Due Diligence Handbook: Corporate Governance, Risk Management and Business Planning

Due Diligence Handbook: Corporate Governance, Risk Management and Business Planning

Linda S. Spedding

Language: English

Pages: 752


Format: PDF / Kindle (mobi) / ePub

This book brings together practical information on legislation, primary sources, codes and best practice guidance in one volume. A practical handbook for business directors who wish to minimise financial, legal and reputational risks. It combines all matters concerning corporate governance with due diligence issues and in doing so provides you with the information and tools you need to help you protect your business when under taking due diligence, particularly when making international acquisitions.

The book provides clear guidance and case studies to help all involved understand the complexity of issues and to demonstrate the detailed work that is necessary both to ensure that the benefits of an acquisition can be realised and that there are no unexpected problems, for example through damage to corporate reputation that more that offsets the targeted benefits.

As high profile business failures tarnish the reputation of international business it is essential that business responds by having the policies and practices in place in day-to-day operations and in particular, as this book demonstrates, when a major business development such as an acquisition is being implemented.

Following the initial era of codes in the UK and regulation in the USA and major debates as regards the best approach to corporate governance in the common law countries, controversy has developed over which approach is really more appropriate for business planning purposes and risk management.

Given the trend for many UK companies listed on the US market to de-list in favour of the more British approach to corporate governance and in light of more European corporate scandals this book provides a comparative analysis of the European frameworks for governance. The EU approach and the individual jurisdictions of Germany, Italy, the Netherlands and France, in terms of their practical success or failure (with case studies)is covered. With the debate over an EU Constitution and the political stance of Germany (under the Merkel leadership) during its Presidency to revive the Constitution the book assesses the EU approach generally at a time when the competitiveness of companies and key business sectors must consider the thrusting economies of India and China in particular. The link with competitiveness is an increasingly crucial matter.

In connection with due diligence, the book provides an update of the business world in light of the world's economy and links corporate governance, risk management and business planning to reflect such business, political and regulatory trends and changes.

In recent years there has been much comment and feedback on the effectiveness of the Sarbanes-Oxley approach to corporate governance and many updates on business ethics and sustainability issues, which this book also covers in the context of due diligence. In addition, since there has been a major shift in business awareness to develop, or be seen to develop, a more enlightened approach to climate change coverage of this area is include in the book in the appropriate context of governance, risk management and business planning, as well as the trends in different parts of the world (USA (and some others v many others!). There are case studies within the book on how business is operating in order to respond to this issue with an international dimension and comparison. The whole debate over being carbon neutral has impacted on the airline industry in particular and has relevance to how industry sectors should balance the interests of the different stakeholders and cope with rather fast attitude changes of the media and public (and the regulators).

The importance of energy security has raised key competitiveness issues of major interest and commercial significance. Moreover the angle of fraud in this sector has become more evident. The area of energy security within this book is tied into ethical accounting, fraud, risk etc. and economic crime. These new areas can be set against the background issue of how much of this comes into play with due diligence. How far is this now part of risk management in todays business world.

New legislation is covered in terms of developments with the UK Companies Act and Directors? duties with an increasing need to understand reputational concerns and off balance sheet values since the withdrawal of OFR.

* The only book that looks at due diligence how it's used and how to get it right in the context of Corporate Governance, Reputational Risk Management and Business Planning
* A practical guide with case studies and checklists illustrating key business drivers which enable you to monitor risk management effectively
* Covers the latest regulatory UK and EU framework for due diligence, and doing business across international boundaries, India, China, USA etc.

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Planning in the post Sarbanes-Oxley world. These may involve increased risks for individuals who may be held accountable. Enterprise act/cartel offences, false accounting, corporate manslaughter, assumption of personal duty of care and wrongful trading are examples. The new UK Company Law 2006, has in it, aside from the duty to report on environmental and social matters, a specific duty for company directors to ‘have regard to’ their impacts on the environment, employees, suppliers and

economic trends 4.24 An overview of the structural nature of the economic environment from the University of Cambridge Programme for Industry Sustainable Economy Report (available at www.cpi.cam.ac.uk) provides a good overview of the trends of note in this section. The report’s main conclusions are: ● ● ● ● ● ● It is seen that economic systems and pressures are prejudiced towards the short term at the expense of more sustainable opportunities. There is a growing realism that this

is to invest in effective disaster recovery and business continuity plans. Early reports from the DTI’s Information Security Breaches Survey 2004 found that two-thirds of businesses surveyed had to restore significant data from backup due to a computer failure or theft. For small business too, it is wise to ensure that a robust backup procedure has been implemented and that data can be restored efficiently in a worstcase scenario. Finally, once the business has developed and implemented the risk

environmental and labour-related issues. The wide distribution of company proxy statements makes them a powerful foundation for a media campaign to direct attention at the activities of multinational corporations. If there is a serious prospect that 144 The Due Diligence Handbook: Corporate Governance, Risk Management and Business Planning a proposal could garner a majority vote, and hence represent, at least formally, the will of the shareholders, proponents of resolutions are often in a

Directive 2003: http://eurlex.europa. eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lgϭen&ty pe_docϭDirective&an_docϭ2003&nu_docϭ51 Eurosif – Reviews of Socially Responsible Investment (SRI) in Europe. A full report on Europe’s core and broad SRI funds: http://www. eurosif.org/publications/sri_studies International Finance Corporation (part of the World Bank Group) has documents relating to the emerging opportunities with regards to the trends we discuss in this chapter:

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