Английский язык. Практический курс для решения бизнес-задач

Exercise 3. You are a corporate governance expert hired by a Russian company to introduce appropriate corporate governance procedures and develop its corporate governance code. You have to explain to the CEO the potential benefits of the good corporate governance track record and create the corporate governance principles for the company.

Exercise 4*. Fill in the blanks using terms given below.

Techniques that Keep Staff Toeing the Line

According to Sir David Tweedie, chairman of the UK International Accounting Standards Board, the……. and negligence that made a mockery of…….. in the US came down to one thing: greed. «The excessive………. was obscene,» he says. «75% of…….. issued by major companies in America went to the top five…… By fiddling the……., you could end up making so much money from stock options that you didn’t have to work thereafter – and neither did your family for several generations.»

Sir David is equally scathing about those involved in corporate governance who……. to prevent problems. In his view, executive…… failed; non-executives were kept in the dark;……. committees failed;……. fell asleep at the wheel;…… agencies did none too well;…… missed it; the…….. failed to regulate; and the…….. and lawyers were part of the problem, helping companies with their questionable……..

«That is why it was such a shock to corporate America,» he explains. «It wasn’t just one little piece gone wrong, but a whole line of…….. that went flat. The whole system was collapsing.»

Since 2001, the debate about corporate governance has spun off in many directions. It has taken in executive remuneration, financial……. standards, the…….. of non-executive directors, auditor……… investor trust, the split between the roles of…….. and chief executive, and wider……… The unifying theme in all such……. is that they primarily concern company boards. The subtext is clear: corporate governance is the preserve of the very…….. business people.

Yet corporate governance has far wider resonance. The Turnbull Report, aimed at spreading……. in UK governance, made clear that while…….. for internal control ultimately rests with a board…….. involves employees too. «All employees have some responsibility for internal control as part of their……… for achieving objectives,» the report states. «The system of internal control should be…….. in the operations of the company and form part of its culture.»

Bill Waite, chief executive of the Risk Advisory Group, says that like so many other things in business, governance involves the…….. and…….. of a workforce. «The biggest risk in any company comes from the…….. Even where the…….. is external, you usually find an employee has been befriended and then exploited.»

On the other hand, staff can also be antennae for…….. When investigating the Tyco International fraud, the Manhattan District Attorney remarked that he found it «extremely troublesome… that no………. had come forward.» The majority of FTSE 500 companies now have these………. in place.

Traditionally, of course…….. practices have been seen as somewhat beneath the interest of boards. Yet if the systems and procedures operating within an organisation to…….. risks are governance issues, theoretically that ought to change. So how far should companies go towards embedding……… behaviour?

Andrew Wilson, director of the Ashridge Centre for Business and Society, says the answer depends on both the…….. culture of individual companies and the…….. business cultures in which those companies………. US companies tend to take a very……….-driven attitude to governance, setting down on paper exactly what is expected of employees. «Gift policies sometimes say a case of wine is inappropriate, while a bottle of wine is fine – it is that detailed», he explains.

Meanwhile, European companies prefer broad principles that allow greater……. for individual……… Ideally, says Mr. Wilson, governance should allow for «disciplined……….».

«A rule-based, bureaucratic……… encourages people to think about what they can get away with, when what you want are sensible judgements in line with business…….. Perhaps, the classic question to ask is „How would I feel if this (action) was reported in the press?“

Although detailed rules make it easier for an auditor to control its clients, they also make it easier for people to work out exactly what to do to get around them. «An investment bank will come up with a……. in three seconds,» he says. «In contrast, a……. will catch all variations.»