Transparency in Corporate Governance: A Case Study of Tesco

CORPORATE STRATEGY
AND GOVERNANCE

Table of Contents
AIM.............................................................................................................................................................3
INTRODUCTION.......................................................................................................................................3
LITERATURE REVIEW............................................................................................................................3
CONCLUSION AND RECCOMENDATIONS..........................................................................................5
REFERENCES............................................................................................................................................6

AIM
To analyze the issue of transparency in corporate governance and its impact on the
organizations- a case study of Tesco
INTRODUCTION
Corporate governance is basically the method and system of the rules and processes
through which the organization is controlled as well as maintained. The major issues which has
been faced by Tesco is the failure of corporate governance and transparency. Transparency forms
the basic and core element of the corporate governance and thus mainly relates to the disclosure
of the all information to their shareholders and other stakeholders. The issue of transparency has
affected Tesco to a great extenet and thus has impacted its overall financial position (Filatotchev,
Poulsen and Bell, 2019). Transparency is one of the major issue within this corporate
governance. Transparency is highly important within each and every organization as
shareholders and investors invest their money with the reason that company will remain
transparent to them regarding all the decisions. Ensuring transparency not only helps to gain the
trust and confidence of stakeholders but also helps the organization to minimize the loses and
gain more profit. Tesco in the year 2014 faced a great and massive failure of corporate
governance where the company misapprehended their shareholders and investors by showing
higher profit margin. In the subsequent year, Tesco overstated the profit to its shareholders by
£250m and this affected the financial position of Tesco to the high extent. Thus, this lack of
transparency is one of the major issue which affects the organizations to a great extent.
Therefore, it is highly essential to indentify and understand the importance of transparency as the
major pillar of corporate governance. Along with this, the lack of transparency in Tesco has also
affected its stakeholders to a great level and most of the shareholders claimed a handsome fine
on company for misleading them.
LITERATURE REVIEW
The major issue of corporate governance which is transparency affects the position of the
organization in a way. Corporate governance is all about working towards the interest of the