Subject Name- corporate social responsibility
need in this research legitimacy theory, strategy KPI, balanced score card and make sure you will make question with answer from this case study according to your thinking. I will also attached
some power point slides go through those slides and find information regarding that case study and make question and answer like what type of question our lecturer can ask from us regarding this
case study. You can also find information from news bulletin and other social media and any more…
Final Exam Solutions
Question 1: Directors Responsibilities and Fraud (25 Marks)
In your research you would have uncovered fraud perpetrated by one of the directors on the company. Discuss how the fraud breaches director’s responsibilities from a fiduciary, financial and
discretionary point of view. Do you consider that other directors may have had responsibilities in this area? Were there any steps the other directors may have taken, apart from better corporate
governance, to minimise the timing or the amount of the fraud.
Problem: CEO had defrauded the company of $6m.
Breach of fiduciary and financial duty.
Breach of Corporations Act
Use of position for personal benefit
To act in the best interests of the company (not damage the company’s reputation)
Damage to corporate image could lead to stakeholder backlash
Tone from the top?
Not allowing directors to authorize payments
Question 2: The Board of Directors (25 Marks)
Discuss in some detail the composition of a generic board of directors and the skill sets that you would expect to find. Consider the members of the board of directors of Phosphagenics and their
skill sets. Would you consider that composition of the board appropriate? Why or why not. Do you think that the composition of the board was instrumental in the fraud perpetuated on the company?
Skill set should show abilities in different areas such as financial, marketing, HR as well as those relevant to the company’s industry
Skill set at Phosphagenics was limited – mostly technical area, though some had business experience
Arguably not appropriate (quality of argument in this question is important)
Lack of financial and corporate governance skillset could have been instrumental
Question 3: Corporate Governance to prevent Fraud (25 Marks)
Corporate governance considers the processes and procedures of the company. Consider how the Esra Ogru managed to defraud Phosphagenics of over $6 million. Describe how she was able to syphon such
a large amount of money from the company. Critically evaluate the weaknesses that you suspect are in the company’s governance. What processes would you suggest should be put in place to prevent a
recurrence in this area?
There was collusion, “stick with me and I’ll make you rich” Orgu – this question should show level of research undertaken by the student. Three types of fraud on the company: false invoices; credit
card and unprofitable research (searching for a cure for the child). Company should have controls. Before expenditure such as vetting contractors and having in place an agreement with holders of
company credit cards and after expenditure, including checking credit card receipts and authorizing payments.
Question 4: Strategy and Key Performance Indicators (25 Marks)
Using your research, comment on the strategy within the company at the moment. What recommendations do you have? If the company carries out your plan, suggest at least four KPIs that would be
useful at the company level. What individual KPIs would you set to align individual behavior with these company level KPIs?
As argued by the student. KPIs should be specific and measurable and focused on the recommended strategy would be given higher marks. Answers that suggest a new strategy, remembering that
strategies are at least a three to five year commitment, would be given higher marks. Answers that commented on increasing controls to reduce the risk of fraud did not really answer the question –
since this is not really a strategy, rather good corporate governance.