Impact of Corporate Governance Failure on Investors and Stakeholders

This assignment explores the impact of corporate governance failure on investors and stakeholders, using the accounting scandal of Tesco as a case study. It includes a literature review, discussion of primary and secondary research, critical review of research results, and recommendations for improvement in corporate governance.

Corporate Strategy and
Governance

Executive Summary
The current assignment is based on corporate-governance and its need and importance for an
organisation along with evaluating about the Impact of corporate governance failure on investors
and other stakeholder for which an investigation is made ion the accounting scandal of Tesco.
For that purpose both primary and secondary research is taken out which forms a part of this
assignment. The secondary research is based on evaluation of online articles and journal which is
evaluated in literature review where as primary research consists of use of survey method where
data is collected with the help of questionnaire.
Table of Contents
Research Topic: “Impact of corporate governance failure on investors and other stakeholders”. A
case study on accounting scandal of Tesco. ...................................................................................1
Chapter 1: Introduction ...................................................................................................................1
1.1) Background to the study......................................................................................................1
1.2) Problem faced .....................................................................................................................1
1.3) Aim and objectives .............................................................................................................1
1.4) Scope and limitation ...........................................................................................................2
Chapter 2: Literature Review ..........................................................................................................3
.....................................................................................................................................................4
Chapter 3: Discussion about primary and secondary research undertaken .....................................7
Chapter 4: Critical review of results of research ..........................................................................11
4.1) Analysis and interpretation of Primary findings ...............................................................11
4.2) Evaluation and discussion of secondary data ...................................................................19
Chapter 5: Recommendation and action plan................................................................................19
Conclusion................................................................................................................................24
REFERENCES..............................................................................................................................25

Research Topic: “Impact of corporate governance failure on investors and
other stakeholders”. A case study on accounting scandal of Tesco.
Chapter 1: Introduction
1.1) Background to the study
Corporate governance is a vital concept the associated wit the way and system through
which a business organisation is operated and governed by its top authority, brad of directors and
other stakeholders (Bain and Band, 2016). Thus, corporate-governance consist of set of rules and
principles to lead better evaluation and performance of an organisation through meeting viable
needs and expectation of all stakeholders. Therefore current investigation is lead out on Tesco
plc to understand the need and importance of Corporate-governance along with evaluating the
impact of corporate governance failure on investors and other stakeholders.
1.2) Problem faced
The current investigation is based on problem faced by Tesco that is basically associated
with the failure in its corporate strategy that lead to accounting scandal where its financial
statements are misrepresented to boost its profit (Boddy, 2016). Thus, the issues faced by Tesco
is mainly associated with the violation of accounting principles and many other ethical
challenges that lead to failure in corporate-governance of Tesco.
1.3) Aim and objectives
Research Aim
The main aim of current investigation is, “To evaluate about the factors and reasons that
lead to failure in Corporate Governance along with its impact on Investors and other
stakeholders”. An investigation conducted on Accounting Scandal of Tesco.
Research Objectives
 To review about the concept of corporate governance along with evaluating its needs and
importance for an organisation.
 To determine the main challenges and factors associated with the failure of corporate
governance and strategy in a business environment.
 To determine the impact of accounting scandal of Tesco on its investors and other
stakeholders.
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 To recommend the possible ways and strategy that lead improvement in corporate
governance of Tesco in order to perception of its investors and other stakeholders.
Research questions
 Explanation of the concept of corporate governance along with evaluating its needs and
importance for an organisation?
 What are the main challenges and factors associated with the failure of corporate
governance and strategy in a business environment?
 What impact is lead by accounting scandal of Tesco on its investors and other
stakeholders?
 What are the possible ways and strategy that lead improvement in corporate governance
of Tesco in order to perception of its investors and other stakeholders?
1.4) Scope and limitation
The scope of current investigation is based on corporate-governance that is having a wide
scope associated with the needs and importance of this concept for an organisation to have better
decision making and strategy formulation. Furthers, it also consists of main challenges and other
factors that lead to failure of a corporate-governance while operating in the dynamic
environment along with evaluating the impact of accounting scandal and other frauds on the
mind set and attitude of investors and other stakeholders. Thus, the scope of current investigation
is quite wide which also lead information about the possible ways and strategies that lead to
improvement and betterment of corporate governance.
The limitation that could be encountered during this research project and investigation
conducted on accounting Scandal of Tesco is associated with the lack of time and resources that
cloud hamper its efficiency and performance. The another limitation that could be faced is
related with maintaining the authenticity and reliability of collected data to accomplish
objectives of current investigation. Use of Gantt chart and other research methodology is made
for current project to overcome the issues of time and resources management. Further,
implication of effective research method and strategy along with meeting the associated ethic
consideration ensures proper maintenance of authenticity and relatability of collected data.
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Chapter 2: Literature Review
This is the part of research project that consists of information and evaluation of various
scholarly article and other available resources to get better understanding about a research topic
and its associated concepts and objective (Canedo, 2016). Following literature review is based
online journals and other authentic articles on the topic of failure in corporate governance am
evaluation of which is provided below:
To review about the concept of corporate governance along with evaluating its needs and
importance for an organisation.
As per the information provided by Prachi Juneja, 2020, the corporate governance can be
defined as set of rules and procedure that are adopted and applied by the top authority and other
directors and managers to operate or govern business of an organisation. Thus, with respect to
Tesco it means conducting and leading out a business as per the desires and viable expectations
of all stakeholders. Corporate governance thus represent the system, structure and ways by which
all activities and business operations of Tesco are directed and controlled thus it is vital and
important for Tesco to bring a check on efficiency of boards of directors and also keep control on
financial scam and other sandal (Chilisa, 2017).
Further, the corporate governance structure is basically consist of the arrangements and
specifies the distribution of rights and responsibilities among various stakeholders and directors
of a company consists of role and responsibility of both executive and non-executive directors
(Dieleman, 2017). With respect to Tesco Plc, it is having a much effective corporate governance
framework that supports Board of directors to deliver effective Group’s strategy and also support
long-term sustainable growth.
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Illustration 1: Corporate Governance structure of Tesco, 2020
Source: Corporate Governance structure of Tesco, 2020.
Thus, the corporate governance structure of Tesco consists of a board of director along
with a audit committee, Corporate Responsibility Committee, Nomination and Governance
Committee and Remuneration committee to ensure a right level of attention and consideration
for all vital and specific matters (Fink, 2019). Further, the strategic approach and planning of
Corporate governance at Tesco consists of identifying the need and purpose of an initiative to
acheive the gaols along with leading and building action plan to create and implement all
corporate strategy through promoting effective communication between Executive and Non-
executive Directors.
The mission of Statement of Tesco is to create value for its customers and other
stakeholders to earn their life time loyalty. Beside this, The vision of Tesco plc is to become
most highly valued business through serving its customers, communities and leading out loyalty
and commitment in colleagues and shareholder. Thus, implication of Corporate governance
become more vital and crucial for Tesco to lead more transparency and accountability in its
operation to bring higher value and loyalty in its stakeholders (Fearn-Banks, 2016). The main
objectives set out by Tesco Plc consists of Following main points:
 To enhance creativity and innovation level of its employees and corporate governance to
ensure higher productivity in coming 6 months.
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 To bring transparency in corporate governance structure to lead enhanced loyalty and
commitment in its shareholders to lead increase in profits in coming 4 months. To lead better training programmes for its directors to enhance there efficiency and
performance level to build trust in investors in coming 5 months.
The main challenges and factors associated with the failure of corporate governance and
strategy in a business environment
As per the view point of Hopkin. P., 2012, the corporate governance is consider to be one
of the most essential practice that each larger scale organisation must operates in order to remain
sustainable within marketplace. There are several reason due to which an organisation usually
fail in maintaining appropriate corporate governance. Some of the common factor that leads to
failure of corporate governance are mentioned below:
 Lack of board effectiveness: The ineffective board of an organisation is consider to be
main limitation within the skills and competence factor. Additionally it also affect the
ability of non executive director to monitor and control the senior executive. This in turn
influence the efficiency of work as there is not appropriate direction toward the
organisational objectives (Fulford and Hodgson, 2016).
 Boards' risk blindness: - The another factor due to which the corporate governance get
failed is due to lack of vision and estimation of potential risk that may affect the business.
This in turn leads in the failure of organisation to get link the operations with reward and
opportunity.
 Poor leadership on ethos and culture: When the leadership of an organisation is not
operates as per the culture and ethos then this in turn bring negative influence on the
manner in which the employees linked their work with that of objectives. This is so
because leader are one who provide employees with the appropriate direction to work
along with understanding and intrinsic motivation which employees require to perform
well (Grennan, 2019). Defective communication: This is also one of the main reason due to which corporate
governance get failed, as when the senior executes doesn't get right information to work
on then several issues get arises within management as well as execution of operations.
The impact of accounting scandal of Tesco on its investors and other stakeholders
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According to the view point of Martin. W., 2016, The accounting scandal of Tesco has
bring up major issues to the organisation due to dissatisfaction it get from its stakeholders. This
scandal was the result of misrepresentation of financial statement due to management of UK
retailer Tesco. This scandal bring up a huge impact over its stakeholder as TESCO has mislead
the investors with presenting the false information which in turn result into loss of their
investment as it influence their rate of return. This is so because it has been found that TESCO
has overstated its profit by £263 million in year 2014 and this overstatement was later on revised
upward to £263 million which was the major difference. As a outcome of this scandal the share
price of Tesco also get reduced by 20% drop within its actual price. So, this in turn bring up a
negative impact over investors as they get cheated by the company which in turn lead them into
a huge loss. This is so because TESCO is alleged that it tried to artificially boost up the false
accounting which make up a fake representation that the company is doing well in the market
place (Habbash, 2017).
In order to cover up this losses the investors are trying to recoup this money with the help
of taking up legal actions. As a result of which the TESCO has been forced to pay off the
significant amount of money to investor who experience loss due to this scandal. With this the
profitability of company dropped down to a huge extend which affect the dividend of its other
shareholder as well as incentives of board of director which created more dissatisfaction among
them (Hassan and Chindamo, 2017).
On the other hand it can be said that the TESCO employees are highly affected by this
scandal, as due to this event the company is facing such a great loss which could potentially be
lay off and shutting down of stores top recover from the losses. This in turn may result into loss
of salary a well as job that in turn affect their personal life and living hood too.
Recommend the possible ways and strategy that lead improvement in corporate governance of
Tesco in order to perception of its investors and other stakeholders.
As per the view point of James. K., 2020, the corporate governance issues are required to
address on timely manner so that the operations can be executed in effective manner. The
following points are some recommendations that are usually opt by different organisation to deal
with the issues of financial and accounting standards and cane be consider by TESCO for future
actions. These are mentioned below:
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 In order to effectively set the internal control over the accounting function organisation
must put emphases toward segregating the duties. This in turn help in separating the
record keeping, review function as well as authorization within the accounting process.
Hence, by keeping strong internal control it become easier for the management to get a
ethical toward the actions to be performed which help in avoiding the accounting fraud
issues within organisation (Jacoby, 2018).
 For ensuring that the financial and accounting frauds can be avoided an organisation must
focuses toward establishing a strong control over environment. This means maintaining a
strong control by the top management which also involves enlisting of the management
to demonstrate about the ethical behaviour. This ensures that the standards as well as
policies are strictly followed by the organisation while operating its functions which in
turn avoid the chance of mistaken. There must be an annual examination of the financial statement which is usually done
with the help of auditing process. As when such actions are taken on constant basis then
the management feel under pressure to meet up with the financial goals of the company.
This fear of getting disclosed of the fraud practices always keep the management alert
toward the actions that are to be conducted and hence help in avoiding any kind of fraud
practices (Johnson, 2016).
Agency theory and stewardship theory
It has been emphasised by agency theory that interest of shareholder require maximum
protection by separation of incumbency of relationship in duties of board of chair and the CEO
of the company through leading a more economical models that emphasis on balance between
principle and agents of the company. On the other side the Stewardship theory is associated with
maximization of shareholders interest through leading a shared incumbency of the roles of
boards and CEO thus, it is a human model that emphasis on relationship between steward and
principal. Thus, in current case of accounting scandal of Tesco the agency theory is violated as
its board of directors has not meet the accounting principles as they had shown its profit at a
higher rate to attract and cater larger number of investors. Thus, efforts should be made by board
of directors to keep a balance and proper implication of Agency theory and stewardship theory to
fulfil all principles and interest of stakeholders in order to build higher level of trust and loyalty
among them.
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Chapter 3: Discussion about primary and secondary research undertaken
To ensure proper discussion about the method used for primary and secondary research
for current investigation implication of Research Onion is made a description and justification of
which is provided below:
Research philosophies- This is the outermost layer of a research onion that is mainly
divided into four main categories which are Positivism, Interprevitism, Realism and Pragmatism.
A suitable research philosophy is adopted for an investigation by the researcher on the basis of
its nature, source and type of knowledge need for conducting a study. With respect to the nature
of current investigation, Positivism philosophy is being adopted by the investigator as it is the
one that ensures better testing of set objectives and also ensures effective support and assists
quantitative form of data (Lutsenko, 2018).
Research approaches – It is the second layer of research onion that is mainly bifurcated
into two broad categorises that are named as deductive and inductive out of which one is selected
by the investigator for accomplish a study. With respect to current investigation on Tesco use of
deductive approach has been made as it the one that support research work with pre existing facts
and figure and also ensures support to quantitative facts to address the specific set of area
associated with the selected topic (Fearn-Banks, 2016).
Research strategy- This section of research methodology basically provides information
about the ways researcher intended to carry out a work and bifurcated into many type like action
research, experimental research, interviews, surveys, case studies, etc. In context of current
investigation, implication of survey strategy is made which is linked with the deductive approach
and considered as most finest and economical strategy for leading out a research work. The
strategy for current investigation includes use of a electronic questionnaire that is mailed to
selected participants from the employees of Tesco to collect required information for current
investigation (Mkandawire, 2019).
Choices of method- This layer of research onion is mainly bifurcated or divided into
three main parts that consists of quantitative method, mixed method and qualitative method of
research. Out of theses three types of research method, implication of Quantitative method of
research has been made for current investigation on Tesco that consists of collection of data in
numeric terms and also ensures its proper presentation and evaluation through use of various
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statistical tools which consists use of pie charts, frequency table, bar graphs, etc (Naciti, 2019).
Thus, use of quantitative research method is suitable and justifiable for current investigation as it
the one that lead a more measurable conclusion and effective way to achieve set objectives in
minimum time span.
Time Horizons – There are basically two main forms of types of time Horizon that
consist of Cross- sectional and longitudinal forms of time Horizons. Out of theses the former one
i.e. Cross sectional horizons are mainly associated with presenting all activates and tasks at
single point of time where as longitudinal are associated with presenting and evaluating activities
and particular variable over several years and different time span (Dieleman, 2017).
Data Collection and analysis
It is the most vital and crucial aspect of a research work that yield information regarding
the sources of data and its evaluation. Both the main sources of data i.e. primary and secondary
are being used for current investigation a description of which is lead out at below:
Primary source- The main reason behind making use of primary set of data is that it lead
to gathering of first hand and most authentic form of data directly from the participants that
consist of employees of Tesco. Thus, ensures reliability and authenticity of collected data. Use of
questionnaire is made to collect data from primary sources to ensures cost and time effective
gathering of relevant information (Chilisa, 2017).
Secondary sources- It consists of already recoded facts and articles that are mainly
present in form of past literature and records. The main implication and reason behind making
use of secondary sources of data is that it ensures a guidance and effective support for the key
findings of primary research through their evaluation and analysis on the basis of past facts and
records.
Sampling method- It is mainly associated and related with the selection of pre-
determined number of observation and respondents from a vast and larger number of population
to ensures more time and cost efficiency while conducting a research work (Canedo, 2016). With
respect to current investigation on Tesco, use of random form of sampling is made in order to
select a sample size of 30 responders from the employees of Tesco Plc in order to collect viable
and sufficient amount of information on the topic corporate Governance.
Research Instrument- The data collection tool used for current investigation is
questionnaire that is provided below to ensures gathering of ample and significant amount of
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data from selected 30 respondents from employees of Tesco. The questionnaire used for the
purpose of collection of data for current investigation is provided below:
Questionnaire
Q1) Do you having any idea or perception about the vital concept of Corporate
Governance within an organisation?
a) Yes
b) No
c) Neutral
Q2) What are the main factors and reason that lead to enhanced importance and need of
corporate governance with a company?
a) Check on Combating Corruption
b) Enhanced trust of Stakeholders
c) Improve corporate performance
Q3) As per you perception, what could be the main reason behind implication and
adoption of corporate governance by the Tesco Plc organisation?
a) To reduce risk of Corporate Crisis and Scandals
b) Enhance accountability
c) Better enterprise Valuation
Q4) What could be the main factors and reasons that could bring failure and issues in
Corporate governance of an organisation?
a) Lack of Transparency
b) Inefficient Board of directors
c) Excessive complexities
Q5) Are you agreed with the fact that the accounting Scandal at Tesco related with its
aggressive accounting policy is basically a failure of its Corporate governance strategies?
a) Agreed
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b) Disagreed
c) Neural
Q6) What are the main reasons and factors that lade to Accounting scandal at Tesco and
causes failure of its Corporate Governance?
a) Violation of accounting principles
b) Ethical challenges in auditing
c) Inefficiency of directors
Q7) What overall impact is lead out by this Accounting Scandal at Tesco in the trust and
commitment level of its investors and other Stakeholders?
a) Positive
b) Negative
c) Neutral
Q8) Is adoption of participative leadership and management style is an effective way for
Tesco to bring more transparency in its corporate governance structure?
a) Yes
b) No
Q9) What are the effective ways and strategies that could be adopted by Tesco Plc to build
better corporate governance structure and trust in its investors and other stakeholders?
a) Leading a Competent Board
b) Bringing transparency and accountability
c) Form an independent audit committee
Q10) Any Further recommendation and suggestion for Tesco plc to bring transparency in
its corporate governance stricture?
Ethical consideration- Many ethical issues and kinds of conflicts are faced by an
investigator during course of a research project thus, implication and adoption of ethical
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consideration in research work ensures and lead to more effective way to overcome those errors
and issues. Proper care is taken by researcher to maintain the safety and privacy of personal data
collected for current investigation along with leading and taking a prior consent and approval
from all the associated participants and individuals to meet the all set research ethics and
principles. Further, implication and fulfilment of set provision of data protection act is also made
to ensure protection and safety of all collected data in a right and law full manner.
The use of current research methodology that consist of quantitative method and survey
strategy went well and lead to easy and significant amount of data collection with the help of
Questionnaire. The only issues of drawback faced is associated with lack of collection of
theoretical and in-detailed information from respondents. Thus, overall selection of current
research method went well and support timely accomplishment and meeting of desired objectives
through leading efficient and viable collection of required data and information from both
primary and secondary sources.
Chapter 4: Critical review of results of research
This section provides a critical review and analysis of primary and secondary data
collected for this investigation on the accounting scandal of Tesco:
4.1) Analysis and interpretation of Primary findings
Theme 1: Vital concept of Corporate Governance
Q1) Do you having any idea or perception about the vital concept
of Corporate Governance within an organisation?
Frequency
a) Yes 26
b) No 1
c) Neutral 3
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Interpretation
With respect to current investigation it can be reviewed that out of a total 30 respondents,
26 were having idea or perception about the vital concept of Corporate Governance within an
organisation where as 1 was not aware with this vital concept along with 3 other individuals who
were having a neutral view point on concept of Corporate-governance.
Theme 2: Factors and reason that lead to enhanced importance and need of corporate
governance with a company
Q2) What are the main factors and reason that lead to enhanced
importance and need of corporate governance with a company?
Frequency
a) Check on Combating Corruption 10
b) Enhanced trust of Stakeholders 9
c) Improve corporate performance 11
13
26
13
a) Yes
b) No
c) Neutral

Interpretation
the main factors that has lead to enhanced importance and need of Corporate-governance
consists of check on Combating Corruption as supported by 10 participants where as 9 were
seemed in favour of Enhanced trust of Stakeholders. Apart from this, it has been also evaluated
that 11 believed that Improve corporate performance is the main reason behind need and
importance of corporate-governance in a company.
Theme 3: Main reason behind implication and adoption of corporate governance by the
Tesco Plc organisation
Q3) As per you perception, what could be the main reason
behind implication and adoption of corporate governance by the
Tesco Plc organisation?
Frequency
a) To reduce risk of Corporate Crisis and Scandals 11
b) Enhance accountability 10
c) Better enterprise Valuation 9
14
10
9
11
a) Check on Combating
Corruption
b) Enhanced trust of
Stakeholders
c) Improve corporate
performance

Interpretation
It has been observed through current study that 11 respondents believed that the main
reason behind implication and adoption of corporate governance by the Tesco Plc organisation is
to reduce risk of Corporate Crisis and Scandal where as 10 individuals had favoured enhance
accountability along with 9 more respondents who supported better enterprise valuation is the
main reason behind adoption of corporate-governance.
Theme 4: Factors and reasons that could bring failure and issues in Corporate governance
of an organisation
Q4) What could be the main factors and reasons that could bring
failure and issues in Corporate governance of an organisation?
Frequency
a) Lack of Transparency 8
b) Inefficient Board of directors 12
c) Excessive complexities 10
15
11
10
9
a) To reduce risk of Corporate
Crisis and Scandals
b) Enhance accountability
c) Better enterprise Valuation

Interpretation
There are various factors and reasons that could lead to failure of corporate-governance
which consists of lack of transparency as supported by 8 participants where as 12 other had
favoured inefficient board of directors along with 10 more respondents who were seemed in
favour of excessive complexities as the main factor or reason behind failure of corporate-
governance of an organisation.
Theme 5: Accounting Scandal at Tesco related is basically a failure of its Corporate
governance strategies
Q5) Are you agreed with the fact that the accounting Scandal at
Tesco related with its aggressive accounting policy is basically a
failure of its Corporate governance strategies?
Frequency
a) Agreed 22
b) Disagreed 2
c) Neutral 6
16
8
12
10
a) Lack of Transparency
b) Inefficient Board of directors
c) Excessive complexities

Interpretation
During the course of current investigation it has been evaluated that 22 participants out of
a total of 30 were seemed agreed with the fact that the accounting Scandal at Tesco related with
its aggressive accounting policy is basically a failure of its Corporate governance strategies
where as only 2 were disagreed along with 6 left out responders who were having a neutral view
point regarding above stated fact.
Theme 6: Main reasons and factors that lade to Accounting scandal at Tesco
Q6) What are the main reasons and factors that lead to
Accounting scandal at Tesco and causes failure of its Corporate
Governance?
Frequency
a) Violation of accounting principles 11
b) Ethical challenges in auditing 10
c) Inefficiency of directors 9
17
22
2
6
a) Agreed
b) Disagreed
c) Neutral

Interpretation
It has been analysed from current study that the main reason behind the accounting
scandal at Tesco consists of violation of accounting principles as favoured by 11 participants
where as 10 had supported ethical challenges in auditing. Further, 9 participants were also there
who believed that inefficiency of directors of Tesco is the main reason and factor behind the
accounting scandal and failure of its corporate-governance. e
Theme 7: Impact lead out by this Accounting Scandal on trust and commitment level of
investors and other Stakeholders
Q7) What overall impact is lead out by this Accounting Scandal
at Tesco in the trust and commitment level of its investors and
other Stakeholders?
Frequency
a) Positive 5
b) Negative 21
c) Neutral 4
18
11
10
9
a) Violation of accounting
principles
b) Ethical challenges in
auditing
c) Inefficiency of directors

Interpretation
It has been interpreted with respect to above pie chart that only 5 responders believed that
positive impact is lead out by Accounting Scandal at Tesco in the trust and commitment level of
its investors and other Stakeholders where as 21 participants were in favour of its negative
impacts on mindset and commitment of investors along with 4 other responders who were in
favour of its neutral impact.
Theme 8: Participative leadership and management style bring more transparency in
corporate governance structure
Q8) Is adoption of participative leadership and management
style is an effective way for Tesco to bring more transparency in
its corporate governance structure?
Frequency
a) Yes 28
b) No 2
19
5
21
4
a) Positive
b) Negative
c) Neutral

Interpretation
With respect to current investigation it has been find out that adoption of participative
leadership and management style is an effective way for Tesco to bring more transparency in its
corporate governance structure as it was favoured by 28 participators out of a total of 30 where
as only 2 participants where disagreed with this above stated statement.
Theme 9: Effective ways and strategies to build better corporate governance structure
Q9) What are the effective ways and strategies that could be
adopted by Tesco Plc to build better corporate governance
structure and trust in its investors and other stakeholders?
Frequency
a) Leading a Competent Board 10
b) Bringing transparency and accountability 8
c) Form an independent audit committee 12
20
28
2
a) Yes
b) No

Interpretation
It has been review with current primary instigation that leading a competent board is an
effective way that could be adopted by Tesco Plc to build better corporate governance structure
and trust in its investors and other stakeholders as supported by 10 respondents where as 8
favoured bringing transparency and accountability. Besides this, 12 other individuals also
supported formation of an independent audit committee to lead better corporate governance
structure and trust in its investors and other stakeholders.
4.2) Evaluation and discussion of secondary data
On the basis of secondary data gathered for current investigation it could be review that
corporate-governance is a vital concept that is associated with the set of principles and systems
according to which the business strategy and other operation of an organisation are governed. It
can be discussed that corporate-governance is vital and important for an organisation as it lade to
better transparency in business operations along with lading better check and control on financial
fraud and scams thus, lead to high valuation of an organisation and also tenures fulfilment of
viable needs of all stakeholders (Bain and Band, 2016). Beside this, it has been also observed
from the secondary sources that lack of board effectiveness, Poor leadership on ethos and culture
along with Boards' risk blindness and defective communication are some common factors that
lade to failure of corporate-governance.
Further, it has been seen that a negative impact is lead out by the accounting scandal of
Tesco on its investors and other stakeholders as it result of misrepresentation of financial
statement that hamper and sake the trust and commitment level of all investors and other
21
10
8
12
a) Leading a Competent Board
b) Bringing transparency and
accountability
c) Form an independent audit
committee

stakeholders as it miss-led them and resulted in huge losses (Boddy, 2016). Apart from this, it
has been also observed dividing the duties of board and leading a strong control environment and
implementing a strong auditing process are effective ways to lead improvement in corporate
governance of Tesco in order to have better perception of its investors and other stakeholders.
Chapter 5: Recommendation and action plan
On the basis of above investigation it has been find out that many challenges associated
with transparency in corporate governance structure along with Ethical challenges in auditing,
violation of accounting principle and inefficiency of directors are faced by Tesco that is leading
difficulty in accomplishment of its objectives. The main objectives of Tesco consists of leading
enhance creativity and innovation along with bringing clarity and transparency in its corporate
governance structure to have better loyalty and enhanced commitment level in its stakeholders to
accomplish its targets of better profits and higher investment. Thus, Following recommendation
cloud be made for Tesco Plc to minimize the chances of failure in its corporate-governance along
with leading better loyalty and commitment level in its stakeholders:
 Formation of an independent audit committee is highly recommanded for Tesco as it lead
to an effective way to keep check and control over its financial aspects that lead to
reduction in chances of accounting frauds and Scam. Further, an independent audit
committee keeps a control and motoring on performance and activities of directors and
other employees of Tesco that ensures reduction in frauds and corruption thus, lead to
enhanced loyalty and commitment level of investors to meet the objectives of attracting
larger number of investors.
 Leading effective communication among directors and other stakeholders is also
recommanded for Tesco as it ensures better interaction to build effective trust and
bonding with investors and other stakeholders that is vital to meet the objectives of
leading transparency and clarity in corporate structure. Further, effective communication
also ensures better bifurcation and distribution of role of responsibilities among directors
and employees that ensures more clarity and transparency in work to reduce the chances
of failure of corporate-governance structure of Tesco. At last, implication of Participative leadership style is also recommanded for Tesco as it
is an effective way to lead transparency in operation and corporate system through
leading and ensuring participation of all directors and stakeholders in decision making
22

process to lade a better strategic decision and planning to accomplish set objectives and
desires of Tesco in an effective way. Beside this, adoption of participative leadership
style also lead better guidance and support in decision making and strategy formulation
along with ensuring effective training and building confidence in employees to enhance
their creativity and innovation level to accomplish the objective of Tesco of enhancing its
creativity and innovation level to attract larger number of customer to enhance its
productivity and profits. Further, implication of participative leadership and management
by Tesco also lead a positive impact on mind set of other stakeholders that consists of its
investors to ensures proper and enhanced investment level to accomplish set desires and
objectives.
Action Plan
Below stated Action Plan is made by Tesco to reduce the chances of failure in its
corporate governance structure along with meeting and accomplishing desired objectives on
Time.
Objectives Tasks Success criteria Time Frame Resources
To enhance
creativity and
innovation
level of
employees and
corporate
governance to
ensure higher
productivity
To meet this
objective proper
training could be
provided by
Tesco to its
employees and
directors in order
to sharpen their
creativity and
innovation level
in specified times
period. Leading
proper analysis
of creative
environment and
facilitating
The success
criteria for this
objective would
be measured by
the increase in
the amount of
productivity and
overall sales
level of Tesco
through leading
better quality and
more creative
products to
satisfy its
customers.
The expected
time frame and
duration for
leading success
and
accomplishing
this objective is 6
months.
The resources
required for
accomplishmen
t of this
objectives
consists of
better and more
effective tools
of training and
ways to conduct
analysis of
creative
environment in
order to
accomplish the
prevailing level
23

brainstorming
strategy are also
effective task and
activities to
improve the
creativity and
innovation level
of employees and
corporate
governance at
Tesco.
of creativity so
that efforts
could be made
to improve
innovation and
efficiency level
of its
employees.
To bring
transparency in
corporate
governance
structure to
lead enhanced
loyalty and
commitment in
its
shareholders to
lead increase
in profits
For brining
transparency in
Corporate
structure of
Tesco the best
possible task and
way is to
implement and
adopt
participative
management and
leadership style
as it tenures
better
involvement and
interaction of all
employees and
stakeholders.
Further, leading
effective
The success
criteria of this
objective is
measured
through the level
of loyalty and
commitment
seen in the
stakeholder of
Tesco which
could be
reflected through
the increase in
the amount of its
profits.
The expected
time duration
required for
leading this
objectives is 4
months.
The strategy or
resources
required fr this
objective
consists of
measures to
lead effective
communication
which includes
use of online
and digital
modes of
communication
such as social
media.
24

communication
is also a viable
way and task to
improve clarity
and transparency
level in its
corporate
governance
structure as it
lead to proper
bifurcation and
division of role
and duties among
board of
directors and
other
stakeholders
thus, bring much
more clarity in
operations.
To lead better
training
programmes
for its directors
to enhance
there
efficiency and
performance
level to build
trust in
investors
For
accomplishment
of this objective,
implication of
better training
programmes and
use of online
modes and
digital software
to lade better
learning and
The success level
for this
objectives is
evaluated with
the increase in
the level of
investment for
Tesco plc.
The expected
time duration for
accomplishment
of this objective
is 5 month.
The resources
for this
objectives
consists of
larding a
committee to
evaluate the
performance
and efficiency
level of
directors along
25

education in
directors in order
to built trust and
confidence in
investors and
other
stakeholder.
with recruiting
and appointing
more competent
and skilled
directors to
build trust in
investors.
Gantt chart
For current investigation implication of Cross sectional horizons and time set are made
where all activities are lead out at specific point of time the presentation of which is provided
below with the help of Gantt chart. Implication of Gantt chart ensures more clarity and
transparency in research work through leading a systematic presentation of all associated task
and activities.
26

Conclusion
On the basis of current investigation it has been concluded that corporate governance is a
vital concept that brings clarity and transparency in the business strategy and performance of a
organisation through leading set of rules and principles that govern an organisation. Further, it
has been evaluated that there are many reasons that lead to failure in corporate-governance which
consist of inefficiency of directors or lack of transparency and accountable. At last, it could be
summarised that formation of an independent audit committee along with leading effective
communication are suitable way to bring clarity and transparency in corporate-governance
structure also also reduce chances of frauds and scandals within a business organisation.
27

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