PART A - CASE STUDY QUESTION

You are required to write a report in which you:

1. Identify the governance issues raised by the Company A case study (see below) AND

2. Make recommendations for improving the company's governance arrangements AND

3. Identify any potential breaches of the general duties of directors contained in the Companies Act 2006.

Please also note the following:

• You should support your report with references to the UK Corporate Governance Code 2018 (the 2018 Code) and any other relevant principles, codes, rules and best practice guidance, e.g., the 2018 Guidance on Board Effectiveness (Guidance). Your attention should largely focus on the 2018 Code.

• The word limit is 1,500 which excludes your bibliography/references list and the text used to provide citations and references in your footnotes (should you choose to use footnotes). You need to write concisely! Tables, charts and diagrams can be included in your report.

• The Marking Grid is supported by a Case Study Additional Assessment Guidance specific marking guidance for this assessment. The Case
Study Additional Assessment Guidance, which is above, will help you understand how your case study will be marked and you should consult it regularly because it will help you to assess the quality of your work and to improve it.

COMPANY A CASE STUDY
Aston Oil & Gas ("AOG") is a UK-based oil & gas company which has made huge profits from the ongoing energy crisis which has resulted from the imposition of sanctions on Russia in response to the invasion of Ukraine.

AOG has made record level earnings since the Russian invasion of Ukraine (24 February 2022) and will have to pay hundreds of millions in pounds to the UK Treasury in the years to come as its customers suffer unprecedented economic hardship as they face increased oil & gas prices.

The UK Government has imposed a windfall tax on AOG's earnings in the form of a 25% Energy Profits Levy to apply to profits made by companies from extracting UK oil and gas. The Treasury expects it to raise about £5bn in its first year. The Energy Profits was accompanied by a measure that allows energy companies to apply for tax savings worth 91p of every £1 invested in fossil fuel extraction in the UK.

In the past couple of years, AOG has received millions in decommissioning tax rebates when AOG ends drilling in the North Sea which has given the company heavy rebates on its liabilities in recent years leading to some periods where it has effectively paid no tax in the UK.

While decommissioning rebates are correcting a tax positive position where oil firms overpaid during the decades of production on UK oil fields, this is in reality a cashflow issue and not a net loss for the Treasury as they were overpaid by AOG years ago.

You are a leading expert on environment, social and governance issues. The board has asked you to prepare a report critically evaluating whether bringing a lawsuit against the UK Treasury challenging the Energy Profits Levy on behalf of AOG would be consistent with the board's duty to promote the success of the company under Companies Act 2006 s. 172. The board is particularly worried that if the lawsuit is successful, AOG's most significant stakeholder, the UK general public, would be harmed although there would be considerable financial benefit to the shareholders?

In making your recommendation, consider the UK Corporate Governance Code 2018 and relevant directors' duties in law.

PART B - ESSAY QUESTION

This part provides you with the opportunity to undertake independent research and to consider critically the operation of the UK corporate governance framework.

The word limit is 1,500 which excludes your bibliography/references list and the text used to provide citations and references in your footnotes (should you choose to use footnotes).

You MUST answer the following question:

In July 2022, the Financial Reporting Council (FRC) published a Position Paper entitled Restoring Trust in Audit and Corporate Governance in which it set forth how the FRC will support the Government's reforms as its transitions into the Audit, Reporting and Governance Authority (ARGA).

Critically assess the recommendations made by the FRC in the Position Paper with respect to the transition to ARGA and evaluate whether the specific reforms to be made to existing corporate governance codes, standards and guidance will achieve these results.