By Emile Woolf International Publishing
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Additional resources for ACCA P1 Governance, Risk and Ethics
The principals in this relationship are the taxpayer and the electorate (often one and the same) and are likely to be concerned with value for money. There are problems associated with making an assessment of whether an organisation is indeed providing value for money: The principals are a heterogeneous group consisting of a large number of individuals. The group might not agree what actually constitutes value for money or even if the service is required at all. The government must make © Emile Woolf Publishing Limited 45 Paper P1: Governance, risk and ethics political decisions as to how public money should be spent in a way that they believe is best for the country.
The directors The board of directors is a significant stakeholder group in a company because they have the power to direct the company. Directors act as agents for the company and represent the interests of the company. A board of directors consists of both executive and non-executive directors. Executive directors have executive responsibilities as managers in the company, in addition to their role as director. They are usually full-time employees of the company. Non-executives are not involved in executive management and are very much ‘part time’ and in many countries (for example the UK and US) they are not company employees.
A stakeholder has been defined (by Freeman 1984) as: ‘any group or individual who can affect or [be] affected by the achievement of an organisation’s objectives. An important part of this definition is that a stakeholder may: be affected by what the organisation does affect what the organisation does, or both be affected by and affect what the organisation does. Companies have stakeholders. A stakeholder in a company is someone who has a ‘stake’ in the company and an interest in what the company does.
ACCA P1 Governance, Risk and Ethics by Emile Woolf International Publishing