividends twice a year.

Shareholders have an immediate interest in discovering the company become more profitable. BT aims to maximize its revenue by:

➢ Growing its business through offering new goods and services to enhance sales

➢ Building the corporation reputation to win new customers.

A company can also increase its income by becoming more efficient. It might increase its profit perimeter by minimizing costs. This will allow it to pay higher dividends, bettering the return shareholders get on their expenditure.

Source: (The times 75 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/ internal-stakeholders. code [Online]

• Employees

Personnel are certainly one of a provider’s most important possessions. A dedicated workforce will help a business to accomplish its aims. Employees provide skills such as creativity and problem solving.

To increase the company’s primary competencies, BT runs programs to improve the relevant skills of its employees. For instance , BT has used Apprenticeship Frameworks to enable much more than 7, 1000 of their employees to gain a work-related qualification in a single year.

All employers require a motivated staff. Dissatisfied or perhaps unhappy personnel tend not to generate good work and will look for other jobs.

To gain their commitment, BT aims to provide it is employees with attractive rewards and good career prospective customers. It also permits flexible working arrangements. For instance , almost 9, 500 BT employees currently work from home.

It can help the company to draw and preserve a diverse staff. It also reduces the company’s environmental impacts because fewer employees travel to operate.

Source: (The times 95 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/ internal-stakeholders. html code [Online]

Exterior Stakeholders:

• Government and industry regulators:

BT must comply with rules set by the governments and industry government bodies in the countries in which that operates. These stakeholders directly affect BT in numerous ways. They will issue BT with permits to operate inside the telecommunications sector. Without these permit, BT could have no business. For example , BT must adhere to the European Union’s RoHS directive, which will restricts the usage of certain dangerous substances in electrical and electronic products.

Source: (The times 90 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/ external-stakeholders. code [Online]

• Customers:

A focus on clients is at the heart of all things BT does. To attract and keep its buyers, BT attempts to offer the products and services demanded simply by businesses and consumers. This involves continuous expenditure in new services. For example , BT is investing £2. 5 billion on creating wider Very fast Broadband access across the UK.

Source: (The times 90 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/ external-stakeholders. code [Online]

• Suppliers:

BT has a global supply cycle. It requires suppliers that can provide the materials, pieces, products and services that could enable BT to achieve a technical and competitive benefit. Cost and quality are important considerations. However , BT as well maintains an environmental concentrate to the relationships with suppliers. For example , when the organization purchases elements and items at affordable from the Far East, managers make sure that the low expense is balanced against environmental and also other impacts. There is also a partnership approach.

Source: (The times 90 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/ external-stakeholders. code [Online]

• The Community:

Every companies can have an impact around the communities by which they operate. This is why the wider community is an important stakeholder. These affects can be confident. For example , businesses provide careers, which have an effect on regional economies.

BT demonstrates it is social responsibility through it is environmental initiatives. It is also playing a role in community building. One way it can be doing this is by helping to make internet broadband access more widely available. being unfaithful. 2 mil Adults in britain have never utilized the internet. BT hopes to address this through its ‘Get IT together’ campaign to help people get on-line. By increasing its systems, BT can make a contribution to tackling sociable exclusion.

Resource: (The occasions 100 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/ external-stakeholders. html [Online]

3. Evaluation Stakeholder AS OPPOSED TO Stockholder theory:

Essentially, supporters of the stockholder theory believe because organisations are ‘owned’ by their principals, the providers (directors) have a moral and legal duty to take accounts of principals’ claims when setting objectives and making decisions. Therefore, for a joint-stock business such as a public firm, it may be assumed that mainly because principals (shareholders) seek to increase their comes back, the sole responsibility of brokers is to take action in such a way as to achieve that.

Stakeholder theorists, in contrast, argue that because a business organisation is a resident of contemporary society, enjoying it is protection, support and rewards, it has a duty to recognise a plurality of claims in a similar manner that an individual might act as a ‘responsible citizen’. Essentially, this means identifying claims moreover to those of shareholders once reaching decisions and selecting strategies.

Supply: ACCA P1 Article (All about stakeholders – component 2) – 07 Feb . 2008, by David Champbell. Page-1, beneath heading “THE STAKEHOLDER/STOCKHOLDER DEBATE” found by www.accaglobal.com/en/student/qualification-resources/acca-qualification/acca-exams/p1-exams/exams-p13 [PDF FILE]

In British Telecom:

Different sets of stakeholders may have inconsistant interests. Allow me to share four samples of potential issues involving BT stakeholders:

• As part of it is Next Generation Access programme, the business needs to set up new optical fiber cabling to be able to provide super-fast internet connection services around the world. This may be welcome by consumers, who will get a better assistance, but could potentially cause disruption and traffic holds off due to roadworks while the cabling are becoming laid.

• BT’s investment in community activities could possibly be contentious. Several shareholders might object to the company purchasing activities that will not contribute directly to profits.

• Another potential clash comes from BT’s pricing policy. Clients naturally desire low prices, nevertheless shareholders may feel that higher prices would generate better profits.

• BT provides a policy of no mandatory redundancies. This gives security for workers. However , investors may feel that the insurance plan could adversely affect the provider’s profitability and satisfaction.

Directors and managers by BT must try to control these clashes in a way that maintains stakeholders cheerful. This often involves finding a solution that strikes a balance between competing interests. On occasion, it will not be possible to satisfy everyone. By least one of the stakeholder groupings will feel they are losing away. However , great decision-making involves keeping all parties happy with the results.

Source: (The times 95 website) www.businesscasestudies.co.uk/bt/stakeholders-as-partners/ stakeholder-conflict. html [Online]


In term of analysis carried out on corporate governance practices at Uk Telecom by simply six different angles, it will rightly always be concluded that the corporation is found to be extremely effectively in compliance with best practices. Furthermore, it was interesting to note that British Telecommunications has the panel to check the compliance of corporate governance principles in accordance with the corporate governance framework referred to by the panel. This panel is put together with Nominating committee and termed as ‘Nominating and Governance Committee’.

The organization problems a separate survey on company governance attached with their Twelve-monthly report, in order to get their reveal holders up to date about the best practices are being followed. British Telecom’s Board and management possess a firm imagine on the corporate and business governance as a best practices, that why the very best practices and code conditions reflects in their policies and conduct. Furthermore British telecom considers their particular stakeholders his or her partner towards the company, and they take keen steps to satisfy the demands of stakeholders.

In a nutshell, the organization features strong complying with guidelines and they maintain their stakeholders well satisfied, which makes you�re able to send image solid in the market through the years.

List of Referrals:

1 . Monetary reporting website accessed upon www.frc.org.uk, combined code of corporate governance – Summer 2010 version published by simply financial revealing council. Main principles of Sections A – At the: (Leadership, efficiency, accountability, remuneration and contact with Shareholders) Page 9-26 [PDF File].

installment payments on your British Telecommunications web site reached on www.btplc.com/ Shareholders & analysts>Annual reviews 2012 [PDF file].

3. English Telecom website accessed upon www.btplc.com/ BT Group>our company>Corporate governance statement [online].

4. P1 – BBP study Text message, edition 2011examination, chapter 1 – three or more on company governance.

your five. David Campbell P1 examiner articles [all regarding stakeholders component 1 & 2 and company governance, external and interior actors] accessed about ACCA internet site [www.accaglobal.com] Students>Degree resources >ACCA Qualification>P1 Governance, risk and ethics>Past paperwork and syllabuses technical articles [Online/PDF version].

6th. Wikipedia site accessed in www.wikipedia.com/ 2012 version.

several. The Times 100 website utilized on [www.businesscasestudies.co.uk] >bt>stakeholders-as-partners (what-is-a-stakeholder, Internal-stakeholder, external stakeholder and conflicts of stakeholders).

8. Stakeholdermap. com utilized through [ www.stakeholdermap.com] / stakeholder-analysis.

9. ACCA Website [www.accaglobal.com] Home>Members>Professional standards and ethics>Rules and standards >Rule Book 2012 [PDF FILE]


1 . British Telecommunications Website – www.btplc.com

installment payments on your Financial revealing council – www.frc.org.uk

3. P1 BBP study text message.

4. Wikipedia – www.wikipedia.com

5. ACCA Technical Document – www.accaglobal.com

6. Corporate and business governance – www.corpgov.net

six. London Stock Exchange – www.londonstockexchange.com

8. The 100 occasions website – www.businesscasestudies.co.uk

9. Stakeholdermap. com – www.stakeholdermap.com

10. Investopedia website – www.investopedia.com

eleven. The Economist website – www.economist.com

12. European business governance Start – www.ecgi.org

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