Coca-Cola HBC: Governance Structure, Risk Strategy, and Performance

This report provides a comprehensive analysis of Coca-Cola HBC's governance structure, risk management strategies, and sustainability initiatives. It explores the company's board of directors, board committees, remuneration policies, and internal control mechanisms. The report also examines the influence of technological, social, and economic environments on Coca-Cola HBC's business model and its transformation towards sustainability. Furthermore, it discusses the role of the CFO and financial functions in value creation, along with the impact of COVID-19 on the organization's operations. Key performance indicators used by the company are also highlighted, providing a holistic view of Coca-Cola HBC's strategic approach to governance and sustainable business practices.

Cocacola HBC
Table of Contents
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INTODUCTION..............................................................................................................................3
MAINBODY...................................................................................................................................3
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTODUCTION
The business governance refers to effective distribution of rights along with
responsibilities among various parties within an organization which establishes the overall
decision-making rules and procedures. This governance is management by the board of directors
and take vital decisions on how the company will be developed for its future operations. For the
following report Coca-cola HBC has been taken into consideration which is the world's third
largest Coca-Cola anchor bottler in the terms of value with sales of more than 2 billion units
cases. The following report will highlight governance structure of the chosen organizational
along with board of leadership, board committees and remuneration along with risk management
strategy and internal control mechanisms , key performance indicators. In addition to this, it will
discuss the influence of technological, social as well as economical environment in order to
determine business model transformation towards sustainable business model. Moreover, the
report will discuss CFO and financial functions role within value creation along with how
COVID – 19 has impacted the overall operations of the organization.
MAINBODY
Governance refers to the overall system that consist of rules, practise along with process
within an organization that provide it the ability to direct and control operation. In addition to
this, governance helps the organization to develop balance relative to interests of business
stakeholders such as senior manager along with customs, suppliers, financiers and the
government along with community. Moreover, governance within an organization allows in the
establishment of framework that involves business objectives and comprises practical that shape
the overall functions of the management through action plans and internal control to measure
performance. In context to Coca-cola HBC, the organization has effective governance that is
established through a structure and systematic manner which help the business to operates in
various countries along with various economic and regulatory environments. The board of the
organization has recognized that in order to attain effective governance it is crucial to have
optimal leadership which will lead to the achievement of strategic goals (Husted and de Sousa-
Filho., 2019). The committee of the organization pays emphasis on implementing best practices
in governances as it pays a key role relative to risk management and identifying opportunities
that help them to maintain trust relative to their stakeholders. The board of the organization is
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able to recognize the value of effective governances and focuses on monitoring as well as
adopting best practices(Corporate goverance,2021).
The organization has an optimal board committee that is responsible for the long-term
success of the organization along with ensuing that it is able to provide high level of satisfaction
to its stakeholders value as well as contribution to the society. The board of the organization
focusing on establishing effective values along with polices that ensure alignment of culture and
developed workforce practices in order to achieve long-term sustainable vision (Li., 2018). The
organization is focused on keeping its board well-balanced and diverse through international
skills, experience along with background and independence. The structure of the organization
is flows from the board of directors to the board of committees which is well established and
functions efficiently through develop and enhanced communication channels (Corporate
governance in board members,2021).
One of the most crucial committee members is Remuneration Committee of the
organization which provide assistance to the business in developing remuneration strategy for
the group and helps in approving or making suitable recommendations to the board relative to
compensation packages for directors and senior management. The committee focuses on key
aspects such as rewards related to executives of the groups along with company-widen
remuneration and benefit plans and general polices governing the early termination of the
executives of the group. In addition to this, the organization is able to develop dynamic
management for risk and opportunity through effective business planning and value creation
process. The board has adopted a strategic enterprise-wide risk management approach in order to
integrates framework to manage risks and leverage crucial opportunities across the group. The
group pays emphasis of effective identification and assess its risks and opportunities through a
rigours cyclical process that helps in the evaluation of universal risks when operating (Singh and
Gaur., 2021). The group of the organization seeks minimal expose relative to unforeseen
scenario and identifies risks and develops stable environment for their strategic objectives. The
risk management of the group involves crucial roles such as formulation of risk management
polices, group statement on strategic direction, ethic and values along with clear business
objectives and business principles (Corporate governance in board committees,2021).
The group utilized various key performance indicators in order to effectively measure
their performance in an optimal manner. The organization KPIs such as Profitability, liquidity
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along with leverage KPIs in order to understand aspect related to debt equity , gross profit along
with optimal understanding of current ratio. It allow the group to evaluate how the organization
is performing relative to previous recorded results. It helps the business to develop suitable plans
and gain high level of productivity as well as performance (Risk management,2021).
There are various environmental factors that have a great influence on the operation of
an organization and impacts its business functions. The changes in these influential
environment force an organization to alter their business strategies in order to ensure all business
operations function at an optimal level. In context to Coca-Cola HBC, environment such as
technological, social and economic have great influence over its operations and the overall
aspect for attaining sustainability relative to business operations.
Technology plays a key role within the organization as it allows the business to have
effective as well as effective business process. It allows the management to utilize resource in an
optimal manner leading to cost effectiveness. In addition to this, it allows the business to ensure
all operations related to production are smooth relative to utilization of various resource in order
to ensure sustainability is attained (Bon-Gang., 2018). Moreover, the organization takes into
account social aspect as well in order to understand how it can enhance its products and services
to better cater the needs of their customers. The organization is focused on utilizing sustainable
resources to develop products that will ensure social obligations are met in an efficient manner.
Furthermore, social factors impact the overall functioning of the organization as the business has
to consider behaviour of their customers when developing sustainable products. This impacts
their overall brand image and influences their organizational operations as well (Sustainable
future,2021).
There are various economic factors as well that the organization has to take into
consideration within the organization in order to ensure its products and services are effective in
proving business high level of growth. It is crucial for the business to ensure aspects such as cost
of raw material as well as labour in order to orient their business functions to be sustainable. In
addition to this, the organization functions in various regions with different economic situations
which makes it vital for the management of the organization to develop suitable polices and
plans that will ensure establishing a standard procedure when developing sustainability within
the organization regardless of the location of the business (Mafimisebi and Thorne., 2018). The
evaluation to these environmental factors has allowed the organization to develop effective
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missions that will help the business achieve sustainable growth on the bases of their
stakeholders. The sustainable plans developed by the organization focus on key areas such as
reduction of emission, water utilization along with packaging in order to reduce waste,
sustainable sourcing of raw material along with establishing relations with people and
communities in order to enhance business operations. This will help the organization to develop
and enhance the overall operations of the business and promote sustainability within their
business operations in an effective manner. In addition to this, it will allow the organization to
develop a positive brand image along with awareness for their customers which will allow the
organization to gain higher level of market competitiveness. Furthermore, sustainability within
their procurement of raw material that will allow the business to ensure it is utilizing high quality
material within their products and deliver optimal levels of satisfaction relative to customers.
The organization is committed to establish a Net Zero by year 2040 which will reduce
the overall direct emissions to an absolute minimum. In addition to this the organization is
focused on working with their partnership and other suppliers in order to eliminate over 90% of
their carbon footprints. Although their primary objective is to establish and maintain a systematic
emission reduction through science based target and hopes to reduce value chain emissions by
25% in the year 2030. The organization through the evaluation of its terotechnological, social
and economical environment has develop effective plans that will help the organization to
increaser their investment relative to emission reductions along with reduction of emission from
agricultural ingredients (Song, Fisher and Kwoh., 2019). Moreover, the business is orientated
towards providing energy-efficient as well as eco-friendly cooler to their customers and develop
low carbon packaging approaches by increasing rPET use along with adoption of package-less
and refillable options and removing plastics in secondary packaging (NetZero,2021).
The organization of Coca-Cola HBC has effective financial fictions that help the
organization to establish optimal financial objective. The management of the business is able to
develop Long-term financial decision that include investment that are developed on the bases of
future aspects and market suture and focus on share capital along with debenture as well as
internal funds. In addition to this, the business financial functions also enable the management to
develop objectives related to medium and short term based that consist of advances from
customers and trade credit. Moreover, the financial function with the organization allows the
management to take crucial investment decision that provide essential support to the business in
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understanding the working capital required along with budgeting decision that pay emphasise on
how finances of the business will be utilized in aspects such as marking and development of
products and service. Moreover, the finical function of the business help in establishing
dividend decisions that focus on developing a balance between the profits retained along with the
amount to be paid out as dividends (Toan and Hung., 2020).
Liquidisation decisions are also involved in the financial function of the organization and
focus on evaluating the funds that are necessary to pay bills that are due along with developing
financial reserve relative to unforeseen situations. The financial function were crucial for the
organization in the situation of COVID – 19 pandemic as it allows the management to take
quick decision relative to the allocation of financial funds ion proving aid to their employees and
ensuring business operation maintain high level of productivity during the time of lock down.
These crucial financial decision are taken by the CFO of the organization in order to ensue that
the business operation function in the correct manner and provide optimal level of output in
order to satisfy various stakeholder of the organization. In addition to this, the CFO of the
organization focuses on the financial act ivies that include being responsible with the financial
of the business and performance of operations through financial strategies. The CFO of the
organization pays emphasis on meeting the revenue as well as earning goals along with
maintaining stability relative to cash flow. Moreover, the CFO of the business provide assistance
relative to both maximizing the revenues along with revenue generation capacity of the
business and controlling expenses without sacrificing customer of employee satisfaction along
with the reputation of the company (Julien. ed., 2018).
The CFO at Coca-Coal HBC is also responsible for forecasting financial situation in an
effective manner which provide high level of assistance during the situation of COVID- 19
pandemic. It allows the organization to allocate funds in a proper manner leading to
maintenance of business operation as well as both customer and employee satisfaction. In
addition to this, it is the role of CFO to report the evaluated information to the board members in
order to develop effective strategies along with police that will help in enhancing the operations
of the business and help in attaining growth during unforeseen situations.
The situation of COVID- 19 pandemic has massively impacted the business operation of
various organizations. It has influenced and disturbed the effectiveness of supply chain as well
as engagement with customers. In addition to this, the organisation shave suffered high level of
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financial losses due to increase in unemployment due to low generation of profitability.
Moreover, the source of raw material has also been impacted due to restriction established by
COVID – 19 pandemic. In context to Coca-Cola HBC, since the beginning of the pandemic the
organization has worked with its network of community along with partnership in order to
establish effective protocols to fight the pandemics (Limijaya, Hutagaol-Martowidjojo and
Hartanto., 2021). It is focused on keeping its employees safe and healthy in order to serve the
community in an optimal manners. In addition to this, in order to keep its social environment
effective relative to the COVID – 19 pandemic situation the organization is committed to work
with assistance organizations such as the Red Cross along with other organization in order to
fulfil its social ethical values. The business has made various donations to hospitals, food-banks
along with testing centrers which has allows the business to enhance its brand image in a positive
manners and ensure growth relative to the pandemic situation.
The situation of COVID-19 pandemic major impacts the overall customer service
operations of an organisation which has forced the management at Coca-Cola HBC to
continently serve every customers that is able to operates while maintaining effective
engagement with customers. The business has focused on increasing the overall frequency of
their customer engagement by providing optimal support in order to overcome challenges which
is caused by the huge shift in demand pattern. In addition to this, the organization as a means to
reduce pressure on supermarkets supply chain have arranged direct delivery to stores rather to
customers through central warehouses. Moreover, the organization has promoted its activities
related to e-commerce especially their ordering platform for their customers as well as partnering
with food delivery platforms in order to work with wholesale customers and develop a direct-to-
customers offering (Khan and Mauldin., 2021).
Through the COVID-19 pandemic the organization has focused on proving best service
to their customers in order to maintain high level of dependability. It has allows the business to
develop support as well as trust from their suppliers. In addition to this, the organization
focused on making various donations to the industry in order to initiate support for the long-term
recovery of bar. Restaurants along with hotels sectors in Austria. Moreover, the organization
organized a legal advisory webinar in the Czech Republic in order to provide support to their
partners and access recovery programs and funds. The business also established initiatives such
as “Raise the Bar” in Croatia that focused on proving free training to hospitality professions
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and utilize social media in order to promote home delivery platforms (Latest-Covid-19-
news,2021).
The organization is faced with economic concerns during the time of COVID – 19
pandemic and has to focuses on how raw material products will be attained in an effective
manner in order to ensure that the quality of products remain the same along with its price. This
is crucial in order to maintain loyal customer base. In addition to this, the organization has to
focus on aspects such as high rate of unemployable within a specify region of their business
operations as it is crucial to have a talented and skilled work force. This aspect is also combined
with the aspect of keeping employees safe in order to ensuring high level of performance as well
as productivity during the time of pandemic. Furthermore, the organization has effectively
fulfilled its social obligating within the markets through various aspects that has enabled the
business to maintain a positive brand image and attract customers to the products and services
offered by the organization. Moreover, this has allows the business to ensure it is able to gain
market competitiveness through enhance brand image and awareness relative to their
competitors in the market. The business has also utilized technological factors in order to
overcome challenges related to engagement with customers in an effective manners. The
business and its management has paid emphasis on utilizing social media platform in order to
reach its customer base in an optimal manner. In addition to this, the business is able to enhance
its operation by offering all its serves on the digital platform that make its efficient for both the
suppliers and their customers to purchase its products. It allows the business to ensure all their
employees are safe from the situation of COVID-19 pandemic and maintaining high level of
performance along with productivity wit its business functions. This allows the management to
overcome the challenges of stagnant business operation in an effective manner and ensure
maintenance of business growth as well.
CONCLUSION
From the above essay it has been concluded that, it is vital for an organization to evaluate
and develop effective governance within the business. In addition to this, it is crucial to have an
optimal board leadership that is able to maintain and enhance the development of business
operation through effective and suitable business decisions. Moreover, the essay also highlighted
the impact of remuneration committee along with how the board is able to develop risk
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management strategies in order to negate unforeseen risk such as COVID-19 pandemic.
Furthermore, the essay was able to effectively highlight how technology environment has a great
influence over the operations of the business along with the impact of both social and
economical environment as well, that are necessary to be evaluated in order to take importance
decisions related to business operations. The essay was also able to provide effective
understanding of the CFO along with the financial function and their role relative to value
creations. In addition to this, the essay outlined how the chosen organization asses the situation
of COVID- 19 pandemic through their effective strategies and how aspects such as technology,
social and economical elements interacted with the organization the the unforeseen situation of
pandemic.
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REFERENCES
Books & Journals:
Bon-Gang, H., 2018. Performance and Improvement of Green Construction Projects:
Management Strategies and Innovations. Butterworth-Heinemann.
Husted, B. W. and de Sousa-Filho, J. M., 2019. Board structure and environmental, social, and
governance disclosure in Latin America. Journal of Business Research, 102. pp.220-
227.
Julien, P. A. ed., 2018. The state of the art in small business and entrepreneurship. Routledge.
Khan, S. and Mauldin, E., 2021. Benefit or burden? A comparison of CFO and CEO outside
directorships. Journal of Business Finance & Accounting.
Li, Z. F., 2018. A survey of corporate social responsibility and corporate governance.
In Research Handbook of Finance and Sustainability. Edward Elgar Publishing.
Limijaya, A., Hutagaol-Martowidjojo, Y. and Hartanto, E., 2021. Intellectual capital and firm
performance in Indonesia: the moderating role of corporate governance. International
Journal of Managerial and Financial Accounting, 13(2). pp.159-182.
Mafimisebi, O. P. and Thorne, S., 2018. Strategies for disaster risk reduction and management:
are lessons from past disasters actionable?. In Handbook of disaster risk reduction &
management (pp. 843-866).
Singh, D. and Gaur, A. S., 2021. Risk mitigation strategies in international B2B relationships:
Role of institutions and governance. Journal of Business Research, 136. pp.1-9.
Song, M., Fisher, R. and Kwoh, Y., 2019. Technological challenges of green innovation and
sustainable resource management with large scale data. Technological Forecasting and
Social Change, 144. pp.361-368.
Toan, P. N. and Hung, N. X., 2020. Study the factors affecting the presentation and disclosure of
sustainable development information of Vietnamese enterprises. Academy of
Accounting and Financial Studies Journal, 24(1). pp.1-15.
Online:
Corporate governance in board committees,2021.[Online] Available through<https://www.coca-
colahellenic.com/en/about-us/corporate-governance/board-committees>
Corporate governance in board members,2021.[Online] Available through<https://www.coca-
colahellenic.com/en/about-us/corporate-governance/the-board>
Corporate governance,2021.[Online] Available
through<https://www.coca-colahellenic.com/en/about-us/corporate-governance>
Latest-Covid-19-news,2021.[Online] Available
through<https://www.coca-colahellenic.com/en/covid-19/latest-covid-19-news>
NetZero,2021.[Online] Available through<https://www.coca-colahellenic.com/en/a-more-
sustainable-future/netzeroby40>
Risk management,2021.[Online] Available
through<https://www.coca-colahellenic.com/en/about-us/corporate-governance/risk-
management>
Sustainable future,2021.[Online] Available through<https://www.coca-colahellenic.com/en/a-
more-sustainable-future>
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