A
After a number of serious failures of governance (that is, how they are managed at the highest level), companies in Britain, as well as elsewhere, should consider radical changes to their directors’ roles. It is clear that the role of a board director today is not an easy one. Following the 2008 financial meltdown, which resulted in a deeper and more prolonged period of economic downturn than anyone expected, the search for explanations in the many post-mortems of the crisis has meant blame has been spread far and wide. Governments, regulators, central banks and auditors have all been in the frame. The role of bank directors and management and their widely publicised failures have been extensively picked over and examined in reports, inquiries and commentaries.
B
The knock-on effect of this scrutiny has been to make the governance of companies in general an issue of intense public debate and has significantly increased the pressures on, and the responsibilities of, directors. At the simplest and most practical level, the time involved in fulfilling the demands of a board directorship has increased significantly, calling into question the effectiveness of the classic model of corporate governance by part-time, independent non-executive directors. Where once a board schedule may have consisted of between eight and ten meetings a year, in many companies the number of events requiring board input and decisions has dramatically risen. Furthermore, the amount of reading and preparation required for each meeting is increasing. Agendas can become overloaded and this can mean the time for constructive debate must necessarily be restricted in favour of getting through the business.
C
Often, board business is devolved to committees in order to cope with the workload, which may be more efficient but can mean that the board as a whole is less involved in fully addressing some of the most important issues. It is not uncommon for the audit committee meeting to last longer than the main board meeting itself. Process may take the place of discussion and be at the expense of real collaboration, so that boxes are ticked rather than issues tackled.
D
A radical solution, which may work for some very large companies whose businesses are extensive and complex, is the professional board, whose members would work up to three or four days a week, supported by their own dedicated staff and advisers. There are obvious risks to this and it would be important to establish clear guidelines for such a board to ensure that it did not step on the toes of management by becoming too engaged in the day-to-day running of the company. Problems of recruitment, remuneration and independence could also arise and this structure would not be appropriate for all companies. However, more professional and better-informed boards would have been particularly appropriate for banks where the executives had access to information that part-time non-executive directors lacked, leaving the latter unable to comprehend or anticipate the 2008 crash.
E
One of the main criticisms of boards and their directors is that they do not focus sufficiently on longer-term matters of strategy, sustainability and governance, but instead concentrate too much on short-term financial metrics. Regulatory requirements and the structure of the market encourage this behaviour. The tyranny of quarterly reporting can distort board decision-making, as directors have to ‘make the numbers’ every four months to meet the insatiable appetite of the market for more date. This serves to encourage the trading methodology of a certain kind of investor who moves in and out of a stock without engaging in constructive dialogue with the company about strategy or performance, and is simply seeking a short-term financial gain. This effect has been made worse by the changing profile of investors due to the globalisation of capital and the increasing use of automated trading systems. Corporate culture adapts and management teams are largely incentivised to meet financial goals.
F
Compensation for chief executives has become a combat zone where pitched battles between investors, management and board members are fought, often behind closed doors but increasingly frequently in the full glare of press attention. Many would argue that this is in the interest of transparency and good governance as shareholders use their muscle in the area of pay to pressure boards to remove underperforming chief executives. Their powers to vote down executive remuneration policies increased when binding votes came into force. The chair of the remuneration committee can be an exposed and lonely role, as Alison Carnwath, chair of Barclays Bank’s remuneration committee, found when she had to resign, having been roundly criticised for trying to defend the enormous bonus to be paid to the chief executive; the irony being that she was widely understood to have spoken out against it in the privacy of the committee.
G
The financial crisis stimulated a debate about the role and purpose of the company and a heightened awareness of corporate ethics. Trust in the corporation has been eroded and academics such as Michael Sandel, in his thoughtful and bestselling book What Money Can’t Buy, are questioning the morality of capitalism and the market economy. Boards of companies in all sectors will need to widen their perspective to encompass these issues and this may involve a realignment of corporate goals. We live in challenging times.
Nguồn: Cambridge IELTS 12
GIẢI THÍCH
| Đáp Án | Trích Dẫn | Giải Thích |
|---|---|---|
| 1. Many external bodies being held responsible for problems | Đoạn A: “the search for explanations… has meant blame has been spread far and wide. Governments, regulators, central banks and auditors have all been in the frame.“ | Đoạn A liệt kê nhiều tổ chức bên ngoài (external bodies) như chính phủ, cơ quan quản lý, ngân hàng trung ương và kiểm toán viên đã bị đổ lỗi (held responsible) cho cuộc khủng hoảng. |
| 2. The impact on companies of being subjected to close examination | Đoạn B: “The knock-on effect of this scrutiny has been to make the governance of companies in general an issue of intense public debate and has significantly increased the pressures on, and the responsibilities of, directors.” | Đoạn B mô tả tác động (impact) của việc bị kiểm tra chặt chẽ (close examination/scrutiny) lên các công ty: làm tăng áp lực và trách nhiệm lên các giám đốc. |
| 3. A risk that not all directors take part in solving major problems | Đoạn C: “board business is devolved to committees… which may be more efficient but can mean that the board as a whole is less involved in fully addressing some of the most important issues.” | Đoạn C nêu lên một rủi ro: việc ủy quyền công việc cho các ủy ban có thể khiến không phải tất cả giám đốc (not all directors) cùng tham gia giải quyết (take part in solving) những vấn đề quan trọng nhất. |
| 4. A proposal to change the way the board operates | Đoạn D: “A radical solution… is the professional board, whose members would work up to three or four days a week…” | Đoạn D đưa ra một đề xuất (a proposal) thay đổi triệt để cách thức hoạt động của hội đồng quản trị (thành hội đồng chuyên nghiệp làm việc toàn thời gian). |
| 5. Boards not looking far enough ahead | Đoạn E: “One of the main criticisms of boards and their directors is that they do not focus sufficiently on longer-term matters of strategy, sustainability and governance, but instead concentrate too much on short-term financial metrics.” | Đoạn E chỉ trích các hội đồng quản trị vì không nhìn đủ xa (not looking far enough ahead) về các vấn đề dài hạn. |
| 6. Disputes over financial arrangements regarding senior managers | Đoạn F: “Compensation for chief executives has become a combat zone where pitched battles between investors, management and board members are fought…” | Đoạn F tập trung vào các cuộc tranh chấp (disputes/combat zone) xung quanh việc sắp xếp tài chính (financial arrangements) dành cho các quản lý cấp cao (senior managers/chief executives). |
| 7. The possible need for fundamental change in every area of business | Đoạn G: “Boards of companies in all sectors will need to widen their perspective to encompass these issues and this may involve a realignment of corporate goals.” | Đoạn G kết luận rằng các hội đồng quản trị trong mọi lĩnh vực (all sectors/every area) có thể cần phải thay đổi cơ bản (fundamental change/realignment) quan điểm và mục tiêu của công ty. |
| 8. YES | Đoạn A & B: Đoạn A mô tả cuộc khủng hoảng năm 2008 dẫn đến nhiều cuộc điều tra. Đoạn B: “The knock-on effect of this scrutiny has been… significantly increased the pressures…” | Sự giám sát chặt chẽ (close scrutiny) đối với hành vi của hội đồng quản trị đã tăng lên (increased) sau cuộc suy thoái kinh tế (knock-on effect of this scrutiny). |
| 9. NOT GIVEN | (Không có thông tin) | Bài đọc có đề cập đến sự thất bại của các giám đốc ngân hàng (Đoạn A, D) nhưng không so sánh mức độ quản lý kém của ngân hàng với các ngành kinh doanh khác. |
| 10. NO | Đoạn B: “Agendas can become overloaded and this can mean the time for constructive debate must necessarily be restricted in favour of getting through the business.” | Bài đọc nói rõ rằng thời gian cho tranh luận bị hạn chế (restricted) chứ không phải các cuộc họp kéo dài theo nhu cầu (for as long as necessary) để thảo luận đầy đủ. |
| 11. NO | Đoạn C: “board business is devolved to committees… which may be more efficient but can mean that the board as a whole is less involved in fully addressing some of the most important issues.” | Sử dụng cấu trúc ủy ban (committee structure) thực tế có thể khiến các thành viên hội đồng không được thông tin đầy đủ (not fully informed) vì toàn bộ hội đồng ít tham gia giải quyết các vấn đề quan trọng. |
| 12. information | Đoạn D: “However, more professional and better-informed boards would have been particularly appropriate for banks where the executives had access to information that part-time non-executive directors lacked…” | Trước năm 2008, các giám đốc không điều hành (non-executive directors) bị bất lợi vì thiếu (lack of) thông tin (information) mà các giám đốc điều hành có. |
| 13. financial | Đoạn E: “but instead concentrate too much on short-term financial metrics.” | Các hội đồng có xu hướng đặt quá nhiều trọng tâm vào các cân nhắc tài chính (financial) chỉ có liên quan ngắn hạn (short-term). |
| 14. shareholders / investors | Đoạn F: “as shareholders use their muscle in the area of pay to pressure boards to remove underperforming chief executives.” | Trên một số vấn đề như lương thưởng, hội đồng quản trị có thể phải chấp nhận quan điểm của cổ đông (shareholders) vì họ có sức mạnh (muscle) để gây áp lực. Từ “investors” (nhà đầu tư) cũng được đề cập trong đoạn E và có thể chấp nhận được. |
