BOARDROOM DYNAMICS AUGUST 2022 PAST PAPER

TUESDAY: 2 August 2022. Afternoon paper. Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.

QUESTION ONE

MAWRAZO ENTERPRISES LIMITED (MEL)

Mawrazo Enterprises Limited (MEL) is a Fintech company that was established in Kenya over fifteen years ago.
Headquartered in Nairobi, MEL has opened branches in over thirty five African countries. According to its recently
launched five year strategic plan, two additional branches of MEL will be opened each year; one in Europe and the other one in North America within the next four years. The company’s services are available across the globe and are
interlinked with some of the major banks and other financial service providers.

The board members have high synergy levels and closely complement each other. Half of them are founder members of the company including the chairman. Given that he is also the majority shareholder of the company, the chairman wields immense power. Apart from its Chief Executive Officer (CEO), no other board member is an executive director of the company.

To ensure the board of MEL is effective in discharging its roles, board evaluation is conducted at least once a year. Self- evaluation is undertaken annually to determine whether the board and its committees are functioning effectively. Due to these evaluations the board has consistently ensured that it is staffed and led appropriately; that board members, individually and collectively, are effective in fulfilling their obligations; and that reliable processes are in place to satisfy basic oversight requirements in areas such as strategy, risk management, financial reporting, performance measurement, compensation and succession planning. The board is highly digitised and it diligently upholds accountability, integrity and transparency to all investors. The board has a policy on board effectiveness measurement to keep it on course of its plans.

Recently, MEL has purposely focused on increasing the number of women in its board. Its medium-term plan focuses on 25 percent women representation in the board. The board believes it should conform to the industry and global trends of board diversity to avoid homogeneity thus its drive towards gender-based boardroom heterogeneity. The board believes in change and regularly undertakes training and development to be change ready.

Required:

1. Power is the ability to get things done.

Examine five types of power that the chairman of MEL may exercise. (10 marks)

2. Assess ten practices for board evaluation that MEL might have adopted. (10 marks)

3. Discuss five factors that could have contributed to board effectiveness at MEL. (10 marks)

4. MEL is considering gender-based boardroom heterogeneity.

Evaluate five effects that could result from the above action. (10 marks)

(Total: 40 marks)

QUESTION TWO

1. Assess five factors to consider when recruiting board members. (5 marks)

2. Examine five principles of group dynamics. (5 marks)

3. Determine five factors a board may consider while establishing their board size. (5 marks)

(Total: 15 marks)

QUESTION THREE

1. Identify five critical qualities of an effective board member. (5 marks)

2. Discuss three theories underpinning boardroom dynamics. (6 marks)

3. Explain how board evaluation is conducted in state corporations. (4 marks)

(Total: 15 marks)

QUESTION FOUR

1. Making decisions can be difficult.

With reference to this statement, assess the WRAP model for decision making. (4 marks)

2. Emotional intelligence is critical in stakeholder management.

Appraise five key elements in emotional intelligence. (5 marks)

3. Discuss organisational culture using Edgar Schein’s “Three Levels of Culture model”. (6 marks)

(Total: 15 marks)

QUESTION FIVE

1. Assess five factors to consider when designing an effective board meeting. (5 marks)

2. Identify five responsibilities of the corporate secretary in Boardroom dynamics. (5 marks)

3. Assess five types of board diversity. (5 marks)

(Total: 15 marks)

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