Q1.

What is the ethical principle that underpins risk management concept and how does a listed
company’s board manage enterprise risk? Explain with the help of an example from the annual report of
any ONE listed co (from NSE top 500 companies by market capitalization) the key initiative taken by the
selected company in FY2021-22 to manage ONE financial risk and ONE non-financial risk.

Answer:

The ethical principle that underpins risk management is the principle of accountability, which involves
taking responsibility for one's actions and decisions, as well as ensuring that risks are identified,
assessed, and mitigated in a timely and effective manner. This principle requires organizations to be
transparent and accountable to their stakeholders, including shareholders, customers, employees, and
regulators.

Listed companies' boards manage enterprise risk by establishing a formal risk management framework
that identifies, assesses, and prioritizes risks based on their potential impact and likelihood. The board
oversees the implementation of risk mitigation strategies and regularly monitors and reports on the
organization's risk profile and performance to stakeholders. As an example, let's consider Reliance
Industries Limited, one of the top 10 companies in terms of market capitalization on the National Stock
Exchange (NSE) in India. In its Annual Report for FY2021-22, the company has highlighted its approach to
managing financial and non-financial risks.

Financial Risk Management:

Reliance Industries Limited (RIL) manages its financial risks through a comprehensive risk management
framework that includes monitoring and managing various financial risks such as credit risk, liquidity
risk, and interest rate risk. The company has also implemented a robust treasury management system
that enables real-time monitoring and management of its cash and liquidity positions.

As a key initiative in FY2021-22, RIL has established a Debt Management Committee (DMC) to oversee
the company's overall debt portfolio, including refinancing, restructuring, and repayment of debt. The
DMC has also been tasked with identifying and managing potential financial risks arising from the
company's debt portfolio.

Non-Financial Risk Management:

RIL manages its non-financial risks through a comprehensive risk management framework that includes
identifying and assessing various operational, strategic, and reputational risks. The company has
established a Risk Management Committee (RMC) to oversee the implementation of its risk
management framework and ensure that risks are identified and addressed in a timely and effective
manner.
As a key initiative in FY2021-22, RIL has implemented a Business Continuity Management (BCM)
framework to ensure that critical business functions and processes can continue uninterrupted in the
event of a disruption or crisis. The BCM framework includes regular risk assessments, contingency
planning, and crisis management training and drills to ensure that the company is prepared to manage
any potential risks that may arise.

Q2. From the Sustainability Report (FY2021-22 or 2022-23) OR Business Responsibility & Sustainability
Report (FY2021-22 or 2022-23 Annual report) of any one listed company from across the globe, select
any ONE Carbon Emission reduction initiative adopted and practiced by the company. Explain the
initiative in your own words and analyse if it is effective/outcome driven or not, if yes provide
quantitative proof for the same.

Answer: I have selected Unilever, a multinational consumer goods company, for this analysis. In their
Sustainable Living Report 2021, Unilever has highlighted their carbon reduction initiative, which is called
the "Climate and Forests Programme."The Climate and Forests Programme aims to reduce the carbon
emissions associated with Unilever's supply chain and also protect and restore forests, which are crucial
carbon sinks. The initiative involves working with suppliers, NGOs, and governments to develop
sustainable land-use practices and promote forest conservation.Unilever has committed to achieving
net-zero emissions from its products by 2039 and has set an interim target of reducing the carbon
footprint of its products by 50% by 2030. The Climate and Forests Programme is a key part of this
commitment.

In terms of effectiveness, Unilever has reported that the Climate and Forests Programme has delivered
significant results. Since the launch of the initiative in 2019, Unilever has achieved a 35% reduction in
greenhouse gas emissions from its palm oil supply chain. The company has also implemented
sustainable sourcing practices for other commodities, such as soy, beef, and paper, which has helped to
reduce the carbon footprint of these products. Additionally, Unilever has been recognized for its
leadership in sustainability and climate action. In 2021, the company was ranked first in the Dow Jones
Sustainability Index for the second year running and was also recognized as a leader in the CDP A List for
Climate Change.

Overall, Unilever's Climate and Forests Programme appears to be an effective and outcome-driven
initiative that is helping to reduce carbon emissions and protect forests. The quantitative proof provided
by the company indicates that the initiative is delivering significant results, and the company's
leadership in sustainability further supports the effectiveness of the initiative.

Q3. a.‘Professionals such as doctors, accountants and lawyers have a charter/framework of code of
conduct, duties and obligations that other people do not.’ Why is that so? Present your point of view
with its supporting arguments/reasons.
Answer: Professionals such as doctors, accountants, and lawyers have a charter/framework of code of
conduct, duties, and obligations that other people do not because they are entrusted with specialized
knowledge and skills that can significantly impact the well-being and interests of their clients or patients.
This trust and responsibility require professionals to maintain high standards of ethical behavior and
accountability, which are reflected in their codes of conduct and professional regulations.One of the
primary reasons for having a code of conduct and professional obligations is to ensure that professionals
uphold the trust placed in them by society. For instance, doctors are trusted to provide competent
medical care, accountants are trusted to maintain accurate financial records, and lawyers are trusted to
provide legal advice and representation. The codes of conduct for these professions are designed to
ensure that professionals act in the best interests of their clients and patients and maintain the highest
standards of professionalism, integrity, and accountability.

Another reason for having a code of conduct and professional obligations is to promote public safety
and welfare. Professionals are expected to possess specialized knowledge and skills that enable them to
perform their duties competently and safely. Their codes of conduct and professional obligations are
designed to ensure that they maintain the necessary skills and knowledge, uphold safety standards, and
avoid any practices that could harm the public or their clients/patients. In addition, codes of conduct
and professional obligations also serve as a means of self-regulation for the profession. By setting
standards for ethical behavior and professional conduct, professionals can maintain the integrity and
reputation of their profession. This self-regulation ensures that professionals adhere to high standards
and hold themselves accountable for their actions and decisions.

In conclusion, the codes of conduct and professional obligations that professionals such as doctors,
accountants, and lawyers have are essential for maintaining public trust, promoting public safety and
welfare, and self-regulation of the profession. These codes and obligations are based on the premise
that professionals have specialized knowledge and skills and are entrusted with significant
responsibilities, which require them to act in the best interests of their clients/patients and uphold high
standards of professionalism and integrity.

b. Choose any one ethical principle from the below list and with the help of a day-to-day work place
process or practice showcase how your company/ any company delivers/ does not deliver on the chosen
ethical principle. List of ethical principles: Transparency, Fairness, Responsiveness, Dignity.

Answer: I have chosen fairness as the ethical principle for this question. Fairness is the principle of
treating people equitably, without discrimination or bias, and ensuring that everyone has an equal
opportunity to succeed.

In a workplace setting, fairness can be demonstrated through the recruitment and selection process.
When recruiting new employees,companies should ensure that the process is fair and transparent, and
that all candidates have an equal opportunity to be considered for the position. This can be achieved
through several practices, such as:

 Advertising job vacancies widely and inclusively to attract a diverse pool of candidates
 Ensuring that job descriptions and person specifications are clear and objective
 Conducting interviews in a structured and consistent manner, using the same questions and
criteria for all candidates
 Providing equal access to training and development opportunities for all employees, regardless
of their background or experience.

Unfortunately, some companies fail to deliver on the principle of fairness in their recruitment and
selection process. This can happen in several ways, such as:

 Engaging in discriminatory practices, such as bias against certain ethnic or racial groups, gender,
or age.
 Failing to provide reasonable accommodations for applicants with disabilities or special needs.
 Ignoring the qualifications and experience of certain candidates in favor of others due to
personal relationships or biases.

For instance, a company may favor hiring candidates who were referred by current employees or who
have personal connections to the hiring manager, rather than considering all qualified applicants
equally. This practice can undermine fairness and transparency in the recruitment process, and can
result in a less diverse and less qualified workforce.

Overall, fairness is a critical ethical principle that companies should strive to uphold in all areas of their
operations, including the recruitment and selection process. By promoting fairness, companies can build
a more diverse, inclusive, and equitable workplace, which can benefit both employees and the business
as a whole.