Corporate Governance Report: Tesco's Minimum Wage Scandal & Impact

This report examines the impact of the national minimum wage scandal on Tesco plc's reputation and performance, focusing on corporate governance aspects. It explores the concept of national minimum wages in the UK, analyzes Tesco's wage policies, and evaluates the scandal's repercussions. The research incorporates a literature review discussing national minimum wage standards and Tesco's compliance, referencing the National Minimum Wage Act, 1998. The methodology employs both qualitative and quantitative research methods, including data collection and sampling techniques. The report concludes that adherence to corporate governance principles, particularly ensuring fair minimum wages, is crucial for a business organization's smooth functioning and positive outcomes. It highlights the potential legal and reputational risks associated with non-compliance and the importance of regulatory compliance for maintaining business functions and customer trust.

Corporate Governance
(The impact of the national minimum wage scandal on
the reputation and performance of Tesco plc)

Table of Contents
Title: National minimum wages.......................................................................................................3
Background of the study.........................................................................................................3
Significance of the Research..................................................................................................3
Research questions.................................................................................................................3
Research aims and objectives.................................................................................................3
Literature Review...................................................................................................................4
Methodology...........................................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERNCES:..................................................................................................................................8
Books and Journals:................................................................................................................8

Title: National minimum wages
Background of the study
Corporate governance can be understood as a system through which organisations are
oriented, regulated and controlled. It includes a set of rules, laws and procedures. This term
covers both internal and external factors that influence the interests of an organisation's
stakeholders, encompassing, customers, shareholders, suppliers, management and government
regulators (Solomon, 2020). The organisation which is considered to prepare this report is Tesco
Company. It is one of the largest supermarket chain in UK. It has headquarters in Hackney,
London, England. The report considers an issue in corporate governance. The value of that
problem is outlined in this report. The methodology used to research is also discussed in the
following report.
Significance of the Research
Minimum wages is a significant aspect in a business entity. It is an essential part of the
corporate governance of an organisation and if employees, labours or workers are not indulged
with minimum pays and wages then it raise the issue within the business (Murphy and
Smolarski, 2020). Also, it affects the brand's goodwill and reputation in negative terms.
Research questions
 What is the concept of national minimum wages in UK's organisation?
 What are the policies of worker's pays and salaries by Tesco?
 What is the problem faced by organisation in context of national minimum wages
scandal?
Research aims and objectives
Aim: The aim of this study is to assess the national minimum wage scandal on the reputation and
performance of Tesco
Objectives:
 To explore the concept of national minimum wages in company.
 To analyse the national minimum wage policy followed by Tesco Company.
 To evaluate the national minimum wages scandal on the reputation and performance of
Tesco plc.

Literature Review
According to the viewpoint of Leigh, Leigh and Du (2019), the national minimum wage
for people who cross the age of 23 and over has been increased to Euro 9.50 in the budget. The
minimum wage rises are established to come into an effect from 1st April, 2022.
 National living wage for over 23s: from Euro 8.91 to Euro 9.50 per hour.
 National minimum wage for those people aged 21-22: from Euro 8.36 to Euro 9.18.
 National minimum wage for 18-20 old people: from Euro 6.56 to Euro 6.83.
 National minimum wage for under 18 age: Euro 4.62 to Euro 4.81.
In case of Tesco Company, it is very important concern in corporate governance and it
should ensure that the company's policies related with wages and salaries should be fair enough
for their workers. As the employees are the asset of company, it becomes the duty of managers to
ensure that their employees would get minimum pays and wage rates (Mees and Smith, 2019).
Hence, the organisation must not breach the contract of minimum wages for living as it may
result serious issue for them and may reduce the brand goodwill in the market.
As per the viewpoint of Tejvan Pettinger (2020), Tesco Company follows the rules and
regulations introduced in the National Minimum Wage Act, 1998. The company guarantees that
all the stakeholders of the business should be given with their minimum wages. Also, the
business intents to give reasonable amount of pay as per the cost of living in UK. It is the utmost
concern for the company that all employees should be paid. It also affects the company's
productivity as employees are happy and satisfied with the wages and salaries. The organisation
also do regular checks and evaluation in the account books that all employees will be paid on
time. Managers and other employers discloses the amount of pay at the time of joining the
company by employee so that there will be no misunderstanding held between employee and
employer. Also, employees are get as per their working patterns, time spend in the company, on
the basis of qualification and experience.
According the viewpoint of Kamal (2021), National Minimum Wages must be kept at the
uttermost precedence by an organisation. In addition to Tesco, the company somehow fails to
fulfil the needs of corporate governance that is why they are facing issues in business. Some of
the employees raise the issue that the company is not paying minimum wages as per the cost of
living that is why employees' productivity also gets affected. The company may face the legal
circumstances if employees filed the case against them. Also, any scandal occurred by the retail

brand can cause negative impact on the brand image and goodwill. Hence, it is incumbent to
avoid such practices in the business.
Regulatory compliance is related with external legal mandates which can be affiliated by
state, federal or international government. For an organisation there are certain policies which
need accountability of the workplace. This is the responsibility for the organisation that to take
such measures which are helpful for them to comply with such legal aspects in order to maintain
business functions. Non-compliance of such legal aspects will lead into different negative
impacts on the organisation in terms of reputational risk and financial losses. On the other hand,
the organisation will have business disruption and erosion of customer’s trust which would have
to pay different penalties due to which profitability can be decreased.
Methodology
The following are the steps taken by the researcher with intent to carry out the research
activity:
Data collection: There are two methods used in this research that are primary and
secondary. Both methods are used to collect information about the concept.
Research Choice: Qualitative and quantitative research choices are available to prepare
this report. In quantitative method, the statistical and numerical information is used, while in
qualitative method, the secondary information is being assessed (Guo and Platikanov, 2019).
Both methods are used in the report.
Sampling: it denotes a process of choosing some contestants from the world to gather
data from them. Also, it is impossible to take feedback of entire population. Hence, the sample
will be chosen randomly. The size of sample will be fifty.
Gantt Chart:

CONCLUSION
It is concluded from the above report is that corporate governance must be followed by
the business organisation so that the business have smooth functioning. There is a requirement to
take care of the minimum wages of employees so that business can get effective results and
outcomes with the help of their labours and employees.

REFERNCES:
Books and Journals:
Guo, L. and Platikanov, S., 2019. Institutional ownership and corporate governance of public
companies in China. Pacific-Basin Finance Journal, 57, p.101180.
Kamal, Y., 2021. Stakeholders expectations for CSR-related corporate governance disclosure:
evidence from a developing country. Asian Review of Accounting.
Leigh, J.P., Leigh, W.A. and Du, J., 2019. Minimum wages and public health: a literature
review. Preventive medicine, 118, pp.122-134.
Mees, B. and Smith, S.A., 2019. Corporate governance reform in Australia: A new institutional
approach. British Journal of Management, 30(1), pp.75-89.
Murphy, M.J. and Smolarski, J.M., 2020. Religion and CSR: An Islamic “political” model of
corporate governance. Business & Society, 59(5), pp.823-854.
Solomon, J., 2020. Corporate governance and accountability. John Wiley & Sons.