Corporate Governance and Climate Change Risk Management: A Case Study of Transport Industry in Hong Kong

The chapter considers whether company law and corporate governance-related initiatives provide effective mechanisms for holding corporations to account for their contribution to climate change. A key regulatory device targeted at corporations is disclosure, the goal of which, in this context, is to achieve greater transparency regarding the risks and opportunities connected to climate change. The chapter explores to what extent climate change-related reporting contributes to the efforts towards reducing global warming. It is argued that there are a number of significant problems with climate-related reporting in its current state, in so far as there are many different requirements, including standards, codes, guidelines, at industry or sector level as well as at national and international levels; all these combined create a chaotic reporting landscape. Moreover, there is no meaningful link between the disclosures required under company law and initiatives within the area of environmental protection; hence it becomes difficult to identify clearly what the key reporting information is and what the responses and possible legal consequences of any such disclosures should be. Consequently, corporations’ accountability for their contribution to climate change is open to question.

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Tesco Accounting Misstatements: Myopic Ideologies Overshadowing Larger Organisational Interests

SDMIMD Journal of Management ◽

10.18311/sdmimd/2016/8410 ◽

2016 ◽

Vol 7 (1) ◽

pp. 9

Author(s):

Gagan Kukreja ◽

Sanjay Gupta

Keyword(s):

Risk Management ◽

Corporate Governance ◽

Control Systems ◽

Internal Controls ◽

Enterprise Risk Management ◽

Reporting Standards ◽

Management Change ◽

The People ◽

Enterprise Risk

This case study explores what went wrong in Tesco that resulted in the fraud of accounting misstatements of the magnitude of £263 million, why the fraud remained undetected over a number of years, which resulted in catastrophic consequences for both Tesco and its stakeholders. Furthermore, it highlights the lessons learnt from this debacle in Tesco, with focus on enterprise risk management, change management, corporate governance, materiality of transactions from accounting perspective, auditors' independence, sound accounting practices, internal controls and, employees' incentives policies. Finally, while the ultimate price of these scandals is paid by the society at large - particularly stockholders who put their hard earned savings in these institutions just on the basis of their trust on them - and while such scandals are often attributed to gaps in internal controls and auditors' negligence, this study concludes that, whatever controls are put in place or whatever accounting and reporting standards are set, if the people who are the part of system themselves decide to bypass the control systems, it is next to impossible to prevent such fraudulent activities. This case study has been prepared for educational purposes based on public available sources such as newspapers, magazines, websites and other referred articles.

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