Cadbury report

'The Cadbury Report, titled Financial Aspects of Corporate Governance, is a report of a committee chaired by Adrian Cadbury that sets out recommendations on the arrangement of company boards and accounting systems to mitigate corporate governance risks and failures. The report was published in 1992. The report's recommendations have been adopted in varying degree by the Europian Union, the United States, the World Bank, and others.' This is the definition that Wikipedia gave which I don't understand a single bit.



Here's another definition :

The Cadbury Report, is a report, which gives a recommendation on the arrangement of company boards and accounting systems, to reduce corporate governance risks and failures. It is titled Financial Aspects of Corporate Governance and was published in 1992. Many large organizations such as the Europian Union, the United States and the World Bank has made use of some of the recommendations.

The committee, chaired by Sir Adrian Cadbury, to write the report, was established in response to the occurrence of financial scandals in the 1980’s involving UK listed Companies, which led to a fall in investor confidence in the quality of company’s financial reporting. Their aims were to investigate the British corporate governance system and to suggest improvements to restore investor confidence in the system.

The Committee was set up in May 1991 by the Financial Reporting Council, the London Stock Exchange, and the accountancy profession. The report embodied recommendations based on practical experiences and with an eye on the US experience, further elaborated after a process of consultation and widely accepted. The final report was released in December 1992 and then applied to listed companies reporting their accounts after 30th June 1993.

As such the Committee addressed the financial aspects of corporate governance and subsequently produced a Code of Best Practice which all boards of UK listed companies should follow. They recommended that listed companies should incorporate a formal statement into their Report and Accounts outlining whether or not they complied with each of the Code’s provisions. A reason is to be given if they do not comply. The Report also recommended that the compliance statements made by the companies be reviewed by auditors before releasing their Annual Report.

The key focus of the provisions of the Code of Best Practice relates to the composition of the Board of Director’s, the appointment and independence of non-executive directors, the service contracts and remuneration of executive directors, and company’s financial reporting and controls.

Some of the main recommendations made are as follows:
• The majority of non-executive directors should be independent of management and free from any business or other relationship;
• non-executive directors should be appointed for specified terms;
• service contracts should not exceed three years;
• executive remuneration should be subject to the recommendations of a Remuneration Committee made up entirely or mainly of non-executive directors; and
• an Audit Committee, comprising of at least three non-executive’s, should be established.

Following publication of the Code, the London Stock Exchange introduced a requirement into the Listing Rules requesting all companies to include a statement of compliance, or non-compliance, with the provisions, in their annual Report and Accounts. Furthermore, institutional investors and Investment banks urged those listed companies for which they provided sponsorship and advice to adopt the provisions. As a result many companies changed their governance procedures and conduct accordingly.

PEST

How the PEST affect Cheryl's dad's environment

Political Environment

As my dad is the owner of a tuition centre, he is required to apply for a licence with the education department before the teachers can start teaching. Each of the teachers teaching at the tuition centre also needs to have a licence to teach there. For safety reasons, he also has to fix a fire extinguisher in each of the classrooms as well as have a few emergency exits in case of a fire. As the government has determined the maximum number of hours each teacher is allowed to be teaching a week, my father has to make sure that that rule is abided by all the teachers.

Economic Environment

Because of the recent increase in oil and food price, all the teachers increased their fees.

Social Environment

It has become a trend that school alone is not enough. Students now are unable to study and revise by themselves. Instead they take tuition classes for every single subject. As that is so, the demand for tuition teachers has also increased.

Technological Environment

The improvement of technology nowadays constributes to modern teaching skills. The teachers use dics instead of tape, projectors instead of the old blackboard and chalk. Even the students use their phones to look up meanings of words instead of using the dictionary.

About My Mother

Meet my beloved mom
My mother is a tailor. She is the owner of Sister Tailor, located at Taping, Perak. My mom started her business in 1985; it has been operated for 23 years. My mother mostly does all the important things like taking customers’ measurement, cutting out the outline. Then the outline will be distributed to her workers who are my mom’s relative to sew it.

Social arrangement of my mom’s company is very simple. It consists of my mom, the owner, and two workers working under her instruction.

My mom’s company collective goals are to meet customers’ demands regardless how difficult they are. Besides, her company would like to produce high quality of malay clothes to customers to satisfy them. Other than that, my mom's company wishes to make the baju kurung, baju kebaya and so forth more trendy.

My mom’s company controls their performance by ensuring her staffs possess necessary skills. Other than that, my mom always supervising her worker to avoid mistake happen. Furthermore, my mom takes good care of worker's social, like giving them annual holidays.

My mom’s company is just restricted in Taiping area only. Most of the regular customers are local people from Taiping city. Sister Tailor is sole proprietorship as my mom is doing business in her own name and in which there is only one owner.

~Pei Leng~

PEST

How PEST affect the organization that they are working.

Political/legal

My mom is the owner of the Sister Tailor. Because of that, she needs to adhere to certain laws. For example, she needs to follow the Employment Law in order to maintain her company reputation. My mom is responsible to takes care of workers’ welfare, give them annual leave, and also minimum wages. Besides, she needs to install fire alarm in her company to ensure safety of workers in case her company catch fire. My mom must abide all the laws in order not to sue by the worker.

Economic

Increasing price of the thread and fabric will affect my mom’s organization. Customers that belong to middle and lower class of the society will unable to afford the huge cost. They will choose to buy traditional Malay clothes at market instead of patronizing my mom’s shop. As a result, this will certainly contribute loss to my mom’s shop.

Social/demographic

Malaysia consists of three major races that are Malay, Chinese and Indian. If there is an increase in Malay population in Taiping, my mom’s shop will gain a lot of profit. This is because; mainly of her customers is Malay. Other than that, rising in standards of living in Taiping will contribute a lot of business to my mom.

Technological

Sewing machines are essential component for my mom’s organization. Without it, productivity will be very low as workers need to sew it by themselves and thus consume a lot of time. Then, it will contribute loss to my mom‘s shop as customers will look for more efficient shop.

~Pei leng~

PEST vs MoNKeY's DAD

What is PEST??

PEST factors refer to the:

• political change
• economical change
• social change
• technological change

How do them affect MoNKeY's dad occupation??

P-POLITICAL CHANGE

When the government changes the language of teaching Science and Mathematics into English instead of Chinese in Chinese primary school, my dad and his staff at school have to arrange teachers for training so that they can handle the class afterwards.

E-ECONOMICAL CHANGE

As the economics of the country changes, the budget of the school also changes. The price of books from suppliers also varies. Hence they have to find some alternatives in order to get lower prices and better qualities of books.

S-SOCIAL CHANGE

Nowadays the discipline of students are no longer the same as what we undergoes before. Besides parents are so protective towards their children now. Hence the school have to change their policies in handling the students now. 'Canning' education is no longer working to the generation now.

T-TECHNOLOGICAL CHANGE

The improvement of technology nowadays constributes to modern teaching skills. The school now uses computer and projectors in certain subjects for teaching instead of using chalks and blackboard.

Shinn's Dad

My dad, Leslie See, is one of the four partners in a private limited construction company named Kindah Construction based in Shah Alam. He is the the Executive Director of the company and the business focuses more on the constructions of houses, warehouses and infrastructures. The two major roles that my dad does are the marketing to obtain clients as well as site supervising and surveying to ensure the landscape can be used for construction.

The social arrangement of Kindah Construction starts off with the Chairman who holds the highest seat in the construction business. Following and below the Chairman is the Managing Director. Under the Managing Director are both the Chief Operating Officer and the Executive Directer who are on equal seatings. These are then followed up by five departments which are the administration, accounts, contracts, purchasing and project department.

Getting good developers and good paymasters are the collective goals of the organization. Other than that, the collective goals of the company includes completing and fulfilling their contracts on time with minimum cost and maximum profit. Kindah Construction controls their performance in a few ways. Among the few ways are having weekly or monthly meeting, organizing training programs and having site meetings. The company is also following the United Kingdom's ISO Quality Management System Standards which has been approved by Lloyd's Register Quality Assurance.

As of now, the company boundary is within the Penisular Malaysia, but the company is having a future oversea outlook. The company mostly does private jobs which has nothing to do with the government and therefore the government do not majorly affect the business. However government policies such as raising petrol fuel prices has affected the company's business. An example would be people giving up on thier plans to buy houses due to rise in petrol fuel prices.

Types of Ownership of Company

SOLE PROPRIETORSHIP

A sole proprietorship is a type of business entity which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. All debts of the business are debts of the owner. It is a "sole" proprietorship in the sense that the owner has no partners. A sole proprietorship is not a corporation; it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. A sole proprietorship does not have to be concerned with double taxation, as a corporate entity would have to.

A sole proprietor may do business with a trade name other than his or her legal name. In some jurisdictions, for example the United States, the sole proprietor is required to register the trade name or "Doing Business As" with a government agency. This also allows the proprietor to open a business account with banking institutions.

Advantages of Sole Proprietorship

An entrepreneur may opt for the sole proprietorship legal structure because no additional work must be done to start the business. In most cases, there are no legal formalities to forming or dissolving a business. A sole proprietor is not separate from the individual; what the business makes, so does the individual. At the same time, all of the individual's non-protected assets (e.g homestead or qualified retirement accounts) are at risk. There is not necessarily better control or business administration possible with a sole proprietorship, only increased risks. For example, a single member corporation or limited company still only has one owner, who can make decisions quickly without having to consult others.

Furthermore, in most jurisdictions, a sole proprietorship files simpler tax returns to report its business activity. Typically a sole proprietorship reports its income and deductions on the individual's personal tax return. In comparison, an identical small business operating as a corporation or partnership would be required to prepare and submit a separate tax return. A sole proprietorship often has the advantage of the least government regulation.

Disadvantages of Sole Proprietorship

A business organized as a sole trader will likely have a hard time raising capital since shares of the business cannot be sold, and there is a smaller sense of legitimacy relative to a business organized as a corporation or limited liability company. It can also sometimes be more difficult to raise bank finance, as sole proprietorships cannot grant a floating charge which in many jurisdictions is required for bank financing. Hiring employees may also be difficult. This form of business will have unlimited liability, so that if the business is sued, the proprietor is personally liable. The life span of the business is also uncertain. As soon as the owner decides not to have the business anymore, or the owner dies, the business ceases to exist.

Another disadvantage of a sole proprietorship is that as a business becomes successful, the risks accompanying the business tend to grow. To minimize those risks, a sole proprietor has the option of forming a corporation.

PARTNERSHIP

A partnership occurs when you decide to pool capital and work together with at least one more person. In this form of business, you and your partners are joint-owners of the business and therefore will share the business profits and risks.

Advantages of Partnership

• more expertise and more resources for capital.
• business risks can be distributed and shared among partners.

Limitations of Partnership

• All partners carry the same responsibilities. This means that you are liable for risks and debts of the business even if it is caused by the actions of your partners. With unlimited liability, each partner is also liable to use their private resources to meet the partnership's debts.
• Disagreements and disputes may occur among partners and this may disrupt business plans or operational efficiency.
• A Partnership’s lifespan is limited – it may end if any one of the partners has mental disorder, falls bankrupt, resigns or dies.

PUBLIC COMPANY

Definition
- A public company usually refers to a company that is permitted to offer its registered finance (stock, bond, etc) for sale to the general public, typically through a stock exchange.
-Usually, the finance (securities) of a public company are owned by many investors while the shares of a private company are relatively few shareholders

Advantages
- Able to raise funds and capital through the sale of its securities.
- May issue their securities as compensation for those that provide services to company, such as their directors, officers, and employees

Disadvantages
- Required to public financial information that could be useful to competitors