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Business Ethics and Corporate Governance

  • 11 Pages
  • Published On: 09-11-2023

1.1 Role of Code

It is evident that premium listing companies like Vodafone Plc in UK seems to be following its own respective code of conduct in compliance of managing and controlling its corporate governance and key ethical policies applicable for its business. In other words, the role of Code in a business firms mainly acts a legislation body and principles that needs to be followed and comply by the firms in respect of doing its business legally and ethically correct (Frc.org.uk. 2020). According to the annual report of the company, it seems that its corporate governance works in compliance with the structure of Digital Vodafone Way and its Code of Conduct as well.

1.2 Identification of Non-Executive Directors among the Board of members in Vodafone

According to the analysis the members are the ones that monitor and challenge all the actions, performances and results; they also give full assistance in the development, approval and review of strategic planning, with assistance in development (Vodafone UK News Centre. 2020).

Getting in terms with stakeholders and shareholders with a proving insight on their reaction and view on the basis of relation, the relationship between the employees and culture can be impaired well (Raheem et al. 2019). Being a member of the nomination and governance committee, they also on behalf of the board and key members of the senior management succession plans are revised and reviewed by them.

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1.3 Four examples of Vodafone having complied with the code

Board meetings are planned and modified in such a way that the structure allows open discussion, meetings with the Director and other Board members for awaring about what key and main decisions are taken and key discussions on the 3 principal committee (Kleiousis et al. 2019). The chairman is that part of the Board that leads into serious meeting and planning ideas as well. For example:

  • It makes sure the Board and itself gets the exact and rightful information about the working of the company.
  • In this respect, the Board monitor, guides about rightful information as well to its committees
  • It also take sound decisions, and always being in new ideas for discussion
  • It also takes a note of promoting of new culture among non executive directors and others for meeting purposes.

1.4 Contributions of Senior Independent non-executive director of Vodafone Plc in creating robust corporate governance structure

The company had contributed on major areas of concerns that are trusted and most faithful person and intermediary of the directors as required. In addition, meeting also take place with non-executive Director of the chairman and that is without the presence of the Chairman whenever necessary (Vodafone UK News Centre. 2020). At the same time, it is also required to appraise the Chairman and his performance, and communication with regards to the combination of nomination and governance committee for the purpose of meeting. In other words, it is often conducted on absence of the Chairman taking a serious note on the governance structure.

2.1 Succession plans (Principle J) recommended by the Code

The succession plan in Vodafone is based on a code and regulation of 2016, where a concept of diversity in a form including color, race, cultural beliefs, caste, creed, sexual orientation, gender etc. is followed (Raheem et al. 2019). The performance background of each member is thoroughly studied before making them a member of the board.

2.2. THREE examples complied with the Code regarding the establishment and composition of the nomination committee

Vodafone group PLC follows a particular code of diversity when it comes to appointing members to the board. The company keeps a track of experiences gained by the non executive directors. This helps in the contribution to the company’s objectives and also increases the telecommunication strength annually (Kleiousis et al. 2019). Mr. Samuel Jonah tenure on his post exceeded 9 years after, which he stepped down from his position This place was filled by Mr. Sanjiv Ahuja who had international from Europe, the US, Africa and Asia.

Mr. Margherita Della Valle and Mr. Nick Reed are also from two different regions all together were appointed to be member of the Board. These are some basic examples on how the nomination committee is positively affected by the code.

2.3 Vodafone’s performed regarding appointments and succession plans of the Board in 2019

The performance of the appointments and succession plan of 2016 had a positive report and impact by the end of March 2019, by appointing members to the board from different diverse skilled and technical person all together (Vodafone UK News Centre. 2020). It had also appointed time and schedule for this purpose as well.

2.4 The role of diversity in the Board of directors and give THREE examples

Diversity in the Board of Directors is wholly supported and followed by Vodafone’s Board of directors according to the 2016 code (Vodafone UK News Centre. 2020). It focuses on the company’s long term goal to increase diversity within the board. Diversity includes skills as well employee experience, along with age and gender that creates differentiation. In addition, disability, cultural background and beliefs are also responsible (Pechersky, 2016).

Examples of the 2016 code of diversity is seen in the letter sent to all the shareholders from the chairman, where the new board members welcomes to the team was Mr. Margherita Della Valle, a French gentle man while Samuel John who was standing down from the board was an English man and also a new non-executive director was appointed by the name Mr. Sanjiv Ahuja, an Indian.

2.5 How the nomination and governance committee is dealing with conflicts of interests

In any organization or business, conflicts of interest may occur thus affecting the board and the committee's effectiveness. This is dealt by the company under the Companies Act 2006, which talks about avoiding any and all situations that might have a direct or indirect link with to interest of the company (Adam, 2016). According to the Act, none of the Board members including the non executive directors and the chairman can invest their time in the conflicts instead focus on their duties and responsibilities towards the organization.

3.1 FIVE roles and responsibilities of the audit committee according to the Code

The audit committee has taken a serious role on managing financial flow along with risk management, control and assistance process and also external audits (Al-Qublani et al. 2020). This includes on focusing on the quality issues held on the company as well as looking into compliance cases. Apart from this, below are some other roles and responsibilities:

  • • It also focuses on implementing new account standards and any threats with respect to cyber security.
  • • This committee is responsible for reviewing the management along with the external auditors, the financial statements annually and half yearly
  • • The committee also advices the board on basis underlying the long term viability statement

3.2. FIVE examples of Vodafone Group PLC complying with the Code regarding the competence and independence of the audit committee

According to the study and research, it has been acknowledged that an audit committee needs to safeguard internal or confidential operations in terms of privacy is concerned (Eriandani et al. 2020). For example, the company had its compliance in the form of protecting its records of auditing report and had communicated with special reliable group for engaging its key partners along with audit implications on the key areas of litigations. At the same time, it had also thrown light on the legal compliance department for regular pattern of safeguarding its major locations of highly confidential concerns. On the other hand, it had also found that the department of PWC had its collaboration with the committee as well for conducting its sole responsibility to audit on finances (Vodafone UK News Centre, 2020).

3.3. Effectiveness of internal and external audit functions

The functions of the internal audit provide independent as well as objective assurance over the effectiveness of the design and objectives of internal control through the process of risk (Okodo et al. 2019). In this regard to the independence of the external auditors, any information or details in relation between PwC and the Company is received by the committee within law of securities administered by the US SEC. The committee is responsible for looking after their relationship with PwC which includes assessing their independence on an outgoing basis.

3.4. Dealing with FIVE principal risks

During the internal audit of 2018, the auditors focused on the five principal risks that is faced by Vodafone Group such as, threats of cyber channels, having unsafe information system of customers and privacy as well as digital resilience (Vodafone UK News Centre, 2020). Certain risks can be dealt with the following ways:

The company needs to have partnering with investors able to manage technical glitches and innovation on products and customers services

Apart from that, it can also be able to find out some major concerning locations of finding resources and supply chain partners to assist on digital transformations as well as reducing impact on privacy.

Lastly, it can find some effective R&D team to enhance its cyber risks and securing customer information system as well.

4.1 The role of remuneration committee in accordance with the Code

According to committee, it is the major role here to take the responsibility to has ensured that the decision regarding the remuneration policies for the staffs are made in line with the corporate governing norms (Suwadist, 2016). The stakeholders of the company implements reward package system for all the senior most executives. At the same time, they have decided to work on the remuneration policy in such a way that the Board members may have some benefit. It also ensures that there is full attendance during the annual meeting and planning’s for the growth and development of the company.

4.2. Five Internal condition and external condition:

Internal condition

Pay Fair at Vodafone act, as part of the pay review of the company and also looks after the payment scale and remuneration of the internal members of the board in a policy so that there is no discrimination (Vodafone UK News Centre, 2020). The other considerations are fair pay and the package is decided among all the line of work and employees in different level of the organization. Then it come to check how competition in the market is, free from discrimination and share in the success rate of the company and so on.

CEO pay cut ratio: The committee takes decision to pay cut ratio for the CEO and wider plan of remuneration.

External condition

The external considerations considered are mainly the trends and guidelines into the remuneration process, as per the process for the remuneration for the CEO. Pension: Employee engagement and meetings have brought to the notice, which is important to the Government and all levels of employees and Board of Directors having pension plans and therefore the CEO a pension plan as well as long-term incentive award.

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4.3 Compliance with the board

The organization had complied with the board, as per constant improvements and development in the committee. In addition, it had also planned to recover employee engagement in all levels of the employee process in the company (Ottawa, 2020). Other than this, the Board Of Directors directly see to the matters related to the remuneration that comes to their notice and outputs that are directly reported and brought forward to the Board and it is a firsthand experience in the hand of the Chairman of the Committee, as it is directly connected to the job everybody works on.

4.4 Remuneration Committee exercises

It can be acknowledged that often there is a practice of discretion in a company due to shareholder returns on crisis (Alhaj-Ismail et al. 2019). In this respect, Vodafone’ had its involvement while designing its packages of remuneration. For example, before approving the incentive slabs, the committee decides to take discreet downward decision to decide the remuneration and incentives planning for the chairman and other directors this year. The impacts of the total investment of the shareholder have also a total uplift in the company and so are also responsible for the remuneration packages. Another example, finds that the Chief Executive Directors retains all the post the tax share in order for smooth movement of incentive slabs and remuneration across the company.

References

Adam, Y.C., 2016. corporate governance anD nominee Directors–What Does it mean?. Management & Accounting Review (MAR), 15(2), pp.171-184.

Alhaj-Ismail, A., Adwan, S. and Stittle, J., 2019. Share-option based compensation expense, shareholder returns and financial crisis. Journal of Contemporary Accounting & Economics, 15(1), pp.20-35.

Al-Qublani, A.A.M., Kamardin, H. and Shafie, R., 2020. Audit Committee Chair Attributes and Audit Report Lag in an Emerging Market. International Journal of Financial Research, 11(4). Eriandani, R., Pirzada, K. and Kurniawan, M.K., 2020. The role of auditor characteristics: earnings management and audit committee effectiveness. Journal of Entrepreneurship and Sustainability Issues, 7(4), pp.3242-3252.

Frc.org.uk. 2020. Directors I Corporate Governance And Stewardship I UK Corporate Governance Code I Financial Reporting Council. [online] Available at: [Accessed 26 August 2020].

Kleiousis, E., Terzoglou, A., Valsamidis, D. and Tsourgiannis, L., 2019. Corporate Governance: A Comparative Analysis of the Accounts of the Telephone Companies Cosmote, Vodafone, and Wind. In Economic and Financial Challenges for Eastern Europe (pp. 509-523). Springer, Cham.

Okodo, D., Momoh, M.A. and Yahaya, A.O., 2019. Assessing the Reliability of Internal Audit Functions: The Issues. Journal of Contemporary Research in Business, Economics and Finance, 1(1), pp.46-55.

Ottawa, B., 2020. Corporate Governance Group Adds Members, Targets Vodafone. [online] IPE. Available at: [Accessed 27 August 2020].

Pechersky, A., 2016. Diversity in board of directors: Review of diversity as a factor to enhance board performance. Studia Commercialia Bratislavensia, 9(33), pp.88-101.

Raheem, A., Khan, M.A., Ramzan, M. and Rahman, H., 2019. TALENT IDENTIFICATION IN SHAPING EMPLOYEES’RELATIONAL AND TRANSACTIONAL PSYCHOLOGICAL CONTRACT: EVIDENCE FROM TELECOM ORGANIZATIONS.

Suwadist, R., 2016. Good Corporate Governance: Roles, Duties and Responsibilities of Remuneration Committee. Thammasat Business Law Journal, 6.

Vodafone UK News Centre. 2020. Management Team - Vodafone UK News Centre. [online] Available at: [Accessed 26 August 2020].


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