Corporate Governance: Tesco Plc's Board Structure and Performance

This dissertation proposal investigates the effectiveness of corporate governance and its board structure on the organizational performance of UK-listed firms, with a specific focus on Tesco Plc. The study begins with an abstract that highlights the positive and negative impacts of corporate governance on organizational performance, emphasizing the importance of regulations and their enforcement. The introduction provides an overview of the research, background information, significance, aim, objectives, and research questions. The literature review explores the concept of corporate governance within Tesco Plc, the roles and responsibilities of corporate governance and board members, the influence of corporate governance on organizational performance, the effectiveness of board structure, and the implementation of corporate governance in organizations like Tesco Plc, Enron, and Pamalat. The methodology chapter details the research design, philosophy, type, approaches, data collection methods, sampling, and ethical considerations. The expected results section outlines the potential findings and recommendations. The study aims to analyze how corporate governance and board structure influence the development of organizational performance. The research utilizes both qualitative and quantitative methodologies to gather relevant data, providing a comprehensive analysis of the topic.

DISSERTATION
PROPOSAL
(Corporate Governance: Board
Structure and firm performance in
UK listed firms)

ABSTRACT
corporate governance is impacting positively as well as negatively on the performance of an
organisation. They impose some norms and rules on all firms that have to be followed by
company as well. By this way, it affects positively as they force them to be disciplined and
works legally. On the other hand, if they find organisation doing any illegal work, then they can
take strict action against them. Hence impacting negatively on it. different research
methodologies have been explained in this project that helps in collecting relevant data that are
related to the topic of study. Qualitative and quantitative methodologies are two methods that are
being described here for gathering appropriate information regarding to the theme of the
research.

Table of Contents
TITLE: ............................................................................................................................................1
CHAPTER 1: INTRODUCTION ...................................................................................................1
1.1 Over view of the Research ..............................................................................................1
1.2 Background of the Research.............................................................................................1
1.3 Significance of the Study..................................................................................................2
1.4 Research Aim ..................................................................................................................2
1.5 Research Objectives.........................................................................................................2
1.6 Research Question ...........................................................................................................3
1.7 Time Scale........................................................................................................................4
CHAPTER 2: LITERATURE REVIEW.........................................................................................5
2.1 The concept of corporate governance within Tesco Plc...................................................5
2.2 The major roles and responsibilities that are performed by Corporate governance and its
board members within an organisation ..................................................................................6
2.3 The influence of corporate governance on organisational performance. ........................6
2.4 The effectiveness of corporate governance and its board structure on enhancing
performance and productivity of Tesco Plc............................................................................7
2.5 The implementation of corporate governance within organisations such as Tesco Plc,
Enron and Pamalat..................................................................................................................8
CHAPTER 3: METHODOLOGY...................................................................................................9
+ 3.1 Introduction...................................................................................................................9
3.2 Research design................................................................................................................9
3.3 Research Philosophy........................................................................................................9
3.4 Research type..................................................................................................................10
3.5 Research approaches......................................................................................................10
3.6 Methods of data collection.............................................................................................11
3.7 Data sampling.................................................................................................................11
3.8 Ethical consideration......................................................................................................11
CHAPTER 4: EXPECTED RESULT ...........................................................................................12
Findings and Results.............................................................................................................12

Recommendation .................................................................................................................12
REFERENCES .............................................................................................................................13

TITLE:
To analyse the effectiveness of corporate governance or its board structure on developing
organisational performance. A Case study on Tesco Plc.
CHAPTER 1: INTRODUCTION
1.1 Over view of the Research
The basic purpose of each business organisation is to attaining high position at market
place as to offering variety of goods and services to their significant buyers. The needs and wants
of customers are the basic element for firm as to fulfil them in effective manner, so that
customers can sustain with firm for long run and also liable of organisational offered products
and services. Corporate governance can be consist as an effective element which plays an
essential role in developing organisational performance and productivity (Brenes, Madrigal and
Requena, 2011). Corporate governance refers as an appropriate system of controlling and
directing a business firm through various rules, regulations, operations and practices. This is a
systematic framework of rules and regulations in which all business and its activities are
implemented by the board of directors in efficient manner and ensure about accountability,
fairness and transparency in an organisations relationship with management, consumers,
financiers, organisational employees, government and its bodies. Tesco Plc is a most popular
British multinational retail organisation and operates their operations all over the world. Tesco
Plc has introduced itself as a high standards of corporate governance through using the principles
that are set out in the combined code of the Greenbury and Cadbury committees. Organisation
also implement various changes in their board structure as facilitates the long term development
of board practices. Board structure also plays an effective role in enhancement of organisational
performance and productivity at market place.
1.2 Background of the Research
The fundamental purpose of each business organisation is to attain high growth and
success through increasing performance and productivity of firm. Corporate governance can be
described as an essential element which is effective in controlling and assisting all organisational
activity in systematic manner. Boards structure and its members plays a vast role in development
and growth of firm or its activities (Erkens, Hung and Matos, 2012). Organisation and its higher
authority are concern on gaining attention of customers through serving variety of goods and
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services that are having significant value in satisfying the needs and wants of them. Tesco Plc is
the United Kingdom's biggest retail company and operates its business functions through
conveniences and gasoline retailing, hyper markets, small urban stores and financial services.
The basic purpose of firm is to explore their business activities at wide range as to enhancing
their performance at market place. High performance leads the firm towards high growth and
success and also helps in generating high competitive edge at market area.
1.3 Significance of the Study
The research into consideration is based on the effectiveness of corporate governance and
its impact on organisational performance and productivity. As a most popular and largest retail
company Tesco Plc has different sectors which are required to be controlled and assisted by firm
or its higher authority as to smooth and effective functioning of work. Corporate governance
consist as an important component which helps in providing a significant direction to the firm or
its activities through establishing appropriate control on them (Harford, Mansi and Maxwell,
2012). By conducting this investigation, learners would be able to find out the influence of board
members and governors on the functioning of venture like Tesco. They will be come to know
about how firms are being directed and operated by corporate governance. By this way, they can
enhance their knowledge and at the same time they can apply these learning in their profession
lives as well as in upcoming days.
1.4 Research Aim
This is considered as essential part of research as whole work of this project will be
carrying out on the basis of it. It gives guidelines to the investigator so that he can easily conduct
his work of investigation by following a correct path and can achieve success in finding out
relevant things in context to the topic of research. The aim of this project is To analyse the
effectiveness of corporate governance or its board structure on developing organisational
performance. A Case study on Tesco Plc.
1.5 Research Objectives
Research objectives are considered as essential and eminent aspects of study as it helps
investigator in giving recommendations or suggestions on the basis of information that has been
gathered from their research objectives (Hopt, 2011). It is to be noted that objectives are closely
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related with the aim of investigation. The main objectives of this project are mentioned as
below :
 To determine the concept of corporate governance within Tesco Plc.
 To ascertain different roles and responsibilities that are performed by corporate
governance and its board members.
 To evaluate the influence of corporate governance on organisational performance.
 To identify the effectiveness of corporate governance and its board structure on
enhancing performance and productivity of Tesco Plc.
 To compare the implementation of corporate governance within organisations such as
Tesco Plc, Enron and Pamalat.
1.6 Research Question
The present report is designed in order to explore the influence of corporate governance and its
board structure on developing performance of company (Jo, and Harjoto, 2011). Different
questions emerge in this context that are stated as below:
 What is the concept of corporate governance within Tesco Plc?
 What are the major roles and responsibilities that are performed by Corporate governance
and its board members within an organisation?
 How to evaluate the influence of corporate governance on organisational performance?
 What are the significance of corporate governance and its board structure on enhancing
productivity and performance of Tesco Plc?
 How to compare the implementation of corporate governance within organisations such
as Tesco Plc, Enron and Pamalat?
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1.7 Time Scale
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CHAPTER 2: LITERATURE REVIEW
Literature review simply refers to the process of accumulating data of various scholars
and authors that helps the researcher in carrying out in depth study about any topic on which the
whole research is based. This section of research helps in analysing the research through
theoretical frame work as it is effective in determining the view points of various authors and
writes who are having vast knowledge on some specific topic ( Jo, H. and Harjoto, M. A., 2012).
Here data is gathered by taking help of secondary sources such as books, journals, from different
webpages existed over internet, magazines, newspaper, research paper, etc. In this section of
research secondary source of data is appropriate as in this proper description about research issue
has to be given through the view points of various writers and authors.
2.1 The concept of corporate governance within Tesco Plc
Corporate-governance is a crucial system which is widely implemented by each small as
well as large business organisations as to explore their business and its activities at large scale
and attain high growth and profit at market place. As per the opinion of Kinderman, D., 2011,
corporate governance is defined as a system that formulates practices, norms and legislations for
the firms in order to direct and control all the ventures. The major purpose of corporate
governance is to alleviate efficient, prudent management and entrepreneurial which helps in
delivering long term success to the company. Corporate governance can be evaluated as an
appropriate system through which organisations are governed and controlled. In an organisation
higher authority and board of directors are responsible for governance of their firm or its various
activities. A good corporate-governance is crucial in helping the firm to build an effective and
successful business which is having the ability to sustained their business operations for longer
term (Coe and Lee, 2013). The board and higher authority of firm is committed to handling the
highest standards of corporate governance in its management of the administration of Tesco Plc
and its accountability to stakeholder and other shareholders. As a large business organisation
Tesco Plc and its higher authorities are widely concern on following rules and regulations that
are implemented by government or its roadies as to properly managing business or its activities
in well planned and systematic manner. In an organisation all decisions are made as per the
supervision of board of directors as they are the significant part of firm.
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2.2 The major roles and responsibilities that are performed by Corporate governance and its
board members within an organisation
In the present era the basic purpose of each business organisation is to attain high
position at market place as to fulfilling the basic desires of customers and buyers. As per the
view point of Michelon and Parbonetti, 2012, corporate governing body is playing a vital role in
Tesco Plc as they are having the responsibility of observing and controlling all the business
operations of this venture. Corporate governance and board plays vast role in managing all
business activities through implementing various rules, policies and procedures. In the corporate
governance framework of Tesco Plc various various elements such as board, chairman, chief
executive, non-executive directors, senior independent directors, company secretary and board
committees. There are various roles and responsibilities that are performed by corporate
governance and its board members, in which some are evaluated as under: Implementation of rules and regulation: The major purpose of corporate governance is
to implement various rules and legislations as to carry out all business and its operation in
well planned and systematic manner. The board is the custodian of an organisation's
values and its long term objectives. The board members are engaged in implementing all
rules and regulations that are effective in attaining high growth and success at market
place (Aebi, Sabato and Schmid, 2012). Managing and controlling: This is also an another essential role which is performed by
corporate-governance and its board members within an organisation. Effective
implementation of corporate governance is helps in controlling and managing all business
activities in systematic manner. For example: HR Manager of firm is focused on
implementing right people at right place and also provide a significant direction to the
each employees to moving forward towards right direction. Production manager is
focused on improving production of firm through implementing various new tools and
technologies at work place.
 Decision making: The board members include chief executive director, managers,
supervisors and higher authority and all are responsible for creating effective decision as
to developing organisational performance and productivity at market place. Organisations
are categorised among various departments in which people work as to attaining
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organisational desired goals and objectives. Each department is concern on performing
various activities that leads firm towards high growth and success.
2.3 The influence of corporate governance on organisational performance.
According to the view point of Grove, Patelli, Victoravich and Xu, 2011, Corporate
governance essentially means directions and controls of the company which are handled by
individuals at the top posts of the company. It is the framework which management uses for
protecting interest of various stakeholders of the company,these are shareholders, creditors,
management, employees, customers etc. Corporate Governance ensures that the organization is
heading towards the right direction and, aims and objectives for which the company was formed
are being fulfilled by it. There are various benefits that the organization receives by an efficient
corporate governance structure:-
 Increase in profitability and EPS – With effective corporate governance practices a
company can enhance and increase its productivity which results in higher profitability
and earnings per share (Walls, Berrone and Phan, 2012).
 Improved Reputation – The company with good corporate governance practices enjoys
good reputation in the market and also creates a brand image among customers. Good
corporate governance practices also enhances company's chances of receiving necessary
findings from various sources very easily.
 Less legal law suit – Corporate governance includes framing policies of the company in
accordance with rules and regulations prevailing in the local,state and federal. This
decreases company's chances of facing legal cases and lawsuits etc.
2.4 The effectiveness of corporate governance and companies board structure on enhancing
performance and productivity of Tesco Plc.
As per the opinion of Tanna, Pasiouras and Nnadi, 2011, The board is the guardian of
the Company's values and maintaining its long term goals. It provide strategic direction and also
controls the overall activities of firm. The decision making process taken by the Board members.
The board and members have their specific role are given as below:
Chairman: The chairman is the superior among all board members, it lead the board and taking
interest in discussion with various stake holders. They are mainly concern on providing accurate
information to the higher authority of firm. They can take part in annual evolution of the board
members and also evaluate the performance of the executive and non executive directors,
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chairman also provide induction of new directors. Chairman can be considered as an most
essential element of firm as they are having a huge control on each and every activity of firm.
Chief Executive: The important role of chief executive is to develop the strategies for the
company and manage all aspect of performances and also concern about management functions.
It helps in maintaining an effective corporate governance of the Tesco Plc. It ensures the
effective communication with the shareholders.
Non -executive directors : The non executive directors have the wide range of skills and
experience which enables them to provide constructive challenges in order to evaluate the
performance and productivity of firm.
Company secretory: The company secretory concern with development, implementing high
standards of corporate governance, it also supports the chairman and other board members as
they implement various business operations in well planned manner.
Above mentioned structure of board ensures the effectiveness of the Tesco Plc. It is
efficient in attaining the goals and objectives of the company. The board structure of firm
involved various components and member who all are plays a vast role in effectively managing
all organisational activities in well planned and systematic manner. The major duty of higher
authority is to design an frame work in which all activities are implemented in systematic
direction as to enhancing performance and productivity at market place.
2.5 The implementation of corporate governance within organisations such as Tesco Plc, Enron
and Pamalat.
As per the opinion of Bason and Anagnostopoulos, 2015, Tesco Plc is a multinational
corporation which have its operation all over the world therefore effective corporate governance
is needed for the management of the company. The board consist of five committees the job of
these committees is to consider in greater depth. Their job is to report the board of directors after
every meeting. The company follows stringent disclosure policies which gives it a competitive
edge in comparison to Enron and pamalat. Enron's corporate governance has always been
questioned by investors because of lack of transparency and irregularities found in their
workings. The company eventually leads to bankruptcy in 2001.
Parmalat is no exception if compared with the corporate governance of Tesco the company lacks
transparency and lack capabilities in delivering efficient corporate governance.
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