Corporate Governance Issue in Service Sector

Summative Assessment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LITERATURE REVIEW................................................................................................................4
Theme 1.Service provider industry life cycle and corporate strategy.........................................4
Theme 2 Effectiveness as well as structure of the board’s corporate governance comparison...5
Theme3. Corporate Governance issue in service sector..............................................................6
Theme.4 Actions for improving corporate governance in service industry................................7
RESEARCH METHODOLOGY....................................................................................................8
DATA ANALYSIS.......................................................................................................................11
FINDINGS AND REVIEW..........................................................................................................18
RECCOMENDATIONS AND ACTION PLAN..........................................................................20
REFERENCES..............................................................................................................................23
APPENDIX....................................................................................................................................25

INTRODUCTION
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TOPIC:
To evaluate the corporate governance issue of oversight and proposing actions to reduce its
impact: A study on Deloitte, UK.
INTRODUCTION
Background
Corporate Governance is basically a combination of the processes, rules or laws according
to which the businesses are operated, regulated or controlled. It considers both the internal as
well as external factors which affects the interests of the stakeholders of the company which
including the shareholders, suppliers, customers, government regulators and management. The
primary force which influences the corporate governance is the board of directors of the
company. This is the recent topic to be discussed about as most of the companies faces the issues
related to this. Mostly, the entrepreneurs and investors faced the challenges of the corporate
governance. This field also has gone through changes over many years. So, this can be defined as
the ethical process along with the structures that define the management and the direction of the
organisation (Abdurahman and Pahlevi, 2018). Deloitte is a British multinational professional
services network. It can be considered as one of the Big Four organisations and also the largest
professional services network in the world in terms of revenue along with the number of
professionals having headquarters in London, UK. The company provides services like Audit,
Tax, management consultancy, risk advisory services, legal etc. Many controversies surround the
company on the basis of the audit’s litigation, engaging the misleading reports, breaching the
confidentiality of the employees as well as the clients (Kostyuk, Mozghovyi and Govorun,
2018). Due to the corporate governance failure, the company also performed the actions as
internal auditor of Carillion for which it was highly criticised. The main issue which was
observed in Deloitte is the accountability and oversight issue. The research will be based on the
same issue in the company along with elaborating its impact on the company and also various
actions will be proposed through the action plan for reducing its impact (Lebedeva and et.al.,
2016). The main focus of the research will be on the corporate governance of the company and
the issues the company, its people and the customers are facing.
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Aim & Objectives
Aim: To evaluate the corporate governance issue of oversight in Deloitte UK, study its impact
and propose actions to reduce the impact.
Objectives:
 To determine the industry lifecycle of Deloitte UK and reflect on the existing corporate
strategy.
 To compare and contrast the effectiveness and structure of the board’s corporate
governance.
 To critically analyse the corporate governance oversight issue in Deloitte.
 To propose a board crisis action plan for reducing the impact of corporate governance
failure in Deloitte.
Research Questions
 What is the industry lifecycle of Deloitte which is in UK and also what is the existing
corporate strategy?
 How can the effectiveness and the structure of the board’s corporate governance can be
compared and contrasted?
 How can be the corporate governance oversight issue can be critically analysed in
Deloitte?
 How can be the board crisis action be proposed in order to reduce the impact of corporate
governance failure in Deloitte?
Rationale
The main reason behind the topic of the research i.e., the corporate governance issue of
Oversight in Deloitte, UK is the changing economics, business, increasing competition and the
regulatory landscapes which is responsible for ensuring that this work will evolve continually so
that they can stay abreast or ahead in terms of developments. This will also help the companies
to compete the responsibilities (Bhandari, 2018). It is also the need for the board for directing
their risk oversight efforts towards the most productive areas and also assist the management in
such ways which can help in benefiting the shareholders and other stakeholders. Also, there was
a major issue of oversight in Deloitte which existed for a long time. This was mainly happened
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since the failure as the internal auditor of the construction company which was considered as
insolvent named as Carillion and the external auditor of Autonomy. The criticism was made by
various committees and which was over pocketing millions of pounds for conducting audit work
which was lucrative (Kostyuk and Barros, 2018). This also leads to the failure to warn about the
corporate disasters which also made it considered it as the parasitical relationship. The company
realizes the need to use the appropriate oversight of the procedures and policies of the company
and especially for making the executive staff and the board aware about the regular operations of
the company. If it fails in any case can lead to the accountability problems and the other ethical
issues. It is very important to address this issue because without the oversight there can be
violation of federal laws by the corporate staff and the companies can face fines from the
agencies and the government along with damaging the reputation (Rehman and Hashim, 2020.).
Also, there is a need of a robust action plan so that the Deloitte can counter the weak strategies
which is much needed for the accounting firm. Therefore, the main reason behind the research is
the meeting of all the issues of corporate governance of Deloitte especially the oversight.
Significance
This research is going to help the board and executive members of Deloitte who really
wish to deal effectively with the issues of their corporate governance. It will also help the other
companies who wish to do the same. The research will have great significance on the
stakeholders and shareholders by creating trust in such companies and make greater investments
so that they can have a rapid growth (Odoemelam and Okafor, 2018).
Structure of the research
This gives an outline of the overall research about the various sections of the research. This
will clearly demonstrate the various parts which helps in gaining significant conclusions about
the research.
Introduction: This consists of various parts such as background which describes the most
important studies which are conducted in the chronological order. This also help in doing the
brief discussion regarding the topic of the research, the reason of doing this, its importance to the
people and the companies which will help the researcher to get deeper insights about the study.
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