Corporate Governance and Internal Control Procedures at Telesonera

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Advance diploma in accounting

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Table of Contents
Assessment 2...................................................................................................................................3
Question a) Telesonera Ltd. best practices in corporate governances.........................................3
Question b) Combination of roles of CEO and Chair..................................................................3
Question c) Balance of knowledge, expertise and experience of Board.....................................3
Practices of Corporate governance at Telesonera....................................................................3
Internal control procedure at Telesonera.................................................................................4
Assessment 3...................................................................................................................................4
Question 1....................................................................................................................................4
(i) Institutional Investor Intervention.................................................................................4
(ii) Case for intervention......................................................................................................4
Question 2....................................................................................................................................5
Question 3....................................................................................................................................6
(i) Speech on importance and consequences......................................................................6
(ii) The case for the mandatory external reporting..............................................................6
(iii) Content of external report on internal controls.............................................................7
Reference List..................................................................................................................................8

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Assessment 2
Question a) Telesonera Ltd. best practices in corporate governances
There is a membership of nine directors within Telesonera Limited’s Board. Out of these nine
directors, four are executive. Two of these directors are non-executive and the other two are non-
executive directors. About 25% of the remuneration of the non-executive directors is provided to
them in the form of ordinary shares of the company.
The role of the audit and finance committee is appointing the auditors and monitoring their
performances, and reviewing the financial reports. The remuneration committee plays the role of
examining the remunerations, monitoring implementation of option plans and approval of
payments. The role of the corporate governance committee is monitoring the compliance of the
organization with mandatory codes and legislation which affect the ethics and corporate
governance of the company.
The board of the company plays various important roles. These are, approving financial plans
and corporate strategies, addressing and identification of risk areas for the company, appointing
the management team, etc. The chairperson of the company, Mr. Blue has vast experience in the
industry of telecommunications and as the CFO at the competitors of the Telesonera, until 1995.
Ms. Red is the CEO of the company.
Question b) Combination of roles of CEO and Chair
No, it is not possible to have a system of best practices when the roles of the chair and the CEO
are combined. This is because it creates an imbalance of power and has a negative impact on the
shareholder returns. Consequently, shareholders lose their value as well as interest even at high-
performing companies.
Question c) Balance of knowledge, expertise and experience of Board
Practices of Corporate governance at Telesonera
The company has a clarified role of the board in its strategies. It clearly understands that the
CEO is employed by the Board and also recognizes that the risk governance is the responsibility
of the Board itself. An effective infrastructure regarding governance has been built, implemented