
1. Main Stakeholders and Contrasting Interests
1.1. Shareholders
1.1.1. Employees
1.1.1.1. Interest: Job security, fair compensation, and growth opportunities. Potential Conflict: Cost-cutting measures prioritized by owners or managers can affect employee welfare.
1.1.2. Interest: Maximizing share value and receiving dividends. Potential Conflict: May push for higher short-term dividends that might limit reinvestment opportunities for growth.
1.1.3. Customers
1.1.3.1. Interest: High-quality products/services at competitive prices. Potential Conflict: Profit-maximizing initiatives can lead to reduced quality or increased prices.
1.1.4. Suppliers
1.1.4.1. Interest: Timely payments and long-term business relationships. Potential Conflict: Pressure from owners or managers to reduce costs might result in delayed payments or strained terms.
1.1.5. Regulators
1.1.5.1. Interest: Compliance with laws and ethical practices. Potential Conflict: Owners and managers may prioritize profits over strict regulatory adherence.
1.2. Stakeholders
1.2.1. Owners
1.2.1.1. Interest: Maximizing long-term profits and business value. Potential Conflict: May resist investments with delayed returns favored by managers or shareholders.
1.2.2. Managers
1.2.2.1. Interest: Achieving operational targets and securing performance-based compensation. Potential Conflict: May prioritize short-term performance over sustainable growth, conflicting with owners' or shareholders' preferences.
2. Governance, Accounting Ethics, Legal and Regulatory Differences
2.1. FTSE-Listed Organisations
2.1.1. Governance
2.1.1.1. Structure: Formalized governance with boards of directors, including independent non-executive members. Transparency: High due to mandatory compliance with the UK Corporate Governance Code. Shareholder Engagement: Regular general meetings and stringent reporting obligations ensure transparency.
2.1.2. Accounting Ethics
2.1.2.1. Standards: Compliance with International Financial Reporting Standards (IFRS). Ethics Monitoring: External audits ensure adherence to ethical practices and financial accuracy.
2.1.3. Legal Environment
2.1.3.1. Regulation: Strict oversight by the Financial Conduct Authority (FCA) and other regulatory bodies. Penalties: Significant penalties for non-compliance, including fines and legal repercussions.
2.1.4. Regulatory Environment
2.1.4.1. Reporting: Quarterly and annual reports, plus disclosures for shareholders. Audits: Independent auditing is mandatory.
2.2. Non-Listed Private Limited Companies
2.2.1. Legal Environment
2.2.1.1. Regulation: Subject to Companies Act 2006 but less oversight compared to public companies. Penalties: Typically smaller fines for non-compliance
2.2.2. Governance
2.2.2.1. Structure: Flexible governance structures, often controlled by a small group of stakeholders (e.g., family or close associates). Transparency: Limited, with no obligation to disclose extensive financial details publicly.
2.2.3. Accounting Ethics
2.2.3.1. Standards: Generally adheres to UK Generally Accepted Accounting Principles (UK GAAP). Ethics Monitoring: Reliant on internal practices; external audits are optional unless mandated by stakeholders
2.2.4. Regulatory Environment
2.2.4.1. Reporting: Annual accounts filed with Companies House but less detailed. Audits: Only required for larger private companies or at stakeholder request.