Question Verbs

QUESTION VERBS

ACCA examiners have highlighted the lack of understanding of the requirements of question verbs as the most serious weakness in many candidates’ scripts. Given below are some common question verbs used in exams.

Analyse

· Intellectual level 2, 3

· Actual meaning Break into separate parts and discuss, examine, or interpret each part

· Key tips Give reasons for the current situation or what has happened.

Apply

· Intellectual level 2

· Actual meaning To put into action pertinently and/or relevantly

· Key tips Properly apply the scenario/case.

Assess

· Intellectual level 3

· Actual meaning To judge the worth, importance, evaluate or estimate the nature, quality, ability, extent, or significance

· Key tips Determine the strengths/weaknesses/importance/significance/ability to contribute.

Calculate

· Intellectual level 2, 3

· Actual meaning To ascertain by computation, to make an estimate of; evaluate, to perform a mathematical process

· Key tips Provide description along with numerical calculations.

Comment

· Intellectual level 3

· Actual meaning To remark or express an opinion

· Key tips Your answer should include an explanation, illustration or criticism.

Compare

· Intellectual level 2

· Actual meaning Examine two or more things to identify similarities and differences

· Key tips Clearly explain the resemblances or differences.

Conclusion

· Intellectual level 2 ,3

· Actual meaning The result or outcome of an act or process or event, final arrangement or settlement

· Key tips End your answer well, with a clear decision.

Criticise

· Intellectual level 3

· Actual meaning Present the weaknesses/problems; evaluate comparative worth Don’t explain the situation. Instead, analyse it

· Key tips Criticism often involves analysis.

Define

· Intellectual level 1

· Actual meaning Give the meaning; usually a meaning specific to the course or subject

· Key tips Explain the exact meaning because usually definitions are short.

Describe

· Intellectual level 1, 2

· Actual meaning Give a detailed account or key features. List characteristics, qualities and parts

· Key tips Make a picture with words; identification is not sufficient.

Discuss

· Intellectual level 3

· Actual meaning Consider and debate/argue about the pros and cons of an issue. Examine in-detail by using arguments in favour or against

· Key tips Write about any conflict, compare and contrast.

Evaluate

· Intellectual level 3

· Actual meaning Determine the scenario in the light of the arguments for and against

· Key tips Mention evidence/case/point/issue to support evaluation.

Explain

· Intellectual level 1, 2

· Actual meaning Make an idea clear. Show logically how a concept is developed. Give the reason for an event

· Key tips Don’t just provide a list of points, add in some explanation of the points you’re discussing.

Illustrate

· Intellectual level 2

· Actual meaning Give concrete examples. Explain clearly by using comparisons or examples

· Key tips Add in some description.

  

Interpret

· Intellectual level 3

· Actual meaning Comment on, give examples, describe relationships

· Key tips Include explanation and evaluation.

List

· Intellectual level 1

· Actual meaning List several ideas, aspects, events, things, qualities, reasons, etc

  Key tips Don’t discuss, just make a list.

Outline

· Intellectual level 2

· Actual meaning Describe main ideas, characteristics, or events

· Key tips Briefly explain the highlighted points.

Recommend

· Intellectual level 3

· Actual meaning Advise the appropriate actions to pursue in terms the recipient will understand

· Key tips Give advice or counsel.

Relate

· Intellectual level 2, 3

· Actual meaning Show the connections between ideas or events

· Key tips Relate to real time examples.

State

· Intellectual level 2

· Actual meaning Explain precisely

· Key tips Focus on the exact point.

Summarise

· Intellectual level 2

· Actual meaning Give a brief, condensed account Include conclusions. Avoid unnecessary details

· Key tips Remember to conclude your explanation.

Mendelow Model

It is important for organisations to understand which groups of stakeholders can influence them the most as these stakeholders probably cannot be ignored. 

The Mendelow framework is used to understand the influence that each stakeholder has over the organisation’s strategy and objectives.

The organisation’s strategy for relating to its stakeholders depends on which part of the map the stakeholder falls into. This enables organisations to prioritise which stakeholders are more important than others.

1. Clearly, those stakeholders with high power and high interest are the most importance. They cannot be ignored and need to be actively managed by an organisation. It may be difficult if there are a several stakeholders in that section of the map as they may have competing claims and it will be difficult for the organisation to please all of them.
2. Stakeholders with high power and low interest must be kept satisfied as if they are concerned about the organisation’s operations it would be easy for them to take an interest and suddenly be influential.
3. Stakeholders with low power and high interest are interested in the organisation but have little power. They may be able to increase that power by forming alliances with other stakeholders. The organisation must keep them informed and watch their power base.
4. Stakeholders with low power and low interest can largely be ignored, although this strategy does not take into account any ethical considerations towards those stakeholders.

Classification of Stakeholders

Classification  of Stakeholders

Classification 1

Internal stakeholders

Employees, management

External stakeholders

The government, local government, the public, pressure groups, opinion leaders

Connected stakeholders

Shareholders, customers, suppliers, lenders, trade unions, competitors

Classification 2

Direct stakeholders

Those who know they can affect or are affected by the organisation’s activities – employees, major customers and suppliers

Indirect stakeholders

Those who are unaware of the claims they have on the organization or who cannot express their claim directly- wildlife, individual customers or suppliers of a large organization, future generations

Classification 3

Narrow stakeholders

Those most affected by organisation’s strategy- shareholders, managers, employees, suppliers, dependent customers

Wide stakeholders

Those less affected by the organisation’s strategy – government, less dependent customers, the wider community

Classification 4

Primary stakeholders

Those without whose participation the organization will have difficulty continuing as a going concern, such as customers, suppliers and government (tax and legislation)

Secondary stakeholders

Those whose loss of participation won’t affect the company’s continued existence such as broad communities

Classification 5

Active stakeholders

Those who seek to participate in the organisation’s activities. Stakeholders includes managers, employees and institutional investors, but may also include other groups not part of an organization’s structure such as regulators or pressure group

Passive stakeholders

Those who do not seek to participate in policy-making such as most shareholders, local communities and government

Classification 6

Voluntary stakeholders

Those who engage with the organization voluntarily – employees, most customers, suppliers and shareholders

Involuntary stakeholders

Those who become stakeholders involuntarily – local communities, neighbours, the natural world, future generations

Classification 7

Legitimate stakeholders

Those who have valid claims upon the organisation

Illegitimate stakeholders

Those whose claims upon the organization are not valid

Classification 8

Recognized stakeholders

Those whose interests and views managers consider when deciding upon strategy

Unrecognized stakeholders

Those whose claims aren’t taken into account in the organisation’s decision making – likely to be very much the same as illegitimate stakeholders

Classification 9

Known stakeholders

Those whose existence is known o the organisation

Unknown stakeholders

Those whose existence is unknown to the organisation (undiscovered species, communities in proximity to overseas suppliers)

Corporate Citizenship

Corporate citizenship suggests that companies have responsibilities which go beyond its direct stakeholder relationships. It is linked to the idea of corporate accountability which suggests that organisations are answerable for the wider consequences of their actions on society. This goes well beyond the provision of charitable donations to the local community and extends to the management of environmental and social issues.

The implication of this idea is that when setting objectives and strategy organizations should consider the impact of their decisions on society as a whole, and look for ways in which they can influence and improve the community, for example by local investments and local initiatives.

The demands for corporations to be more accountable as members of society is a response to the recognition that companies have power and the view that they can affect society in a number of different ways, for example:

• Companies create wealth and jobs, and have a direct impact on the well-being of their employees
• The products and services of companies have the potential to improve or damage society.
• Companies have a responsibility to consider not only their own action but those of their suppliers and customers.
• Countries struggle with unemployment and yet the decision to locate and support societies is often not theirs but that of corporations.
• Liberalisation and deregulation of markets increase market power and restrict the ability of governments to intervene.
• Privatisation of many previous state monopolies places greater power in the corporate hand.
• Complex cross-border legal agreement is very difficult and so corporations are encouraged to self-regulate.
• Governments have failed to address the risks and consequences of rapidly changing modern economies and the availability of more and more products and services – companies are seen to have the power to act where governments have failed in their duty.

Deontology and Consequentialism

Deontological ethics

The deontological perspective can be broadly understood in terms of ‘means’ being more important than ‘ends’. It is broadly based on Kantian (categorical imperative) ethics. The rightness of an action is judged by its intrinsic virtue and thus morality is seen as absolute and not situational. An action is right if it would, by its general adoption, be of net benefit to society. Lying, for example, is deemed to be ethically wrong because lying, if adopted in all situations, would lead to the deterioration of society.

Consequentialist ethics

The consequentialist or teleological perspective is based on utilitarian or egoist ethics meaning that the rightness of an action is judged by the quality of the outcome.

From the egoist perspective, the quality of the outcome refers to the individual (“what is best for me?”). Utilitarianism measures the quality of outcome in terms of the greatest happiness of the greatest number (“what is best for the majority?”). Consequentialist ethics are therefore situational and contingent, and not absolute.

Three Kohlberg levels

At the preconventional level of moral reasoning, morality is conceived of in terms of rewards, punishments and instrumental motivations. Those demonstrating intolerance of regulations in preference for self-serving motives are typical preconventionalists.

At the conventional level, morality is understood in terms of ompliance with either or both of peer pressure/social expectations or regulations, laws and guidelines. A high degree of compliance is assumed to be a highly moral position.

At the postconventional level, morality is understood in terms of conformance with ‘higher’ or ‘universal’ ethical principles. Postconventional assumptions often challenge existing regulatory regimes and social norms and so postconventional behaviour is often costly in personal terms.

Level 1: Preconventional level

Stage/Plane 1: Punishment-obedience orientation

Stage/Plane 2: Instrumental relativist orientation

Level 2: Conventional level

Stage/Plane 3: Good boy-nice girl orientation

Stage/Plane 4: Law and order orientation

Level 3: Postconventional level

Stage/Plane 5: Social contract orientation

Stage/Plane 6: Universal ethical principle orientation

Absolutism and relativism

An absolutist ethical stance is when it is assumed that there is an unchanging set of ethical principles which should always be obeyed regardless of the situation or any other pressures or factors that may be present. Typically described in universalist ways, absolutist ethics tends to be expressed in terms such as ‘it is always right to . . . ’, ‘it is never right to . . . ’ or ‘it is always wrong to . . . ’

Relativist ethical assumptions are those that assume that real ethical situations are more complicated than absolutists allow for. It is the view that there are a variety of acceptable ethical beliefs and practices and that the right and most appropriate belief depends on the situation. The best outcome is arrived at by examining the situation and making ethical assessments based on the best outcomes in that situation.

Code of ethics and strategic positioning

Strategic positioning is about the way that a whole company is placed in its environment as opposed to the operational level, which considers the individual parts of the organisation.

Ethical reputation and practice can be a key part of environmental ‘fit’, along with other strategic issues such as generic strategy, quality and product range.

The ‘fit’ enables the company to more fully meet the expectations, needs and demands of its relevant stakeholders. The ‘quality’ of the strategic ‘fit’ is one of the major determinants of business performance and so is vital to the success of the business.

The company can carefully manoeuvre itself to have the strategic position of being the highest ethical performer locally and can win orders on that basis. The strategic position as being the ethical ‘benchmark’ in its industry locally is a competitive advantage.

The ethical principles are highly internalised in the company generally, which is essential for effective strategic implementation.

Contents of a corporate code of ethics

The typical contents of a corporate code of ethics are as follows:

1. Values of the company. This might include notes on the strategic purpose of the organisation and any underlying beliefs, values, assumptions or principles. Values may be expressed in terms of social and environmental perspectives, and expressions of intent regarding compliance with best practice, etc.

2. Shareholders and suppliers of finance. In particular, how the company views the importance of sources of finances, how it intends to communicate with them and any indications of how they will be treated in terms of transparency, truthfulness and honesty.

3. Employees. Policies towards employees, which might include equal opportunities policies, training and development, recruitment, retention and removal of staff. In the case of HPC, the policy on child labour will be covered by this part of the code of ethics.

4. Customers. How the company intends to treat its customers, typically in terms of policy of customer satisfaction, product mix, product quality, product information and complaints procedure.

5. Supply chain/suppliers. This is becoming an increasingly important part of ethical behaviour as stakeholders scrutinise where and how companies source their products (e.g. farming practice, GM foods, fair trade issues, etc). Ethical policy on supply chain might include undertakings to buy from certain approved suppliers only, to buy only above a certain level of quality, to engage constructively with suppliers (e.g. for product development purposes) or not to buy from suppliers who do not meet with their own ethical standards.

6. Community and wider society. This section concerns the manner in which the company aims to relate to a range of stakeholders with whom it does not have a direct economic relationship (e.g. neighbours, opinion formers, pressure groups, etc). It might include undertakings on consultation, ‘listening’, seeking consent, partnership arrangements (e.g. in community relationships with local schools) and similar.

Stakeholders

Definition

There are a number of definitions of a stakeholder. Freeman (1984), for example, defined a stakeholder in terms of any organisation or person that can affect or be affected by the policies or activities of an entity. Hence stakeholding can result from one of two directions: being able to affect and possibly influence an organisation or, conversely, being influenced by it.

Any engagement with an organisation in whom a stake is held may be voluntary or involuntary in nature.

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Importance of identifying all stakeholders

Knowledge of the stakeholders is important for a number of reasons. This will involve surveying stakeholders that can either affect or be affected by the activities of the organisation. In some cases, stakeholders will be bi-directional in their stakeholding (claim) upon the organistion.

1. Stakeholder identification is necessary to gain an understanding of the sources of risks and disruption. Some external stakeholders, such as the local government authority, offer a risk to the project and knowledge of the nature of the claim made upon the organisation by the stakeholder will be important in risk assessment.

2. Stakeholder identification is important in terms of assessing the sources of influence over the objectives and outcomes for the project (such as identified in the Mendelow model). In strategic analysis, stakeholder influence is assessed in terms of each stakeholder’s power and interest, with higher power and higher interest combining to generate the highest influence. 

3. It is necessary in order to identify areas of conflict and tension between stakeholders, especially relevant when it is likely that stakeholders of influence will be in disagreement over the outcomes for the project. 

4. There is a moral case for knowledge of how decisions affect people both inside the organisation or externally.

Corporate Code of Ethics

Purposes

A corporate code of ethics (sometimes contrasted with a professional code) has five general purposes.

The first is communicating the organisation’s values into a succinct and sometimes memorable form. 

This might involve defining the strategic purposes of the organisation and how this might affect ethical attitudes and policies.

Second, the code serves to identify the key stakeholders and the promotion of stakeholder rights and responsibilities. 

This may involve deciding on the legitimacy of the claims of certain stakeholders and how the company will behave towards them.

Third, a code of ethics is a means of conveying these values to stakeholders.

It is important for internal and external stakeholders to understand the ethical positions of a company so they know what to expect in a given situation and to know how the company will behave. This is especially important with powerful stakeholders, perhaps including customers, suppliers and employees.

Fourth, a code of ethics serves to influence and control individuals’ behaviour, especially internal stakeholders such as management and employees. 

The values conveyed by the code are intended to provide for an agreed outcome whenever a given situation arises and to underpin a way of conducting organisational life in accordance with those values.

Fifth, a code of ethics can be an important part of an organisation’s strategic positioning. 

In the same way that an organisation’s reputation as an employer, supplier, etc. can be a part of strategic positioning, so can its ethical reputation in society. Its code of ethics is a prominent way of articulating and underpinning that.

AAA Model of Ethical Decision Making

The American Accounting Association model is intended to provide a framework to assist in ethical decision making. It operates by asking a set of seven questions, the ultimate outcome of which determines the decision to be taken.

The questions are:

Step 1, establishing the facts of the case
While perhaps obvious, this step means that when the decision-making process starts, there is no ambiguity about what is under consideration.


Step 2, identify the ethical issues in the case
This involves examining the facts of the case and sking what ethical issues are at stake.


Step 3, Identification of the norms, principles and values related to the case
This involves placing the decision in its social, ethical and in some cases, professional behaviour context. Professional codes of ethics or the social expectations of the profession are taken to be the norms, principles,a nd values. For example, if stock market rules are involved in the decision, then these will be a relevant factor to consider in this step.

Step 4, identify each alternative course of action
This involves stating each one, without consideration of the norms, principles, and value identified in step 3, in order to ensure that each outcome is considered, however appropriate or inappropriate that outcome might be.


Step 5, the norms, principles and values identified in Step 3 are overlaid on to the options identified in Step 4
When this is done, it should be possible to see which options scored with the norms and which do not.


Step 6, to consider the consequences of the outcomes
Again, the purpose of model is to make the implications of each outcome unambiguous so that the final decision is made in full knowledge and recognition of each one.


Step 7, the decision is made.

Environmental accounting

This is the development of an accounting system to support the integration of environmental performance measures into the core financial processes of the business. It will enable the business to track internal environmentally significant expenditure.


The benefits of environmental accounting are that it:

1. can use the metrics produced from an environmental audit and incorporate these into an environmental report,
2. can enable the business to make decisions based on costs of the full environmental impact, and hence utilise resources efficiently and effectively, and so generate cost savings,
3. demonstrates the business’ commitment to environmental matters, and hence may calm the concerns of the campaigners, and
4. assists in the publication of environmental accounting disclosures in corporate documents such as the annual and CSR reports.

The normative view of stakeholders

The normative view of stakeholder theory centres around the notion of civil duties which are important in maintaining and increasing overall good in society. It is based upon the concept that we each have a moral duty to each other in respect of taking into account each others’ concerns and opinions. Not to do so will result in the atrophy of social cohesion and will ultimately lead to everybody being worse off morally and possibly economically.

Extending this argument to stakeholder theory, the normative view argues that organisations should accommodate stakeholder concerns not because of what the organisation can instrumentally ‘get out of it’ for its own profit, but because by doing so the organisation observes its moral duty to each stakeholder.

The normative view sees stakeholders as ends in themselves and not just instrumental to the achievement of other ends.

The instrumental view of stakeholders

The instrumental view of stakeholder relations is that organisations take stakeholder opinions into account only insofar as they are consistent with other, more important, economic objectives (e.g. profit maximisation, gaining market share, compliance with a corporate governance standard).

Accordingly, it may be that a business acknowledges stakeholders only because acquiescence to stakeholder opinion is the best way of achieving other business objectives. If the loyalty or commitment of an important primary or active stakeholder group is threatened, it is likely that the organisation will recognise the group’s claim because not to do so would threaten to reduce its economic performance and profitability.



It is therefore said that stakeholders are used instrumentally in the pursuit of other objectives.

Corporate social responsibility (CSR)

CSR refers to organisations considering and managing their impact on a variety of stakeholders. It is widely accepted that organisations have responsibilities beyond simply making a profit; their actions can affect those outside the organisation and  hence they should take responsibility for that behaviour. Additionally, the concept  of ‘enlightened self interest’ suggests that organisations which act in a socially responsible manner may be rewarded with increased customers.

Carroll devised a four-part model of CSR: economic responsibility, legal  responsibility, ethical responsibility and philanthropic responsibility. True CSR  requires satisfying all four parts consecutively.

Considering Carroll’s model in more detail:

Economic responsibilities relate to the ability of the organisation to stay in  business and therefore satisfy its stakeholders, such as providing a return to  shareholders and products at a fair price to customers.

The economic responsibility must be achieved in order to attain higher level responsibilities.

Legal responsibility implies that an organisation will follow the laws of the  jurisdiction in which it is based as well as any internal moral views or objectives that the organisation has set. Not complying with the law results in lack of social  responsibility, and has been demonstrated by organisations taking part in illegal  activities such as price-fixing or anti-competitive behaviour.

Legal responsibilities may therefore limit economic responsibilities by providing  some social stance to organisations.

Ethical responsibilities relate to what is expected by society from organisations,  i.e. to doing what is seen to be right compared with doing what is simply legal. At  this level organisations start to act in the better interests of society by reducing  carbon emissions, or avoiding activities that would result in damaging  environmental consequences.

Ethical responsibilities are therefore higher than both economic and legal  responsibilities.

Philanthropic responsibilities generally concern actions desired of organisations  rather than those required by organisations. These may include charitable  donations and community support programmes. Activities are carried out more  because the organisation believes it is the correct thing to do rather than because it  must.

Definition of CSR

The pressure group Business for Social Responsibility defines corporate and social responsibility (CSR) as 'it generally refers to business decision making linked to ethical values, compliance with legal requirements and respect for people, communities and the environment'.

Carroll provided the following definition of CSR:

‘CSR encompasses the economic, legal, ethical and philanthropic expectations placed on organisations by society at a given point in time’.

In many companies, therefore, CSR is viewed as having policies in place that support the CSR objectives of the organisation. The company has a statement that it will, for example, trade ethically, and has policies in place to ensure that this actually happens.

Gray, Owen and Adams viewpoints of social responsibility

Pristine Capitalists

At the extreme stockholder-end is the Pristine Capitalists position. The value underpinning this position is shareholder wealth maximization, and implicit within it is the view that anything that reduces potential shareholder wealth is effectively theft from shareholders.

Expedients

Economic system do generate some excesses, therefore businesses have to accept some (limited) social legislation and moral requirements if such behaviour is in the business’s economic interests.

Social Contractarians

Organizations should behave in a way broadly in conformance with the ethical norms in society because there is effectively a contract or agreement between the organizations in power and those who are affected by the exercise of this power. A business effectively enjoys a licence to operate, however this licence will only continue to be granted by society if the business’s actions deserve it. A business may therefore have to deliver benefits (or avoid causing harm) to society in general. It may also be responsible for delivering benefits to the specific groups from whom it derives its power (such as consumers or employees).

Social Ecologists

Social ecologists go a stage further than the social contractarians in recognizing that (regardless of the views of society), business has a social and environmental footprint and therefore bear some responsibilities in minimizing the footprint it creates. 

Socialists

Socialists are those who see the actions of business as those of a capitalist class, subjugating, manipulations and even oppressing other classes of people. Business is a concentrator of wealth in society (not a redistributors) and so the task of business, social and environment responsibility is very large – much more so than merely adopting token policies (as socialists would see them), that still maintain the supremacy of the capitalist classes. 

Radical feminists 

Economic and social systems privilege masculine qualities such as aggression, conflict and competition over feminine values such as cooperation and reflection, developing corporate social responsibility in the existing masculine framework won’t work. A fundamental re-adjustment is required in the culture and structure of society with potentially far-reaching implications for accountability relationships. Society needs to emphasise qualities traditionally seen as feminine, such as equality, dialogue, compassion and fairness

Deep ecologists

Human beings have no greater rights to resources or life than other species and do not have the rights to subjugate social and environmental systems. Economic systems that trade off threats to the existence of species against economic objectives are immoral. Arguably businesses cannot be trusted to maintain something as important as the environment. Existing economic systems are beyond repair as they are based on the wrong values, privileging humans over non-humans. A full recognition of all stakeholders would mean business had to be conducted in a completely different way. This viewpoint is connected with ides on sustainability.

Explain ‘Sustainability’ 

Sustainability is the ability of the business to continue to exist and conduct operations with no effects on the environment that cannot be offset or made good in some other way. The best working definition is that given by the Gro Harlem Brundtland, the former Norwegian prime minister in the Brundtland Report (1987) as activity that, ‘meets the needs of the present without compromising the ability of future generations to meet their own needs.’ 

Importantly, it refers to both the inputs and outputs of any organisational process.

• Inputs (resources) must only be consumed at a rate at which they can be reproduced, offset or in some other way not irreplaceably depleted. 
• Outputs (such as waste and products) must not pollute the environment at a rate greater than can be cleared or offset. 

Recycling is one way to reduce the net impact of product impact on the environment.

The business activities must take into consideration the carbon emissions, other pollution to water, air and local environment, and should use strategies to neutralise these impacts by engaging in environmental practices that will replenish the used resources and eliminate harmful effects of pollution.

A number of reporting frameworks have been developed to help in accounting for sustainability including the notion of triple-bottom-line accounting and the Global Reporting Initiative (GRI). Both of these attempt to measure the social and environmental impacts of a business in addition to its normal accounting.

Environmental and Social Audit

• Environmental and Social Audits are designed to ascertain whether the organization is complying with codes of best practice or internal guidelines, and is fulfilling the wider requirements of being a good corporate citize
• It is a Systematic, documented, periodic and objective evaluation of how well an entity, its management and equipment are performing, with the aim of helping to safeguard the environment by facilitating management control of environmental practices and assessing compliance and entity policies and external regulations
• It is also used for auditing the truth and fairness of an environmental report rather than the organization itself, the same is true of social auditing.

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Stages in an Environmental Audit 

Environmental auditing contains three stages.

1. The first stage is agreeing and establishing the metrics involved and deciding on what environmental measures will be included in the audit. This selection is important because it will determine what will be measured against, how costly the audit will be and how likely it is that the company will be criticised for ‘window dressing’ or ‘greenwashing’. 

2. The second stage is measuring actual performance against the metrics set in the first stage. The means of measurement will usually depend upon the metric being measured. Whilst many items will be capable of numerical and/or financial measurement (such as energy consumption or waste production), others, such as public perception of employee environmental awareness, will be less so. Given the board’s stated aim of providing a robust audit and its need to demonstrate compliance, this stage is clearly of great importance. 

3. The third stage is reporting the levels of compliance or variances. The issue here is how to report the information and how widely to distribute the report. The board’s stated aim is to provide as much information as possible ‘in the interests of transparency’. This would tend to signal the publication of a public document (rather than just a report for the board) although there will be issues on how to produce the report and at what level to structure it. The information demands of local communities and investors may well differ in their appetite for detail and the items being disclosed.