Explain the role and purpose of corporate governance for organisations in relation to financial obligations.

Financial Planning and Control - Accounting and finance

Understand corporate governance in relation to financial planning and control.

1.2 Explain the role and purpose of corporate governance for organisations in relation to financial obligations.

1.2 Assess the practical implications of compliance with the legal framework.

2.1 Understand the financial management environment.

2.2 Outline the economic environment for businesses. Explain the role of financial and money markets. Analyse the sources of business finance.

Assess the risk involved in a range of sources of finance.

3. Be able to assess potential investment decisions and global strategies.

3.1 Analyse the potential investment decisions and strategies available to a business organisation.

3.2 Assess how the global financial environment affects decisions and strategies for a business organisation.

Learning Outcome 1

Corporate governance: direction and control; increased accountability; appropriate governance structures; fiduciary duties of officers; bribery and fraud; independent audit; key governance regulations (e.g. UK Corporate Governance Code and company law); international governance.

Learning Outcome 2

Economic environment: economic policy; role of fiscal, monetary, interest and exchange rate policies; competition policy; government assistance; green policies; impact on business decisions.

Financial and money markets: role of national and international money markets; financial intermediaries; functions of stock market and corporate bond market; role of money markets (short term liquidity, short term trade finance, managing currency and interest rate risk); role of banks and financial institutions; principle instruments (interest-bearing, discount, derivatives).

Sources of finance: short-term finance (overdraft, loans, trade credit, lease finance); long- term finance (equity, debt, lease, venture capital); raising short and long-term finance; internal finance (retained earnings, working capital management, dividend policies); SME finance (business angels, government assistance, supply chain, crowdfunding); cost of finance; gearing ratios; interest coverage; lease/buy decisions; liquidity; capital structure theories (Miller and Modigliani, pecking order theory of finance selection).

Risks of finance: identifying risk (foreign currency, interest rate); causes of exchange rate fluctuations; purchasing power parity/ interest rate parity; causes of fluctuation in interest rates; hedging techniques to manage currency and interest risk.