Acca Topic 17 Sample Thesis

– The objective of this report is to evaluate the perform of company governance in the firm and the impression of it on the significant stakeholders. I want to study that to which lengthen the ideas of enterprise governance are used within the respective firm and simply how much the corporate have attained its duties towards the numerous stakeholders.

– I want to assess the director’s efficiency according to the concepts of company governance, by evaluating the business governance disclosures in the monetary statements.

– I would like to study the efficiency of inside management and to evaluate the function of audit committee, consistent with the ideas of corporate governance.

– I would like to study the director’s remuneration and the working of reimbursement committee, according to the principles of combined code.

– I want to study the position of nominating committee for having an official and clear therapy for appointment of brand-new director and the efficiency of succession planning.

– I want to study the threat evaluation process within the organization, with the right procedure of menace committee.

– Finally, I want to look at the international practices of company governance and how well my respective firm is consistent with the business practices.


I have really chosen the subject 17 from OBU research study and info pack, which is
“the high quality of company governance within a company and the affect on the group essential stakeholders”. This subject consists of the application of company governance concepts which includes the ideas given up various reports, lastly mixed right into a single Combined Code.

It likewise consists of the analysis of corporate governance impact on essential stakeholders, including the effect on shareholders too.

I have chosen this topic, as a result of by way of my data from P1 paper (Governance, Risk and Ethics), I obtained to know in regards to the significance of company governance in an organization and I need to apply the concepts I actually have received in evaluating the effectiveness of company governance in a corporation of my selection. Moreover, the corporate governance has turn into the norm of each group, so if I get into any group as an employee I should know the relevance and significance of corporate governance, because it additionally helps in view of career building.

Another major cause for choice of this explicit topic is that the UK combined code is based on precept primarily based approach (comply or clarify basis) quite than the rule based mostly method, but nonetheless it’s the part of the itemizing rules on London Stock Exchange. This shows the importance of corporate governance for listed corporations. Further to concern the annual report on company governance is part of good practices, which help stakeholders to understand the governance of the corporate without taking an element in it. The comparison of that report with the code provision allows stakeholders to judge whether or not the company is ruled accurately, although it also identifies the issues of governance.


The reason for selecting British Telecom (BT) as a corporation of my choice is that as a result of this organization has a robust corporate social image in the world. It proofs its robust picture, when it comes to management effectiveness management, decision making and company governance.

BT Group plc (trading as BT) (LSE: BT.A, NYSE: BT) is a British multinational telecommunications providers company headquartered in London, United Kingdom. It is probably one of the largest telecommunications services firms in the world and has operations in over a hundred and seventy international locations. Through its BT Global Services division it is a serious provider of telecoms services to corporate and authorities prospects worldwide. Its BT Retail division is a leading provider of telephony, broadband and subscription television providers within the UK, with over 18 million customers.

BT’s origins date back to the founding of the Electric Telegraph Company in 1846, the first company in the world to develop a nationwide communications network. In 1912, the GPO, a government department, grew to become the monopoly telecoms provider in the UK. The Post Office Act of 1969 led to the GPO changing into a public company. British Telecom was fashioned in 1980, and became impartial of the Post Office in 1981. British Telecom was privatized in 1984, with more than 50 per cent of its shares sold to investors. The Government offered its remaining stake in further share sales in 1991 and 1993.

BT has a main listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalization of approximately £15 billion as of 23 December 2011, the 27th-largest of any company with a primary listing on the London Stock Exchange. It has a secondary itemizing on the New York Stock Exchange.

Source: [online]

BT is considered one of the world’s leading communications companies corporations, serving the wants of customers in the UK and in more than 170 international locations worldwide. Our primary actions are the availability of fixed-line companies, broadband, cell and TV services and products as nicely as networked IT providers.

In the UK we’re a leading communications providers supplier, selling products and services to consumers, small and medium sized enterprises and the general public sector. We additionally sell wholesale services to communications suppliers within the UK and around the world. Globally, we supply managed networked IT services to multinational companies, domestic companies and nationwide and native authorities organizations.

Source: [online]

PART – 2




Gathering the information of the corporate relating to my matter was fairly a neater task, as loads of data relating to the group (British Telecom) and the company governance is out there from totally different sources. The cause for pretty easier entry is because of an international presence of my respective group. For example simply typing British Telecom (BT) on the Google, you virtually come across eleven million search outcome, equally trying to find corporate governance at British Telecom, you’re going to get about 2.ninety one million search results.

Thus, there might be plenty of data out there however the necessary task was to finalize the information, on the basis of high quality and reliability along with updated data. The information helped me performing a quality of research on the company governance rules at British Telecom (BT). Following are the sources from which I actually have gathered the data.

British Telecom (BT) official website

The official web site is probably the most credible and reliable source of getting the knowledge.

The official web site of British Telecom (BT) accommodates a separate part for company’s information which includes the section of corporate governance, which helped me in getting the information concerning topic.

Financial reporting council website

I have also obtain the data from FRC website because it contains plenty of data on corporate governance relating to totally different reviews 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 info on my relevant subject. I used F1 guide to extract the fundamental information of company governance and stakeholders, moreover P1 and P3 textual content books helped me in my advance information relating to company governance and its stakeholders. P1 was a major supply of data for my respective matter as it has a detailed section of corporate governance.

Other supply of data gathering

There are some other sources as well which helped me in my respective topic for my respective organization. I even have used the Google web site i.e. [], to gather data regarding company governance and its contributions in the success of firms and it proved to be very efficient as Google has the active and up to date looking engine.

Other web site that helped in gathering the knowledge was Wikipedia [], this website comprise plenty of data concerning my subject including the latest ups and downs of corporate governance.

I have explored the corpgov.web website [] to collect related information on corporate governance and even explored the website for the various sorts of definition outlined by totally different authors.

Similarly, I have used the website online named as administration examine information to search out the scope and advantages of company governance. []

Moreover, I used ACCA web site [] to entry the articles given by P1 examiner David Campbell relating to company governance.

Furthermore, The UK Combined Code of corporate governance was a valuable supply for my knowledge gathering regarding my respective matter.



The information I truly have used for evaluation of this project is purely a desk base analysis. I have not carried out any subject work or any interview with the any personnel at British Telecom. I even have used internet for the collection of the data and most parts of the knowledge were collected by way of British telecom web site. My research might be limited as evaluate to my topic as a outcome of a lot of the info required inside data for corporate governance evaluation. Still I even have tried my degree best to use all publically out there data and to cover the utmost lengthen by way of internet.


Throughout the method of report I have tried to maintain up the ethical normal, required by any ACCA member and student. Though there was not any main moral concern as loads of information is out there with genuine supply. But nonetheless I even have tried my degree finest to achieve ethical requirement, by utilizing correct and genuine source of information along with references given of each source. Following are the 5 elementary ideas outlined by ACCA, set out in part three of the ACCA rulebook:

• Integrity

• Objectivity

• Confidentiality

• Professional competence and due care

• Professional behavior

Source: ACCA Rule guide Page 283 and 284 (Section 100) accessed via [Online/ PDF File]

Although I have tried to adjust to all rules, however throughout my research project I have targeted more on two main rules i.e. Integrity and Confidentiality. Firstly, I actually have tried to be honest and straight ahead in my analysis of corporate governance principles at my respective organization. Secondly, I even have not considered any data that is the ‘confidential information’ of the organization. Furthermore, I actually have not tried to acquire insider info by any types of relationship.


I have used completely different theories explain in P1 textual content Book to support my ideas relating to corporate governance and stakeholders. I have used Mendelow’s grid classification of stakeholders, in my assessment of stakeholders of British Telecom (BT). I even have additionally use stakeholder and stockholder theory for my evaluation concerning my respective matter. Moreover, I actually have used the corporate governance report to gauge the effectiveness of corporate governance at BT.

The UK Combined Code’s provisions helped me in evaluating prolong of compliance of corporate governance provisions at BT. To assist the view of company governance I truly have used totally different reports such as Hampel, Turnbull and Smith for additional steering on completely different subjects relating to Non-Executive administrators, inside controls and Risk management.

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

PART – 3



Corporate governance is the system by which the organizations are directed and managed (Cadbury report)

Corporate governance is a set relationship between a company’s directors, its shareholders and other stakeholders. It also provides the construction by way of which the objectives of the corporate are set, and the imply of reaching those objectives and monitoring efficiency, are decided. (OCED)

Source: BBP Text Book P1- Page 5, Heading 1.1 (2011 edition)


We are committed to operating in accordance with best practice in business integrity and ethics and maintaining the best standards of economic reporting and company governance. The administrators consider that BT has, all yr long, complied with the provisions set out in Section 1 of the 2008 Combined Code on Corporate Governance (the ‘Code’) and utilized the principle ideas of the Code.

Source: [online]


The following is the governance construction of British Telecom:


Source: BT’s Annual report 2012, Corporate Governance Section Page-65, found from [PDF FILE]


I have stored my base as the UK Code of Corporate governance for the analysis of company governance ideas at British Telecom. I even have evaluated the important thing areas of company governance such as Board Practices, position of Executive / Non-Executives directors and the position of chairmen, chief Executive officer and Company’s Secretary.

1. The quality and effectiveness of board practices & tradition in company governance in contrast with board at British Telecom:

UK mixed code of company governance:

A.1- The Role of the Board

Every firm must be headed by an efficient board which is collectively responsible for the long-term success of the corporate.

Source: Financial Reporting council – Combined code of corporate governance June-2010 found on, Page-9 Section A: Leadership [PDF FILE]

Practice at British Telecom (BT):

At British telecom the board heads the company as a single team and they’re in the end answerable for the management of the group’s operations in addition to discharging sure authorized obligations. It has ultimate responsibility for the group’s technique and for overseeing the group’s efficiency. Its principal focus is on:

• Strategy
• Development
• Growing shareholder value
• Oversight and control
• Corporate governance
Source: [online]


As per the position of the board defined at the British Telecom Website it appears that the organization is following the code provision (A.1) in an effective method. The board has the outlined responsibilities to supply strategic purpose and guidance to the group.

UK mixed code of corporate governance:

A.2- Division of Responsibilities

There must be a transparent division of responsibilities at the head of the company between the running of the board and the chief duty for the working of the company’s business. No one particular person should have unfettered powers of choice. A.3- The Chairman

The chairman is liable for leadership of the board and guaranteeing its effectiveness on all aspects of its role. Source: Financial Reporting council – Combined code of company governance June-2010 found on, Page-10 Section A: Leadership [PDF FILE]

Practice at British Telecom (BT):

At British Telecom (BT) there are clear segregation of duties between who is operating the corporate and who’s working the board. The Chairmen is the face the company and heads the board while the CEO is the face of board and heads the management of the company i.e. the company’s operation.

Roles of the Chairman and the Chief Executive

The roles of the Chairman and the Chief Executive are separate. They are set out in written job descriptions, approved by the Nominating & Governance Committee.

The Chairman

The Chairman offers leadership for the Board on all features of its function.

His key activities include:

• Chairing the Board, Nominating & Governance Committee, and the Committee for Sustainable and Responsible Business; being a member of the BT Pensions Committee and selling a culture to facilitate open debate and acceptable challenge

• Consulting the non-executive administrators on corporate governance issues, particularly the Senior Independent Director

• Reviewing the individual performance of the non-executive administrators and the Chief Executive

• Holding regular meetings with the non-executive administrators at which they focus on matters without the manager directors being present

• Making positive, with the Chief Executive and the Company Secretary, that the Board is saved correctly informed, is consulted on all issues reserved to it and that its decisions are made in a timely and thought of way that permits the directors to satisfy their fiduciary duties

• Making sure that new directors obtain full, formal and tailor-made induction, and that each one directors continue to replace and refresh their expertise and knowledge

• Making certain that the views of the shareholders are identified to the Board by way of the Company Secretary and considered appropriately

• Representing BT in specified strategic and Government relationships, as agreed with the Chief Executive, and customarily appearing as the bridge between
the Board and the manager team, particularly on BT’s broad strategic direction.

The Chief Executive

The Chief Executive has final executive duty, reporting to the Board, for the day-to-day operating of the business and the success of the group. He is liable for leading the management and the operational efficiency of the group, in addition to the effective implementation of the technique and the business plan agreed by the Board, while managing the risks.

His position contains:

• Leading the Operating Committee in the day-to-day running of the business

• Maintaining an effective dialogue with major shareholders

• Establishing and sustaining key relationships similar to these with governments, regulators, key industry gamers and opinion formers

• Monitoring the performance of government directors and senior management

• Maintaining an efficient framework for inner controls and Risk administration.

Source: BT’s Annual report 2012, Corporate Governance Section Page-67, found from [PDF FILE]


After the analysis of the function and obligations of Chairmen and CEO, it proves that the board of British Telecom has the clear division of the duties on the prime of the corporate. There is no one dominant person who has all the facility to run the organization. Furthermore the position of Chairmen defines that he’s offering the management to the board. Overall the organisation is following the code provisions (A.2 & A.3) in an efficient method.

UK mixed code of company governance:

B.four – Development

All directors should obtain induction on joining the board and may regularly replace and refresh their abilities and information.

Source: Financial Reporting council – Combined code of company governance June-2010 discovered on, Page-15 Section B: Effectiveness [PDF FILE]

Practice at British Telecom (BT):

On appointment, administrators participate in an induction programme to deepen their information and understanding of the business. They obtain information about BT, the role of the Board and the matters reserved for its determination, the terms of reference and membership of the primary Board Committees, and the powers delegated to these Committees, BT’s corporate governance insurance policies and procedures, together with the powers reserved to the group’s most senior executives, and the most recent financial info.

The induction programme also includes meetings with each of the executive and non-executive administrators, members of the Operating Committee and senior executives throughout the business. In addition to the induction programme, an on-going programme of director growth and company consciousness has been developed to provide the non-executive directors an appreciation of the completely different components of the enterprise both in the UK and abroad.

Directors are continually updated on BT’s business, the competitive and regulatory environments in which it operates and different adjustments affecting BT and the communications business as a complete, by written briefings and meetings with senior BT executives.

Source: BT’s Annual report 2012, Corporate Governance Section Page-68, under
Training and data heading, found from [PDF FILE]


The induction coaching and on-going programme of director’s development at British Telecom proves that the group is in effective compliance of code provision (B-4 Development)

UK mixed code of company governance:

B.6 – Evaluation

The board should undertake a proper and rigorous annual evaluation of its personal efficiency and that of its committees and individual administrators.

Source: Financial Reporting council – Combined code of company governance June-2010 discovered on, Page-16 Section B: Effectiveness [PDF FILE]

Practice at British Telecom (BT):

Boardroom Review is carried by an impartial external organisation, which was appointed, after a young train, to conduct a Board analysis. The methodology included one-to-one interviews and remark of a Board meeting to offer an unbiased exterior view of the Board’s effectiveness. A report was produced and mentioned on the Board assembly in May 2011. The report described a variety of areas the place the Board was efficient and functioning properly. In addition there were some areas where enhancements could be considered and a variety of actions had been agreed by the Board

Source: BT’s Annual report 2012, Corporate Governance Section Page-68, underneath Board analysis heading, found from [PDF FILE]


The efficiency of administrators is very important in the progress of a corporation which must be evaluated by the board, as per UK code of corporate governance. At British Telecom the board room evaluate is carried out by an unbiased external organisation, which seems that the organisation has considerably effective compliance with code provision (B.6).

UK combined code of corporate governance:

B.7 – Re-election

All administrators must be submitted for re-election at regular intervals, topic to continued passable performance

Source: Financial Reporting council – Combined code of corporate governance June-2010 discovered on, Page-17 Section B: Effectiveness [PDF FILE]

Practice at British Telecom (BT):

At every annual general assembly, any director who was elected or last re-elected a director at or earlier than the annual general meeting held within the third year earlier than the present yr, must retire by rotation. Any director appointed by the administrators automatically retires on the next following annual basic meeting. A retiring director is eligible for re-election. In addition to any energy of elimination under the 2006 Act, the shareholders can move an odd resolution to take away a director, although his or her time in office has not ended.

They can elect an individual to replace that director topic to the Articles, by passing an strange resolution. A particular person so appointed is topic to retirement by rotation when the director replaced would have been as a outcome of retire.

Source: BT’s Annual report 2012, Additional information (Information for
shareholders) Section Page-183, underneath Directors’ appointment and retirement heading, discovered from [PDF FILE]


The insurance policies and procedures defined for the director’s re-election, specifically the non-executive director’s election for 3 years before s/he has to face re-election reveals that the British Telecom policies are 100% consistent with the Code provision of Re-election (B.7).

2. The high quality and effectiveness of remuneration committee in corporate governance in distinction with committee at British Telecom:

UK mixed code of company governance:

D.2 – Procedure

There ought to be a formal and transparent process for growing policy on government remuneration and for fixing the remuneration packages of particular person administrators. No director must be concerned in deciding his or her personal remuneration.

Source: Financial Reporting council – Combined code of corporate governance June-2010 found on, Page-23 Section D: Remuneration [PDF FILE]

Practice at British Telecom (BT):

Members of the Committee include three impartial non-executive administrators. The Chairman of the Board can also be a member of the Committee if thought of impartial on appointment as Chairman. Chairman and Chief Executive can attend meetings of committee, except in situations the place their very own remuneration is discussed.

The Remuneration Committee agrees the framework for the remuneration of the Chairman, the manager directors and certain senior executives. This consists of the policy for all cash remuneration, government share plans, service contracts and termination arrangements. The Committee approves salaries, bonuses and share awards for executive directors and sure senior executives.

The Committee approves new govt share plans and any modifications and makes recommendations to the Board which require shareholder approval and oversees their operation. The Committee also determines the idea on which awards are granted beneath the chief share plans to executives reporting to the senior administration staff.

Source: BT’s Annual report 2012, Corporate Governance Section Page-77, beneath “The Remuneration committee (our role)” heading, discovered from [PDF FILE]


The structure of the remuneration committee and the occasional attendance of the Chairman and Chief Executive for the assembly (except the conferences by which their own remuneration is being discussed), proves to be 100% efficient compliance of the code provision (D.2)

3. The high quality and effectiveness of inside controls and Audit & Risk committee in corporate governance in contrast with committee at British Telecom:

UK combined code of corporate governance:

C.three – Audit Committee and Auditors

The board should establish formal and transparent arrangements for contemplating how they need to apply the company reporting and risk administration and internal management rules and for maintaining an applicable relationship with the company’s auditor.

Source: Financial Reporting council – Combined code of company governance
June-2010 discovered on, Page-19 Section C: Accountability [PDF FILE]

Practice at British Telecom (BT):

Following are the main duties of an audit and threat committee for monetary reporting, danger administration & inner controls and exterior audit:

Financial Reporting:

The committee critiques BT’s printed monetary results, the Annual Report & Form 20-F and other published information for statutory and regulatory compliance and stories their views to the Board to assist in its approval of the results announcements and the Annual Report & Form 20-F.

Internal control and threat administration:

The committee evaluation the disclosures made by the Chief Executive and Group Finance Director during the certification course of for the Annual Report & Form 20-F about the design and operation of internal controls or weaknesses within the controls, including any fraud involving management or other workers who’ve a significant role within the company’s monetary controls. The Board, as required by UK legislation, takes responsibility for all disclosures in the Annual Report & Form 20-F. They also obtain reports on the processes for coping with complaints obtained by the company regarding accounting, internal accounting controls or auditing matters.

External Audit:

The committee recommends the appointment and re-appointment of the external auditors and considers their resignation or dismissal, recommending to the Board applicable action to appoint new auditors. They assess the efficiency of the external auditors annually by looking for views on their performance from key stakeholders throughout the group. The results of the assessment are reported to the Committee. The exterior auditors are required to rotate the lead associate each five years, and other companions that are answerable for the group and subsidiary audits every seven years.

Independence of the external auditor:

In order to safeguard the independence and objectivity of the exterior auditors, the Board has determined insurance policies as to what non-audit services may be supplied by the external auditors and the approval course of related to them. The general policies and processes to implement them were reviewed and appropriately modified in the light of the provisions of the Sarbanes-Oxley Act relating to non-audit companies that exterior auditors may not carry out.

Source: BT’s Annual report 2012, Corporate Governance Section Page-70, beneath “Audit & Risk Committee Chairman’s report (Our role)” heading, discovered from [PDF FILE]


After the evaluation of the precept duties of audit and threat committee in distinction with the code provision (C.3), it exhibits that the corporate is in effective compliance. They have formal and clear arrangements for company reporting, threat management & internal management and exterior audit.

4. The high quality and effectiveness of Nominating committee in corporate governance in distinction with committee at British Telecom:

At British telecom, there is a committee known as Nominating and Governance committee which is liable for each nomination and supervision of governance.

UK combined code of company governance:

B.1 – The Composition of the Board

The board and its committees ought to have the appropriate balance
of expertise, experience, independence and knowledge of the corporate to allow them to discharge their respective duties and responsibilities effectively.

Source: Financial Reporting council – Combined code of company governance June-2010 discovered on, Page-12 Section B: Effectiveness [PDF FILE]

Practice at British Telecom (BT):

The Nominating and Governance Committee ensures that there is an applicable steadiness of expertise, expertise, independence and data on the Board and its Committees, evaluations the size and composition of the Board and makes recommendations to the Board.

Source: British Telecom Website – beneath Nominating & Governance Committee – Term of reference (Introduction) [Online]


The code provision (B.) is found to be very effectively complied in line at British Telecom, as is the duty of nominating and governance to have appropriate composition of board

UK mixed code of corporate governance:

B.2- Appointments to the Board

There must be a proper, rigorous and transparent procedure for the appointment of new directors to the board.

Source: Financial Reporting council – Combined code of corporate governance June-2010 found on, Page-13 Section B: Effectiveness [PDF FILE]

Practice at British Telecom (BT):

The Nominating & Governance Committee is headed by Chairmen on the request of the board. There are 4 non-executive directors in the committee, furthermore The Company Secretary and, where applicable, at the invitation of the Chairman, the Chief Executive attends the Committee’s conferences.

Committee identifies the precise expertise and expertise that the corporate is on the lookout for and considers candidates that are put forward by the Board and external consultants. Committee ensures that variety is taken into account as a part of the shortlist course of drawn up by our exterior consultants and, having met potential candidates.

The committee makes a suggestion to the Board and recommendation on succession planning for all Board appointments (and the Company Secretary). Source: BT’s Annual report 2012, Corporate Governance Section Page-72, beneath “Nominating & Governance Committee Chairman’s report (Nominating)” heading, found from [PDF FILE]


The procedure of the appointment of board, defined beneath the function of Nominating & governance Committee proves that the organization is implementing the Code provision (B.2), successfully.

5. The quality and effectiveness of position of non- govt directors in combined code and follow at British Telecom:

UK combined code of corporate governance:

A.4- Non-executive Directors

As part of their role as members of a unitary board, non-executive directors should constructively problem and assist develop proposals on technique.

Source: Financial Reporting council – Combined code of company governance June-2010 found on, Page-11 Section A: Leadership [PDF FILE]

Practice at British Telecom (BT):

The non-executive administrators:

• Provide a robust, impartial factor on the Board and are properly placed to challenge constructively and help develop proposals on strategy.

• Collectively bring experience and unbiased judgment, gained on the most senior levels of worldwide enterprise operations and technique, finance, advertising, technology, communications and political and international affairs and company social duty.

Source: BT’s Annual report 2012, Corporate Governance Section Page-67, underneath Role of the non-executive administrators heading, discovered from [PDF FILE]


The position of Non-executive directors outlined in code of company governance (A.4) and the position of NED’s found at British telecom both proved to be successfully in line with one another.

6. The high quality and effectiveness of position of company secretary and apply at British Telecom:

In most nations, the appointment of an organization secretary is a compulsory situation of firm registration. This is as a result of the company secretary has necessary responsibilities in compliance, together with the duty for the timely filing of accounts and other authorized compliance points. His or her main loyalty is always to the company.

Technical information is therefore an important a part of this position. Because of this, many countries’ firm law mandates that for a public company, the post holder must be a member of considered one of an inventory of professional accountancy or company secretary skilled bodies (which includes ACCA).

The major roles embody:

• Maintaining the statutory registers (such because the share register)

• Ensuring the timely and accurate submitting of audited accounts and other documents to statutory authorities (Example. authorities companies’ companies and tax authorities)

• Providing members (Example shareholders) and administrators with discover of related meetings.

• Organising resolutions for and minutes from main company meetings (like the AGM); preserving information from these and different meetings.

Source: ACCA P1 Article (Corporate governance – exterior and internal actors) – twenty fifth August 2009, by David Champbell. Page-1, discovered from [PDF FILE]

Practice at British Telecom (BT):

The Company Secretary:

• Manages the supply of timely, correct and thought of info to the Board for its meetings and, in session with the Chairman and Chief Executive, at other applicable times.

• Recommends to the Chairman and the Chief Executive, for Board consideration the place applicable, company governance policies and practices and is liable for communicating and implementing them.

• Advises the Board on acceptable procedures for the administration of its meetings and duties (and these of the principle Committees), in addition to corporate governance and compliance throughout the group.

The appointment and elimination of the Company Secretary is a matter for the entire Board.

Source: BT’s Annual report 2012, Corporate Governance Section Page-65, beneath Role of firm secretary, discovered from [PDF FILE]


The role of firm secretary discovered at British Telecom in distinction with the role outlined by ACCA P1 Examiner David Champbell in his article, is seems to be almost successfully in line with each other.


Definition of Stakeholders:

A stakeholder is anyone who can have an effect on or is affected by an organisation, technique or project. They could be inner or external and they are often at senior or junior levels. Some definitions counsel that stakeholders are those that have the ability to influence an organisation or project in some way.

Source: [online]

Stakeholders at British Telecom:

A stakeholder in a enterprise is any individual or group with an interest within the decisions made by that firm. Some of BT’s stakeholders are inner to the enterprise, corresponding to its employees. Some are exterior to the business, corresponding to BT’s prospects.

Source: (The occasions a hundred website) [Online]

1. Mendelow’s mapping of Stakeholders:

Mendelow gave the following matrix of stakeholder mapping based on the curiosity and energy of stakeholders:


Source: [online]

Assessment of stakeholder’s mapping at British Telecom (BT):

Following are the principle stakeholders of British Telecom:

• Shareholders

• Government / Regulators

• Employees

• Customer

• Suppliers

• Communities

Source: (The occasions 100 website) [Online]

These stakeholders of BT’s Telecom could be categorized in grid, based mostly on Power and Interest supplied by Mendelow as:


2. Stakeholders Classification (Internal and External Stakeholders):

Perhaps the best and most simple distinction is between stakeholders inside the organisation and people exterior. Internal stakeholders will sometimes include staff and management, whereas exterior stakeholders will include prospects, competitors, suppliers, and so forth. Some stakeholders shall be more difficult to categories, similar to trade unions which will have elements of each inside and exterior membership.

Source: ACCA P1 Article (All about stakeholders – half 1) – 08 January 2008, by David Champbell. Page-2, underneath heading “Internal and external stakeholders found from [PDF FILE]

Assessment of inner and external stakeholders at British Telecom (BT):

Internal Stakeholders:

• Share holders

Shareholders are essential stakeholders as a outcome of they put cash into the enterprise. They contribute capital to the enterprise and anticipate to share within the company’s income. BT needs the support of shareholders to supply funds to grow the business. The firm due to this fact maintains close relations with its major shareholders. It will hold shareholders informed about its financial outcomes and its plans for progress.

BT rewards its shareholders by giving them a share of the earnings. This is named a dividend. BT pays dividends twice a 12 months.

Shareholders have a direct curiosity in seeing the company turn into more worthwhile. BT goals to extend its earnings by:

➢ Growing its business by way of providing new goods and services to extend sales

➢ Building the corporate status to win new prospects.

A firm can also improve its earnings by becoming more environment friendly. It can increase its revenue margin by decreasing prices. This will permit it to pay larger dividends, bettering the return shareholders get on their funding.

Source: (The times 100 website) internal-stakeholders.html [Online]

• Employees

Employees are one of a company’s most important property. A dedicated workforce helps a business to realize its goals. Employees convey abilities similar to creativity and problem solving.

To improve the company’s core competencies, BT runs programs to enhance the abilities of its employees. For instance, BT has used Apprenticeship Frameworks to allow more than 7,000 of its employees to achieve a job-related qualification in a single year.

All employers want a motivated workforce. Dissatisfied or unhappy employees tend not to produce good work and can look for different jobs.

To gain their commitment, BT goals to offer its employees with enticing rewards and good career prospects. It additionally allows versatile working preparations. For instance, almost 9,500 BT staff currently work at home.

It helps the company to attract and retain a diverse workforce. It also reduces the company’s environmental impacts as fewer workers travel to work.

Source: (The times a hundred website) internal-stakeholders.html [Online]

External Stakeholders:

• Government and business regulators:

BT must comply with rules and rules set by the governments and trade regulators in the countries during which it operates. These stakeholders directly affect BT in a number of ways. They issue BT with licenses to operate in the telecommunications sector. Without these licenses, BT would don’t have any enterprise. For instance, BT must comply with the European Union’s RoHS directive, which restricts the use of sure hazardous substances in electrical and electronic tools.

Source: (The occasions a hundred website) external-stakeholders.html [Online]

• Customers:

A concentrate on clients is at the heart of every little thing BT does. To entice and maintain its prospects, BT seeks to offer the services and products demanded by businesses and consumers. This requires continuous funding in new companies. For instance, BT is investing £2.5 billion on creating wider Super Fast Broadband entry across the UK.

Source: (The instances 100 website) external-stakeholders.html [Online]

• Suppliers:

BT has a worldwide supply chain. It requires suppliers that may ship the supplies, components, products and services that may enable BT to realize a technical and aggressive advantage. Cost and quality are important considerations. However, BT additionally maintains an environmental focus to its relationships with suppliers. For instance, when the corporate purchases components and merchandise at low value from the Far East, managers examine that the low price is balanced towards environmental and different impacts. There is a partnership approach.

Source: (The instances a hundred website) external-stakeholders.html [Online]

• The Community:

All firms can have an impact on the communities in which they operate. This is why the broader neighborhood is an important stakeholder. These impacts may be optimistic. For instance, businesses provide jobs, which have an effect on native economies.

BT demonstrates its social duty via its environmental initiatives. It is also playing a job in neighborhood constructing. One method it’s doing this is by serving to to make broadband web access more broadly out there. 9.2 million Adults in the UK have never used the internet. BT hopes to handle this by way of its ‘Get IT together’ marketing campaign to help individuals get on-line. By bettering its networks, BT could make a contribution to tackling social exclusion.

Source: (The occasions a hundred website) external-stakeholders.html [Online]

3. Assessment Stakeholder VS Stockholder principle:

Essentially, proponents of the stockholder concept argue that because organisations are ‘owned’ by their principals, the agents (directors) have an ethical and legal responsibility to only take account of principals’ claims when setting goals and making choices. Hence, for a joint-stock business such as a public company, it could be assumed that because principals (shareholders) search to maximise their returns, the sole duty of brokers is to act in such a means as to attain that.

Stakeholder theorists, in contrast, argue that as a end result of a business organisation is a citizen of society, enjoying its protection, support and advantages, it has an obligation to recognise a plurality of claims in the identical means that an individual might act as a ‘responsible citizen’. In effect, this means recognising claims along with these of shareholders when reaching selections and deciding on methods.

Source: ACCA P1 Article (All about stakeholders – half 2) – 07 February 2008, by David Champbell. Page-1, under heading “THE STAKEHOLDER/STOCKHOLDER DEBATE” found from [PDF FILE]

At British Telecom:

Different teams of stakeholders can have conflicting pursuits. Here are four examples of potential conflicts involving BT stakeholders:

• As part of its Next Generation Access programme, the corporate wants to put in new optical fiber cables to have the ability to provide super-fast broadband companies throughout the country. This may be welcomed by prospects, who will get a greater service, however may trigger disruption and site visitors delays due to roadworks while the cables are being laid.

• BT’s investment in neighborhood activities may be contentious. Some shareholders could object to the corporate investing in actions that gained’t contribute on to profits.

• Another potential conflict results from BT’s pricing policy. Customers naturally need low costs, but shareholders could feel that greater prices would generate larger income.

• BT has a policy of no compulsory redundancies. This offers safety for employees. However, shareholders may really feel that the policy might adversely affect the company’s profitability and efficiency.

Directors and managers at BT must try to manage these conflicts in a way that keeps stakeholders happy. This usually entails finding an answer that strikes a steadiness between competing pursuits. On event, it will not be potential to satisfy everyone. At least one of many stakeholder teams will really feel that they’re shedding out. However, good decision-making involves keeping all parties proud of the finish result.

Source: (The times a hundred website) stakeholder-conflict.html [Online]


In time period of research carried out on corporate governance practices at British Telecom by six different angles, it would rightly be concluded that the organization is discovered to be very successfully in compliance with finest practices. Furthermore, it was interesting to notice that British Telecom has the committee to examine the compliance of corporate governance rules according to the corporate governance framework described by the board. This committee is combined with Nominating committee and termed as ‘Nominating and Governance Committee’.

The group points a separate report on company governance attached with their Annual report, to be able to get their share holders knowledgeable about the best practices are being adopted. British Telecom’s Board and administration have a agency believe on the corporate governance as a best practices, that why one of the best practices and code provisions displays of their insurance policies and conduct. Furthermore British telecom considers their stakeholders as their companion to the company, and they take keen steps to fulfill the calls for of stakeholders.

In a nutshell, the organization has sturdy compliance with greatest practices and so they hold their stakeholders properly happy, which makes the company’s image strong in the market over the years.

List of References:

1. Financial reporting web site accessed on, mixed code of corporate governance – June 2010 version revealed by monetary reporting council. Main principles of Sections A – E: (Leadership, effectiveness, accountability, remuneration and relations with Shareholders) Page 9-26 [PDF File].

2. British Telecom website accessed on Shareholders & analysts> Annual reviews 2012 [PDF file].

3. British Telecom website accessed on BT Group> our company> Corporate governance assertion [online].

4. P1 – BBP examine Text, version 2011examination, chapter 1 – three on corporate governance.

5. David Campbell P1 examiner articles [all about stakeholders half 1 & 2 and company governance, external and internal actors] accessed on ACCA website [] Students> Qualification resources > ACCA Qualification> P1 Governance, risk and ethics> Past papers and syllabuses technical articles [Online/PDF version].

6. Wikipedia website accessed on 2012 version.

7. The Times one hundred web site accessed on [] >bt> stakeholders-as-partners (what-is-a-stakeholder, Internal-stakeholder, exterior stakeholder and conflicts of stakeholders).

8. accessed via [] / stakeholder-analysis.

9. ACCA Web web site [] Home> Members> Professional standards and ethics> Rules and requirements > Rule Book 2012 [PDF FILE]


1. British Telecom Website –

2. Financial reporting council –

3. P1 BBP study textual content.

4. Wikipedia –

5. ACCA Technical Article –

6. Corporate governance –

7. London Stock Exchange –

8. The one hundred times web site –

9. –

10. Investopedia website –

11. The Economist website –

12. European company governance Institute –

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