Subject: STRATEGIC CASE STUDY

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SCS – Nov 2024 – L3 – Q5c – Board Independence and Accountability in Corporate Governance

Evaluation of how the governance structure at BOGML affects board independence and accountability.

Question

There are a number of concepts of good corporate governance that every entity, including BOGML, must strive to adhere to.

Required:
Provide an evaluation of how the existing corporate governance structure at BOGML may undermine or compromise the following key concepts of good corporate governance, with particular reference to the current composition and organisation of the board.

i) Independence
ii) Responsibility and accountability

Answer

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Tags: Accountability, Board Independence, Corporate Governance, Ethics, Governance Framework, Leadership, Responsibility
Level: Level 3

Topic: Corporate Governance
Series: Nov 2024

SCS – Nov 2024 – L3 – Q5b – Board Responsibilities in Corporate Governance

Evaluate the role of the board in corporate governance, focusing on responsibilities for strategy, oversight, and ethical leadership.

Question

The role of the board of directors is critical in corporate governance. The National Corporate Governance Code for Ghana (the National Code) issued in November 2022 outlines the board’s core responsibilities.

Required:

Advise the board of BOGML on the FIVE key responsibilities of the board of directors as outlined in the National Code.

Answer

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Tags: Board Responsibilities, Corporate Governance, Ethics, Internal Controls, Risk Management, Strategic leadership
Level: Level 3

Topic: Professional practice and codes of ethics
Series: Nov 2024

SCS – Nov 2024 – L3 – Q5b – Board Responsibilities in Corporate Governance

Identify and explain the five governance pillars in the National Corporate Governance Code for Ghana 2022.

Question

It is evident that all is not well with the current corporate governance at BOGML. However, for the company to achieve sustainable growth and remain competitive, it must adhere to sound corporate governance principles.

Required:

Using the FIVE governance pillars identified in the National Corporate Governance Code for Ghana 2022 (the National Code), issued in November 2022 by the Institute of Directors-Ghana, advise the company on how to improve upon its current governance structure.

Answer

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Tags: Corporate Governance, Ethics, Internal Controls, Leadership, Risk Management, Social responsibility, Stakeholders, Transparency
Level: Level 3

Topic: Ethics and social responsibility
Series: Nov 2024

SCS – Nov 2024 – L3 – Q4c – Forward Rate Agreement for Interest Rate Risk Management

Calculation of settlement amount for FRA under different Ghana Reference Rate (GRR) scenarios.

Question

The company has decided to use a Forward Rate Agreement (FRA) to manage its interest rate risk likely to arise from the short-term loan of GH¢15 million it intends to borrow in three months for a period of six months.

Required:

i) What is the purpose for a company to enter into an FRA arrangement? (2 marks)

ii) Calculate the amount of money that will be paid to settle the FRA at the beginning of the FRA period if, at the end of month 3, when the FRA becomes effective, the six-month Ghana Reference Rate (GRR) is as follows:

a) 37.50%
b) 28.50%

In each case, clearly state the party (i.e. FRA buyer or FRA seller) responsible for making the payment.

Answer

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Tags: Financial management, Forward Rate Agreement, Hedging, Interest Rate Risk, Risk Mitigation, Short-Term Borrowing
Level: Level 3

Topic: International financial management
Series: Nov 2024

SCS – Nov 2024 – L3 – Q4b – International Tax Considerations

Key tax issues for BOGML’s planned international expansion to minimize total group tax payable.

Question

The company is planning to expand its operations to Tanzania and South Africa in 2026. As a result, transactions between the head office in Ghana and the prospective foreign subsidiaries will likely take place, leading to potential international tax implications.

Required:

Briefly identify and explain TWO key issues to consider for the company to minimise total tax payable on the group profits.

Answer

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Tags: Foreign subsidiary, Global Expansion, International Taxation, Tax Planning, Tax Risk, Transfer Pricing
Level: Level 3

Topic: International financial management
Series: Nov 2024

SCS – Nov 2024 – L3 – Q4a – Capital Budgeting Framework

Explanation of the five key elements in the capital budgeting framework for investment appraisal.

Question

One of the Board members, Dr. Halimatu Sadia, has expressed concerns regarding Dr. Ayimadu Baffour’s consistent failure to conduct investment appraisals and capital budgeting when making long-term investment decisions.

Required:

Advise Dr. Ayimadu Baffour on the capital budgeting and strategic planning framework used for conducting investment appraisals by briefly outlining the FIVE key elements of the framework.

Answer

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Tags: Capital Budgeting, Decision Making, Financial management, Investment Appraisal, Strategic Planning
Level: Level 3

Topic: Investment Decisions
Series: Nov 2024

SCS – Nov 2024 – L3 – Q3a-b – SBUs and Growth Phases

Evaluate BOGML’s SBUs using Ashridge Matrix and analyse growth phases with Greiner’s Model.

Question

a) The company has presented information on the various products and services (i.e. the strategic business units (SBUs)) within the company’s portfolio.

Required:
Using Ashridge Portfolio Display Matrix and based on the performance of each SBU, clearly classify and explain the products and services under appropriate categories identified by the matrix. Support your answer with Ashridge Portfolio Display Matrix.

b) Since its inception, BOGML has grown organically and has gone through different stages of development in response to the challenges of growth and changes in both its internal and external environments. The company is currently under pressure to continue evolving.

Required:

i) Identify and describe the first two phases of growth applicable to BOGML based on Greiner’s Growth Model. In your explanation, include the type of crisis the company faced at each phase.

ii) The board has proposed appointing Regional Managers who will be responsible for the sales performance of the company’s filling and gas stations in their regions. If this proposal is implemented, it will move the company to the next phase in Greiner’s Growth Model. Identify and explain what this next phase is, and describe the potential crisis that may arise at this stage.

Answer

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Tags: Ashridge Portfolio, Business Portfolio, Delegation Phase, Greiner’s Growth Model, Growth Crisis, Leadership Crisis, Organizational Structure, Strategic Business Units
Level: Level 3

Topic: Methods of Development, Strategy implementation
Series: Nov 2024

SCS – Nov 2024 – L3 – Q2b – Integration/Responsiveness Matrix and Cost Reduction

Advising BOGML’s MD on the best international strategies under the IR Matrix to achieve cost reduction in expansion.

Question

The Board of BOGML has approved the Managing Director’s proposal to expand operations into Tanzania and South Africa by 2026. A key strategic focus of the company has been cost reduction, due to the narrow profit margins prevalent in the industry.

Required:
Using the Integration/Responsiveness (IR) Matrix, advise Dr. Ayimadu Baffour on the two most suitable international strategies/choices that have a low requirement for local responsiveness but can effectively support his cost reduction objectives. Clearly identify and explain the two strategies within the IR Matrix that prioritize cost reduction.

Answer

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Tags: Cost reduction, Global Strategy, Integration/Responsiveness Matrix, International Strategy, Multinational Strategy
Level: Level 3

Topic: International financial management, Strategy implementation
Series: Nov 2024

SCS – Nov 2024 – L3 – Q2a – Approaches to Risk Management

Discusses risk management approaches to address identified risks in BOGML.

Question

Approaches to risk management in BOGML – Advice to the board of directors

The following are the risk management approaches that the board of BOGML can adopt to manage the following risks identified in the company:

Risk A

Description: Low probability but high impact, e.g., pandemics, natural disasters.
Approach: Risk Transfer or Risk Sharing
Since this risk has a low likelihood of occurring but can result in severe financial losses, the company should consider transferring this risk or sharing risk. This can be done through the company taking full or partial (i.e. sharing of risk) insurance policies specifically designed for catastrophic events, such as business interruption insurance, pandemic insurance, or property insurance that covers natural disasters. Since the impact will be high when the risk occurs, the company can take insurance to pass on the high impact on the company to the insurance company which has to compensate BOGML in the event that the risk does occur.
The risk could also be shared through BOGML forming partnerships and collaborating with other OMCs to undertake investment in their oil stations.
The company should also develop a disaster recovery and business continuity plan to manage potential impacts effectively.

Risk B

Description: High likelihood but low financial impact, e.g., labor turnover and software downtime due to internet instability.

Answer

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Tags: Business Continuity, Business Planning, Disaster Recovery, Financial risk, Insurance, Risk Management, Strategic Risk
Level: Level 3

Topic: International financial management
Series: Nov 2024

SCS – Nov 2024 – L3 – Q1b – Digital Challenges in Accounting

Discuss the challenges of digital transformation in accounting, covering cybersecurity, compliance, and ethical concerns.

Question

In the contemporary business landscape, the integration of digital technologies presents multifaceted challenges for accounting professionals, particularly in the areas of digital transition, cybersecurity, regulatory compliance, and ethical decision-making. Explain each of these challenges.

Answer

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Tags: Cybersecurity, Digital Transition, Ethical Dilemmas, Financial Reporting, Regulatory Compliance
Level: Level 3

Topic: Cybersecurity, Ethics, Regulatory Compliance

SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

Question

The management of COM requires a detailed analysis of the two financing options (borrow to buy or lease) under consideration to determine the cheaper alternative to be used to acquire the 5G equipment. The CFO has been requested to do a presentation at the next Executive Committee (EXCO) meeting.

Required:
You are the CFO, and you are to prepare a presentation to advise EXCO of the cheaper financing option. Your presentation must include detailed computations supporting your advice.
Marks: 15 marks

Answer

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Tags: 5G Equipment, Borrow to Buy, Cost Analysis, Financing Options, Lease
Level: Level 3

Topic: Sources of Finance
Series: NOV 2021

SCS – Nov 2021 – L3 – Q6 – Identifying and Assessing Risk

Identify and assess four key business risks that COM faces and their impact on the company’s objectives.

Question

The board has recognized that the company faces several business risks which, individually or together, could affect COM and its objectives and/or prospects. The board needs a briefing paper from the CEO on the current significant business risks that the company may be exposed to.

Required:
You are an Advisor to the CEO and he has asked you to prepare a briefing paper to be added to the board pack identifying and assessing the impact of FOUR (4) key business risks that COM must address in order to achieve its strategic objectives. Clearly identify the specific conditions giving rise to each key risk.

Answer

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Tags: Business risk, Credit risk, Liquidity risk, Market Risk, Technological Risk
Level: Level 3

Topic: Identifying and assessing risk
Series: NOV 2021

SCS – Nov 2021 – L3 – Q5 – Internal Analysis

Prepare a business plan extract with a focus on competitive and market analysis of COM Ltd.

Question

A level 300 student in the University of Ghana has approached you to assist her with her project work. She is undertaking a study of COM as a business case and she would need guidance on specific areas in the preparation of a business plan.

Required:
Prepare an extract of a business plan on the following based on the company, COM:

a) Competitive Analysis (5 marks)
b) Market Analysis (5 marks)

Answer

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Tags: Business Plan, Competitive analysis, Market Growth, Market Segmentation, Telecommunications
Level: Level 3

Topic: Internal analysis
Series: NOV 2021

SCS – Nov 2021 – L3 – Q4 – Professional Practice and Codes of Ethics

Present factors that assess the independence of independent non-executive directors according to the Code of Best Practices.

Question

The board of COM currently consists of one executive director, the CEO, six non-independent non-executive directors (NEDs), and three independent NEDs. The chairman of the board has indicated that since the company is now listed, it is prudent to increase the number of independent NEDs. This, in the view of the board chairman, will ensure a ‘balance of power’ on the board so that no individual or small group of individuals can dominate decision-making by the board.

Required:
The Board chairman has approached you, a corporate governance expert and consultant, to make a presentation to the board on the factors that would be considered in selecting independent NEDs as provided in the Code of Best Practices on Corporate Governance. Limit the factors to FOUR (4).

Answer

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Tags: Board Structure, Code of Best Practices, Corporate Governance, Director Independence, Governance, Independent NED
Level: Level 3

Topic: Professional practice and codes of ethics
Series: NOV 2021

SCS – Nov 2021 – L3 – Q3 – Competitive Forces

Evaluate how the competitive environment of COM affects the realization of its BRIGHT strategy.

Question

The company is facing increasing competition in its drive to remain the market leader and sustain the current competitive advantage. The market intelligence report commissioned by the board points to a highly competitive outlook. An industry analysis based on the current available information is required by the board, and the CEO has been requested to prepare a detailed presentation for the next board meeting.

Required:
Evaluate how the competitive environment of COM will affect the realization of the company’s BRIGHT strategy.

Answer

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Tags: Buyer Power, Competitive analysis, Industry Rivalry, Porter’s Five Forces, Strategy, Substitutes, Supplier Power, Threat of Entrants
Level: Level 3

Topic: Competitive forces
Series: NOV 2021

SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

Question

The board members discussed the future of the BRIGHT strategy of the company in the context that the strategic position of the company continues to evolve at a rather unpredictable rate. The board is interested in gaining a thorough insight into the factors that will pose material downside and upside risk to the strategic position of the company. The chairman of the board would like to discuss the draft memorandum of the company’s strategic position with the CEO prior to the next plenary board meeting.

Required:
Prepare a draft presentation explaining to the Board Chairman the current factors that are negatively impacting the strategic position of the company from the general external environment and internal perspectives.

Answer

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Tags: BRIGHT Strategy, Competitive Advantage, External Environment, Internal Environment, PESTEL Analysis, Risk Assessment, Strategy, Threats
Level: Level 3

Topic: Environment analysis
Series: NOV 2021

SCS – Nov 2021 – L3 – Q1 – Strategy Implementation

Classify and assess services provided by COM using the Boston Consulting Group (BCG) Matrix and recommend a strategy for each service.

Question

At the First Quarter 2021 Board meeting, the performance of the company was reviewed following a comprehensive presentation of the financial performance for the year ended 2020 by the Chief Executive Officer (CEO), Elikem Cubbagee. Although the directors were generally satisfied with the performance of the company and the presentation, they expressed concern that the performance of the various services provided by the company was missing in the presentation.

Required:
You are an Advisor to the Board Chairman, and he has directed you to write a report assessing and classifying the various services provided by the company using the Boston Consulting Group (BCG) Matrix. The report should include recommendations of an appropriate strategy or action the board should pursue with respect to each of the services classified in the report. Your report should contain an appendix showing the detail computations supporting your classification of the services.

Answer

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Tags: BCG Matrix, Portfolio analysis, Service Classification, Strategy
Level: Level 3

Topic: Strategy implementation
Series: NOV 2021

SCS – Dec 2022 – L3 – Q8b – Controlling risk

Explanation of ways to embed risk awareness within an organisation.

Question

The risks that TCWL automated systems could be exposed to can be controlled and managed through embedding risk awareness in the culture of the organisation. Creating a culture of risk awareness is the responsibility of the board of directors and senior management of TCWL.

Required:
Explain FOUR (4) ways by which the Board can create and embed risk awareness in the culture of TCWL to ensure that systems risks are controlled effectively. (5 marks)

Answer

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Tags: Corporate Governance, risk awareness
Level: Level 3

Topic: Controlling Risk
Series: DEC 2022

SCS – Dec 2022 – L3 – Q8a – Controlling risk

Explanation of risks faced by automated systems and ways to embed risk awareness within an organisation.

Question

TCWL production processes and operations are highly automated, and this may expose the company to major risks with high potential of negative consequences for the business.

Required:
Explain FOUR (4) major risks that TCWL automated systems could suffer. (5 marks)

Answer

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Tags: Automated systems, Corporate Governance, risk awareness, Risk Management, System Vulnerabilities
Level: Level 3

Topic: Controlling Risk
Series: DEC 2022

SCS – Dec 2022 – L3 – Q7 – Strategy, stakeholders, and mission

Explanation of required corporate disclosures and measures to maximise shareholder engagement in a listed company.

Question

The Ghana Code of Best Practices for Corporate Governance specifies a number of disclosures that should be included in an annual report of a listed company, in addition to those required by law or other regulations. The new CEO has presented a paper to the Board recommending that the company should go public to raise some equity capital to partially finance its expansion plans. The listing of the company would result in an increased number of shareholders.

Required:

a) Explain to the Board SIX (6) statements that must be disclosed in the annual report of TCWL after listing on the Ghana Stock Exchange. (6 marks)
b) The Code of Best Practices recommends measures that aim at maximising attendance and involvement by shareholders in the company. Briefly discuss FOUR (4) of those measures. (4 marks)

Answer

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Tags: Annual Reports, Corporate Governance, Disclosures, Ghana Code of Best Practices, shareholder engagement
Level: Level 3

Series: DEC 2022

Subject: STRATEGIC CASE STUDY

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SCS – Nov 2024 – L3 – Q5c – Board Independence and Accountability in Corporate Governance

Evaluation of how the governance structure at BOGML affects board independence and accountability.

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SCS – Nov 2024 – L3 – Q5b – Board Responsibilities in Corporate Governance

Evaluate the role of the board in corporate governance, focusing on responsibilities for strategy, oversight, and ethical leadership.

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SCS – Nov 2024 – L3 – Q5b – Board Responsibilities in Corporate Governance

Identify and explain the five governance pillars in the National Corporate Governance Code for Ghana 2022.

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SCS – Nov 2024 – L3 – Q4c – Forward Rate Agreement for Interest Rate Risk Management

Calculation of settlement amount for FRA under different Ghana Reference Rate (GRR) scenarios.

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SCS – Nov 2024 – L3 – Q4b – International Tax Considerations

Key tax issues for BOGML’s planned international expansion to minimize total group tax payable.

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SCS – Nov 2024 – L3 – Q4a – Capital Budgeting Framework

Explanation of the five key elements in the capital budgeting framework for investment appraisal.

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SCS – Nov 2024 – L3 – Q3a-b – SBUs and Growth Phases

Evaluate BOGML’s SBUs using Ashridge Matrix and analyse growth phases with Greiner’s Model.

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SCS – Nov 2024 – L3 – Q2b – Integration/Responsiveness Matrix and Cost Reduction

Advising BOGML’s MD on the best international strategies under the IR Matrix to achieve cost reduction in expansion.

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SCS – Nov 2024 – L3 – Q2a – Approaches to Risk Management

Discusses risk management approaches to address identified risks in BOGML.

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SCS – Nov 2024 – L3 – Q1b – Digital Challenges in Accounting

Discuss the challenges of digital transformation in accounting, covering cybersecurity, compliance, and ethical concerns.

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SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

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SCS – Nov 2021 – L3 – Q6 – Identifying and Assessing Risk

Identify and assess four key business risks that COM faces and their impact on the company’s objectives.

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SCS – Nov 2021 – L3 – Q5 – Internal Analysis

Prepare a business plan extract with a focus on competitive and market analysis of COM Ltd.

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SCS – Nov 2021 – L3 – Q4 – Professional Practice and Codes of Ethics

Present factors that assess the independence of independent non-executive directors according to the Code of Best Practices.

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SCS – Nov 2021 – L3 – Q3 – Competitive Forces

Evaluate how the competitive environment of COM affects the realization of its BRIGHT strategy.

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SCS – Nov 2021 – L3 – Q2 – Environment Analysis

Analyze and present factors negatively impacting the strategic position of COM from both external and internal perspectives.

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SCS – Nov 2021 – L3 – Q1 – Strategy Implementation

Classify and assess services provided by COM using the Boston Consulting Group (BCG) Matrix and recommend a strategy for each service.

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SCS – Dec 2022 – L3 – Q8b – Controlling risk

Explanation of ways to embed risk awareness within an organisation.

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SCS – Dec 2022 – L3 – Q8a – Controlling risk

Explanation of risks faced by automated systems and ways to embed risk awareness within an organisation.

You're reporting an error for "SCS – Dec 2022 – L3 – Q8a – Controlling risk"

SCS – Dec 2022 – L3 – Q7 – Strategy, stakeholders, and mission

Explanation of required corporate disclosures and measures to maximise shareholder engagement in a listed company.

You're reporting an error for "SCS – Dec 2022 – L3 – Q7 – Strategy, stakeholders, and mission"

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