Performance Strategy Case Company P

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Activity_3: P P is a major quoted company that manufactures industrial chemicals. The company’s Board comprises a Chief Executive and five other executive directors, a non-executive chairman and four non-executive directors. Two of the non-executive directors have served on P’s board for five years. The company has a policy of asking non-executive directors to stand down after six years and so the Chairman has established a Nominations Committee to start the process of selecting replacements. Three replacements have been suggested to the Nominations Committee. The nominees are: • S, who is on the main board of C Pensions, an investment institution which owns 5% of P’s equity. S has worked for C Pensions for 20 years and has always worked in the management of the company’s investments, initially as an analyst and more recently as director in charge of investments. Before working for C Pensions, S was an investment analyst with an insurance company for 15 years. • T, who is a CIMA member, is about to retire from full-time work. T has had a varied career, completing the CIMA qualification while working as a trainee accountant with a food manufacturer, then as a management accountant with an engineering company and finally as a senior accountant with a commercial bank. T was promoted to the bank’s board and has been Finance Director for eight years. • U, who is a former politician. After a brief career as a journalist, U became a member of parliament at the age of 35. After spending 20 years as a politician, including several years as a government minister, U has recently retired from politics at the age of 55. U already holds two other non-executive directorships in companies that do not compete with and are not in any way connected to P. The Chairman of P is keen to recruit more non-executive directors as a matter of priority because the Remuneration
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