Finance Assignment: Corporate Governance Performance Analysis Of Britvic Company

Question

Task: You will be assigned a FTSE 100 or FTSE 250 company.
You are expected to prepare a finance assignment to case report on the following –

(i) Corporate Governance
You are required to assess the quality of corporate governance within your chosen company. The purpose of good corporate governance is to deal with the agency problem where appropriate and to ensure companies are well run, thereby avoiding many of the well-publicised problems associated with major companies in recent times. Among other ways to achieve this, UK Corporate Governance Code (link provided below) suggests that listed companies should have Nomination Committees, Remuneration Committees and Audit Committees. Not only are these structures designed to ensure that monitoring and bonding of the senior executives takes place, but disclosures as to the ability of senior management to maximize profitability and identify and manage risk should also be present.
This part of your report should not merely state what the company does but provide a well-argued assessment of the governance of the company, and whether the objectives and practices of good corporate governance are met by the company. There will be a lecture on corporate governance. You should also be familiar with The UK Corporate Governance Code and you will find a useful chapter on the subject in Elliot and Elliot, Financial Accounting and Reporting.

The link to the UK Corporate Governance code is:
https://www.frc.org.uk/corporate/ukcgcode.cfm

Answer

Introduction
The following report on finance assignmentis based on the overall accounting and compliance of the Britvic company that is based in England. The company is listed on the London Stock Exchange and the overall revenue of the company is in billions. In the following report we will discuss the overall corporate governance performance of the company and whether they have incorporated all the practices as per the UK Corporate Governance Code under corporate governance. The overall share performance of the company is also discussed by providing various graphs that shows the movement of the share prices based on many factors. Along with that the overall financing of the company is also discussed with respect to his long and short-term finance sources.

Corporate Governance
Corporate Governance is the overall rules and practices under which a business is operated, regulated, and controlled. It encompasses all the various internal and external factors that affects the position of the stakeholders of the company. It is important that all listed companies should follow corporate governance practices in order to operate their businesses in the most ethical ways possible as per legal and compliance standards. In this report we will discuss the corporate governance policies of Britvic Company and whether they are in alignment with the UK Corporate Governance Code(Webster, 2017). The main principles as per the UK code are Leadership, Effectiveness, Accountability and Remuneration. In case of the Britvic Company, it has complied with these principles and the same has been stated in their Annual report, a screenshot from the same has been provided. The Company has issued a Corporate Governance report and along with that reports from the Nomination Committee, Remuneration Committee and Audit Committee states the same. As per the chairman of the company, the company has tried to manage the boards time across people, planet and performance and have tried to align the overall purpose and value to the focus of the board. The company has a fair board leadership that consists of the board of directors that aim for long term sustainable growth of the company. The board works for effective stakeholder shareholders engagement, playing whistle blower for the company when needed, working towards risk management and internal control management, and providing better strategies that would help the company to grow. There is proper division of authority and segregation of work that makes the board more responsible. Details about People who hold important position in the board have been mentioned in the governance report. The company has an audit committee that works towards regulating the overall work done by the auditors, policies and procedures that will ensure that the internal and external audit functions are independent and effective. It also manages the engagement between the company and the auditors(Werner, 2017). The audit committee also foresees the major risks that the company is willing to take in order to achieve the long-term strategic objectives. The Remuneration Committee deals with providing the remuneration policy that is in alignment with the long-term goals of the company. It also foresees that a transparent and effective policy is in place for the remuneration of the senior executives of the company(Yadao, 2018). It also makes sure that independent judgement and discretion is in place while framing their remuneration policy for the company. Details about all this have been provided in the annual report of the company. The 4Ps of corporate governance are people, purpose, performance and process and the management has tried to incorporate all of these elements in their overall corporate governance approach that they have mentioned in their corporate governance report. The company also have a strategic report in place that mentions about the long term and short-term goals of the company and how they have incorporated all the elements of corporate governance in the same aspect for long term success. Few screenshots from the corporate governance report of the company have been provided below-

Few important links have been provided here-
Annual Report of the Company:
https://www.britvic.com/media/3szp1k2g/britvic-annual-report-2021.pdf

UK Corporate Governance Code:
https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code

References
Webster, T., 2017. Successful Ethical Decision-Making Practices from the Professional Accountants' Perspective. ProQuest Dissertations Publishing, 3(1), pp. 142-156.
Werner, M., 2017. Financial process mining - Accounting data structure dependent control flow inference. Finance assignmentInternational Journal of Accounting Information Systems, 25(1), pp. 57-80.

Yadao, J., 2018. Forensic accountants and big data.