Exam (elaborations)
AUE2602 ASSIGNMENT 2 SEMESTER 1 OF 2022
- Course
- Institution
Detailed memo with an assured distinction
[Show more]
4 reviews
By: nunyabidness • 2 year ago
By: armandvanaswegen50 • 2 year ago
By: kerwinsanssoucie • 2 year ago
By: damarismologadi • 2 year ago
Seller
Follow
Ian09
Reviews received
Content preview
AUE2602 ASSIGNMENT 2 SEMESTER 1 OF 2022QUESTION 1.1.
Evaluate the corporate governance practices of Book Marked according to the principles and
practices of the King IV Code. You should discuss issues relating to compliance and non-
compliance with the King IV Report in your answer.
a) Governing body
• Mr Scott the CEO Is not the Chairman of the board which is in compliance with
King IV.
• The board does not comprise a balance of power executive and nonexecutive
directors; there is only three non-executive directors to 5 executive directors.
There should be a majority of non-executive directors and the majority of the
non-executives should be independent.
• The board should set a balanced target for race and gender representation in
its membership. There are only 2 females in the board of 8 members therefore
non-compliant to King IV.
• The chief executive officer and at least one other executive should be
appointed to the board. The board complies as it has both have Mr Scott the
CEO and Ms Grey and others which are executive directors.
• The board should be assisted by the nominations committee when
appointing new directors. Ms Grey has announced her retirement from
her position as CFO and has recommended that Mr Rhodes, the financial
manager should take over her position on the board, which the board
accepted. This in not compliant to King IV
• There are no independent non-executive directors: All non-executive
directors are members of audit committee and the likes of Kandasamy and
McCoyy have direct dealings with Book Marked. Therefore, he cannot be
considered as independent.
b) Chairperson of the Board
• The King IV Report recommends that the chairperson should be an independent
non executive director. Mr Adofo owns 7% of the equity interest in Book Marked
yet he is the chief executive officer (CEO).
• The chief executive officer should not be the chairperson. Mr Adofo is the
chairperson of the board and he is not the CEO of the board therefore complies
with King IV
FOR ACCADEMIC NEEDS CONTACT INFO@UNITUTORIALS.CO.ZA/0651609781
, • Former CEO should not be elected as chairperson until three complete years have
passed since the CEO vacated his position. Mr Adofo was appointed in less than
3 years of being a CEO of the company. He was 2 years and 11 months only, which
is below the 3 year requirement, therefore non-compliant to king IV.
c) Audit Committee
• The audit committee should consist of at least three members. The committee has
Messrs Stryker, Kandasamy and McCoy as committee members therefore
complies with King IV.
• Each member must be a non-executive (King IV) director of the company.
• Messrs Stryker, Kandasamy and McCoy being members of Auidt committee are all
non- executive directors therefore complies with King IV
• Each member must not be a material supplier or customer of the company, such
that a reasonable and informed third party would conclude that in the
circumstances, the integrity, impartiality or objectivity of that member of the audit
committee would be compromised.
• Mr Kandasamy’s purchases for his bookstore amount to 15% of Book
Marked’s revenue which non-compliant to the above recommendation of King IV.
a) Nominations Committee
• The board should be establishing a nominations committee to oversee nomination,
succession and evaluation of the board performance. There is nominations
committee therefore complies with King IV.
• All members of the nominations committee should be non-executive directors. Mr
Scott is the CEO there is not compliant with King IV as he is an executive director.
• The majority of members are not independent non-executive directors as required
by King IV.
• The chairperson of the should be a member of the committee and may be elected
as chair. Mr Adofo is not a member of the nominations committee therefore no
compliant with King IV.
FOR ACCADEMIC NEEDS CONTACT INFO@UNITUTORIALS.CO.ZA/0651609781
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Ian09. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.85. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
56326 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now