IndexCorporate GovernanceExecutive SummaryIntroductionCorporate GovernanceRisk ManagementRecommendationsCorporate GovernanceExecutive SummaryCorporate governance provides an organization with specific rules to follow to ensure best practices. Mitchells & Butlers is a company that scrupulously observes the United Kingdom Corporate Governance Code in its operations, to which the top management consisting of the Board of Directors adheres. The company also has adequate risk management measures in place. Risk management helps the company identify risks and devise appropriate mitigation activities before they impact the company's daily operations. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Introduction Corporate governance involves the system of practices, processes, and rules through which a company is controlled and directed. One of the primary roles of the Mitchells & Butlers Board of Directors is to provide leadership to over 44,000 employees and maintain the highest standards of corporate governance (Bowers, 2012, p.1). The Board of Directors has remained stable since Phil Urban joined the company as Chief Operating Officer in early 2015. Urban was the one who replaced Alistair Darby, the CEO who stepped down and stepped down by Mitchells & Butlers. Urban has proven without a doubt that he can be a good CEO thanks to his record of operating results. Mitchells & Butlers operates in line with the best practice recommendations of the UK Corporate Governance Code which have facilitated the review of the Board's effectiveness in corporate governance. Risk management involves identifying, prioritizing and evaluating risks. At Mitchells & Butlers Company, risk is first identified. Assessment of its likelihood and impact then follows, followed slightly by agreement on gross risk mitigation plans. The net risk review after mitigation then occurs. The final stage of risk management is reporting risk assessments to the risk committee and the audit committee. This essay will focus on risk management and corporate governance at Mitchells and Butlers Company. Corporate Governance Corporate governance involves certain responsibilities to be carried out by the Board of Directors, which concern Mitchells & Butlers. There are five main roles played by the Board and which contribute significantly to corporate governance. The first is to determine the commercial strategy and overall business. The second is to identify the company's long-term goals. The third is to review your financial plans and operating budget and carefully monitor progress against plans. The fourth is to determine the basis on which capital is allocated (Mitchells & Butlers plc, 2015, p.46). Last but not least is to consider all political issues relating to the activities of Mitchells & Butlers, including any major political changes. The Corporate Governance Statement also clearly shows that Mitchells & Butlers Group complies with the UK Corporate Governance Code. It is the Board's primary duty to ensure that all activities of Mitchells & Butlers and its various businesses are often conducted in accordance with the law, good practice, rules and regulatory requirements, ethically and with adequate and appropriate governance and standards. This involves reviewing internal controls and ensuring there is an appropriate balance betweenexperience and expertise represented by the Board complies with the UK Corporate Governance Code. Furthermore, the relationship between the company and the shareholders should always be maintained. According to Mitchells & Butlers chairman, Bob Ivell, the Council is committed to delivering high standards of corporate governance. The composition of the Board and the establishment of the board committees represent among the best provisions and practical indications offered by the Code. For example, in 2015 the appointment of the Senior Independent Director, Stewart Gilliland, highlighted failure to comply with the Code. Furthermore, the nomination committee report and audit committee report are taken into consideration in corporate governance. The Board of Mitchells & Butlers primarily recognizes the importance of good corporate governance, especially in creating a successful, profitable and sustainable business where the details are well defined in the form of corporate governance enforcement procedures and principles (Coatsworth, 2013, p. 1). The fundamental part of the Code is that it is made up of recommendations of good practices that concern corporate governance while incorporating individual cases. The members of the Board in 2015 were nine directors. The Board constitutes the top management of the Mitchells & Butlers Group and is accountable to all stakeholders, including shareholders. The Board is the one that approves annual capital, revenue budgets and strategic plans. It also performs a significant review of investment proposals and past investment performance while maintaining an overview. The Board monitors the overall internal control system, compliance and governance and ensures that the necessary technical, human and financial resources are in place to achieve all of its objectives. Particularly in the field of human resource planning, it is necessary to carry out hiring, selection, recruitment, training and development activities. In the hiring and placement process, the best employees are selected and the qualified ones are then interviewed and selected. Human resource management ensures that the employees selected are the best who are then entitled to training and development to suit their roles. This makes employees adhere to the various rules and regulations set out in the Corporate Governance Code as they clearly understand them. Eleven Board meetings were scheduled for the 2015 financial year. The Audit Committee held four meetings and the Remuneration Committee also held four meetings. The Nomination Committee was entitled to only two meetings. These meetings are important because the comparison carried out constitutes a further study of the best practices for compliance with the Code. The level of participation was good, meaning that the majority of leaders appreciate the importance of the Code in Mitchells & Butlers' business. If a director was unable to attend a particular meeting, it is essential that he or she is provided with all necessary information and documents. If there are matters that the director wishes to discuss, he can present them to the Presidential Council. Board members also meet informally approximately five times a year, while non-executive directors, in the absence of executive directors, meet twice a year (Ellson, 2013, p.1). The company secretary has certain responsibilities including ensuring a good flow of information between senior management and the non-executive directors of the board. Through the consent given by the president, the secretary advises on all corporate governance matters and assists directors in professional development. The type of assistanceprovided includes company updates, provision of external courses and visits to the operational site. It is also the duty of the company secretary to introduce newly appointed directors to the Board where they receive guidance on the qualifications necessary in relation to duties compliant with the Code together with the Companies Act 2006. To make room for others, all directors of Mitchells & Butlers must appear for the annual re-election at the Annual General Meeting and this must be done in accordance with the Articles of Association of the company. The division of roles between the CEO and the President is clearly established and defined in writing by the Board. Upon appointment, the President of Mitchells & Butlers must possess the independence criteria set out in point B.1.1. of the Code, which Bob Ivell met. Prior to becoming president, Ivell had served as CEO and non-executive chairman of the company. As defined by the Code, the primary task of the president is to ensure that there is effective and adequate communication between the company and the shareholders. The president also ensures that all directors are adequately informed by the company secretary about the roles they will have to hold. The CEO has the task of implementing the strategies agreed by the Board and general management. The Senior Independent Director primarily supports the Chairman of the Company in achieving the objectives of the Board and ensures that the main opinions of stakeholders and shareholders are conveyed. Directors receive regular training as needed at any time of the year and also have annual training. This means their skills and experience are enhanced and they are updated on current business trends and compliance with the Code, which is a priority for Mitchells & Butlers. Mitchells & Butlers recognizes the importance of diversity and recognizes it in its operations. The company respects diversity in backgrounds, skills, industry experience, gender, international experience and knowledge. The Council ensures that merit is valued based on individual skills, expertise and capabilities. The Board also ensures that the directors have sufficient experience and that they have character and independent judgment. The Nomination Committee agrees measurable objectives for achieving diversity in accordance with the UK Corporate Governance Code set out in point B.2.4. Where Mitchells & Butlers does not comply with the Code, it ensures that it reviews that part until it is compliant. For example, in 2015, Mitchells & Butlers failed to comply with point B.2.1 of the Code as the Appointments Committee did not consist of a majority of independent non-executive directors (Gerrard, 2010, p.1). Mitchells & Butlers' code of ethics is well implemented with clear guidelines describing the standards of behavior expected of all employees working at the company. Employees are expected to comply with the Code and the Bribery Act 2010. There should be a difference in professional and personal relationships between employees. Hospitality offered by employees to suppliers must be approved in advance by the relevant senior management. The training offered to directors includes social, governance and environmental issues. Financial documents must be presented in accordance with International Financial Reporting Standards (IFRS) or generally accepted accounting practices in the United Kingdom. The primary role of the Audit Committee is to review and maintain oversight of the corporate governance of Mitchells & Butlers. This applies in particular with regard to internal control, risk management andfinancial reporting. Risk Management At Mitchells & Butlers, there are five steps involved in risk management. The first step involves identifying the risk. Then follows the evaluation of its probability and its impact. In this phase, the effects of the risk and the probability that it will occur in the identified risk are measured. So what follows is to agree gross risk mitigation plans. This involves brainstorming all possible risk mitigation measures that should be taken to resolve the risk (Mitchells & Butlers plc, 2014, p.38). The most appropriate risk mitigation measures are those applied to manage that particular risk. The net risk review after mitigation then occurs. This means that every mitigation measure has its consequences. It is at this point that the consequences of the risk are weighed. The final stage of risk management is reporting risk assessments to the risk committee and the audit committee. Risk assessments are reported to the audit committee and risk committee so that they can take respective actions. Mitchell & Butlers addresses marketing risks, which they have already identified, which could affect the company's long-term sales. Demographic and social objectives are primarily driving long-term growth leading to the steady decline in non-food beverage sales in the on-trade. These changes, combined with developments in consumer taste, may reduce the attractiveness of the Mitchells & Butlers brands, particularly to its guests. Therefore, Mitchells & Butlers is required to respond to such changes in a timely and appropriate manner. To mitigate market risks, the company conducted consumer research by interviewing approximately 8,000 consumers and approximately 14,000 leisure occasions (Holmes and Ahmed, 2009, p.1). The research was able to examine consumer dynamics, macroeconomic trends, internal and competitive brand positioning, as well as strengths and weaknesses. From the research, the company has identified some implementations that need to be made to ensure the portfolio continues to be relevant to its guests. Mitchells & Butlers Company primarily uses an online guest satisfaction survey which collects guest feedback. The guest's feedback along with the results obtained from the various research studies are regularly evaluated and monitored by a certain dedicated team, which ensures that the relevance to the guest is observed and maintained as it is one of the main priorities of the company. The company's net promoter improved from 59% in 2013 to 63% in 2014. What allows Mitchells & Butlers to remain relevant to its guests is that it ensures that consumer opinions are highly valued and that product changes existing ones are created to meet customer needs. When consumers are involved in the decision-making process, the products and services provided to them do not require any modification or not once produced. Managing risk in price and market changes is important as these changes would have negative impacts on consumer spending patterns. consumers. This can also impact a company's competitive advantage in the industry. Therefore, these types of risks could impact the company's profitability and revenue, which would ultimately impact the value of the company's assets. This price risk is addressed by focusing on the long-term potential of the market. We have seen that Mitchells & Butlers has a site that extends various offers to different groups in the UK. The company targets different consumer groups and leisure opportunities. This wide range ofconsumers often allows Mitchells & Butlers to respond appropriately to changes in consumer spending by replacing a particular brand in a particular location or by modulating offers. The company has sales and margin managers and asset planning groups who are responsible for evaluating and analyzing information obtained from the site and compared to other competitors. So the company has good offers in various locations, which gives it a competitive advantage. Operational risks occur when the cost of goods and services increases. The increase in utility product prices and resale costs is due to increased global demand and supply uncertainty. Producing countries can have a significant effect on the cost base which subsequently impacts margins. Mitchells & Butlers carries out various activities to mitigate the above operational risks. The company leverages its size to drive competitive cost merit and collaborates strongly with suppliers to increase efficiency in the supply chain. The fragmented nature of food supply in global commodity markets allows the company to source products from various alternative suppliers, which helps them reduce costs (McKenna, 2010, p.1). Additionally, Mitchells & Butlers evolves its retail pricing and menu composition to optimize value for its guests and profits for the business. Therefore, the company decides where to source products based on the price that will allow them to offer competitive profits and earn a reasonable profit margin. Furthermore, as a measure taken by the company, there is an energy supply strategy. The strategy is to reduce the risk of rising costs and uncertainty about energy prices. The strategy establishes a medium- and short-term purchasing program that goes against the expected requirements. The energy management team is responsible for optimizing energy throughout the organization, primarily by promoting energy efficiency practices. This team provides education and training programs to staff members and installs energy-efficient equipment that promotes energy savings in the daily operation of the business. Risk management in individual planning and development is provided at Mitchells & Butlers. As we have seen, the company has a strong focus on its guests and the company's important values ​​involve retaining, attracting, motivating and developing the best people who have the right skills within the organisation. To mitigate risk in planning and development, Mitchells & Butlers invests heavily in training to ensure that its employees have the necessary skills to carry out their tasks successfully and with much ease. Additionally, an employee survey is often conducted each year, establishing worker satisfaction and engagement, which is then compared to that of other companies. Where deemed appropriate, changes in working practices are usually made in response to the findings provided by investigations. Compensation packages ensure that a talent review process is used for the company to remain competitive. This means that Mitchells & Butlers observes surveys to make relevant changes. This is an appropriate way to resolve the risks as consumers will always provide better feedback which will help the company continue to be competitive and attract more guests through referrals. The company's staff turnover has remained very low, at approximately 78% since 2013 (Jones, Comfort, & Hillier, 2006, p.342). Risk managementin business continuity and crisis management is appreciated by the company. Mitchells & Butlers relies heavily on its food and beverage supply chain and its IT systems to serve its guests effectively and efficiently. Supply chain disruption, terrorist activity, the threat of epidemics, and IT system failure or crisis can limit sales or even reduce the company's operational effectiveness. The mitigation activity undertaken by the company is to ensure that continuity plans and IT systems are regularly updated and tested to avoid failures. In September 2014 the Retail Support Center was tested which ensured that, in the event of a disaster, critical business systems functioned normally. This means that in the event that a system failure occurs in the company, some vital backup facilities have been put in place, which ensure that critical services are still offered to customers while waiting for the main system to recover from failures. Backup is very important as data is stored which is then recovered and saved in the working system once it is restored. Therefore, employees work without fear of system failure as they know that once the system resumes no manual work will be done, it will simply continue to function as usual. Risk management in the financial field is done with greater forecasting to ensure that the company has money to keep it running even during times of crisis. There may be risks related to loan covenants, which could arise from the changing economic climate and which would lead to a reduction in cash inflows. Furthermore, this type of risk can occur when there is a material change in the valuation of the real estate portfolio. Mitigation activities are performed by the finance team. This team carries out cash forecasts on a daily basis with periodic reviews at the Treasury Committee. They adhere to the board's treasury policy by monitoring the company's operations and agreeing on appropriate strategies recommended to the company's board. Furthermore, to be on the safe side, regular testing and forecasting of covenant compliance is carried out and frequent communications are maintained with the securitization trustee. This means that once a crisis is foreseen, the company prepares the money in advance to avoid last-minute rush, which could force the company to enter into a loan agreement to allow it to continue operating. Pension fund deficits typically remain a risk, although Mitchells & Butlers has made a big contribution to reducing them. Regulatory risk management focuses on the failure of a legal and safe operation. A primary health and safety failure would lead to injuries, loss of life, significant losses and illnesses, which could destroy the company's brand reputation. Mitchells & Butlers often maintains a very robust program of health and safety checks both in its pubs and restaurants and throughout its supply chain. The company has a dedicated safety audit team that uses technical partners that include microbiologists, allergen specialists and food technologists to ensure that food procedures are safe and produce healthy food for their guests (Scuffham and Davey, 2012, p .1). There are regular independent audits, carried out to ensure that procedures are strictly followed and that appropriate standards are generally maintained. Food suppliers are required to meet the British Retail Consortium's Global Food Safety Standard and undergo regular quality and safety checks..