Research Paper on Tesco Company, Its Stakeholders, Their Corporate Governance, Environmental and Social Review

Paper Type:  Research paper
Pages:  7
Wordcount:  1824 Words
Date:  2022-12-19


Analyzing finance with a long term view, considering the long term strategic goals of an enterprise. Success of any company squarely lies with its ability to adequately address the needs of its stakeholders. Stakeholders also need to do their due diligence before investing in a given company, making an informed decision lies on financial ratios. For this paper, we will do analysis of Tesco Company, its stakeholders, their corporate governance, environmental and social review. In addition, some financial ratios for the company will also be analyzed.

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Definition of the Term ‘Stakeholder’ and Identifies Three Types of Stakeholder of Tesco

Harrison & van der Laan Smith, (2015, p. 940) defines Stakeholder as any individual, social group, organization or humanity in general that has a pale in the corporate. Consequently, for Tesco like any other business, investors can either be outward and internal to the industry. The concept of stakeholder lacks both ethical and moral implication for the governance of the business. If a business happens only to have a duty to its shareholders, then the business may lack any moral obligation to any other organization, person or society. Tesco has several stakeholders, but for this assignment, only three will be mentioned.


Chetthamrongchai, P., (2018, p. 18) feels that consumers form some of the most critical stakeholders because they determine the company's profitability, its survival, and fair share. They take part in business by utilizing merchandises and services that are availed to the market and hence recompense the value for the goods and services from which the firm makes profits. As one of the biggest retailer, Tesco clients comprise governments, institutions, and kin. Thus, Tesco ensures that it leads to being the customer's champions by prioritizing on them and assuming small engagements that leave a transformation in the lives of customers.

The customers to Tesco as investors are more concerned in long term profitability and survival of the business so that it may carry on offering goods and services that are important to the survival of their clienteles. They are also concerned with the sustained accomplishment of the enterprise because they can profit from clients allegiance plans and also the Tesco's social responsibility undertakings which are beneficial to the larger community. Customers want quality goods at a relatively low cost. They would also wish to have a variety of products to choose from. All the clients wish to have all those things; therefore by Tesco offering them, they will attract more of customers because a word will be shared.


In any business, shareholders are at the forefront, because they are the business owners in other words. Shareholders represent institutions or persons who have financed their resources with the anticipation of earnings in terms of dividends, turnover sharing, and other possible expenditures (Herron, A., 2018, p. 108). As business proprietors, shareholders have their interests vested in numerous aspects of the entire enterprise. Core amid such features is the business' aptitude to carry on its operations and pay them gratuities which are plundered for their investments. Also, they would also be concerned in how their business is being run, through making sure that they institute a board of director and consent to the nomination of the CEO at the AGMs of the firm.

Corporate governance is also their area of interest for their business to ensure that both their investments and returns on such investments are well secured (Kukreja, G. and Gupta, S., 2016, p. 15). Thus, all the needs of the stakeholders need to be addressed adequately to achieve maximally as a company


At Tesco, traders are other core investors. They offer their portfolio to the business and anticipates to be compensated for their merchandise promptly by the contracted terms of engagements. They are much concerned with the capacity of the firm to resolve their bills promptly and also compensate the contracted amount as regards to the engagement contract. If a business does well, the suppliers can be timely paid, but if the vice versa happens suppliers may experience some delays in their payments, hence a sign to them to stop their suppliers to the business. Up to this level, contractors are concerned with the business's main monetary metrics, projections, point of view, and statements as they choose on whether to supplier their stock on praise or not. The enterprise has to guarantee that issues related to suppliers like payments are dealt with judiciously for a smooth business operation which profoundly dependent on credit supplies.

Analyses of Environmental and Social Review and the Corporate Governance Report

Tesco social and environmental assessment is hinged on the standards of the company, which guarantees services to the colleagues, customers and creating the public and society at large a superior place from one day to the other through their jingle 'every little help makes a big difference'. The main goal of the social and environmental assessment is to look at the business's objectives to frequently progress on its services to clients and handle the environmental and social tests that directly impact the peoples in which Tesco does business. On basis of small things accomplished daily, Tesco has confidence that, such things will lastly pay to extensive international ingenuities that the firm is intricate in like poverty, food, sustainable and fresh supply chain.Tesco's environmental and social review addresses areas like environmental conservations, empowerment of staffs, food security, health and reverence for Human rights. The society and clients in which they operate, form some of the core stakeholders that are influenced by the firm's environmental and social review. With multi-initiatives in place, Tesco guarantees its continued support of its labor force so that it can be operative in service delivery to their clients (Schanes, Dobernig and Gozet, 2018, p. 982). Through worker empowerment and regular training, staffs become more inspired and thus enthusiastic to go a second mile to make sure that clients' requirements are satisfactorily met. The health of its workforce, customers and wider community are another areas of concern for Tesco. This is achieved through a partnership with known experts like British heart foundation and Diabetes (UK Pulker, Trapp, Scott & Pollard, 2018, p. 121). Working in conjunction with Tesco's capacity to reach the grassroots population, such health charities work to ensure a healthy community.

Tesco has also strived through several human rights assertions like the International labor organization core conventions, UN Universal Declaration of Human rights among others are all efforts geared towards upholding the human right. The company makes all efforts to ensure clients purchase inordinate products that are made in a secure and liable atmosphere. Over their approach which is communally responsible, Tesco is functioning towards the lessening of food wastage by warranting that utmost crop's portions can be re-utilized (Notarnicola, Sala, Anton, McLaren, Saouter & Sonesson, U., 2017, p. 408). Tesco is also at work on a more operative projecting approach that guarantees that there is not as much of wastage in that what is grown is transported to the market.

Via all these inventiveness, the firm in business with other enterprises has got a strategy which guarantees that the food that could have been consumed has not been disposed but rather given to charities who then distributes to the needful areas. In the interests of community and clients at large, the company is at the pole position in minimizing its carbon trail. As a great corporate citizen, Tesco has minimized on its air emission by approximately 1.7 % in the last single year and by over 40% in the last ten years (Liu, Wang & Su, 2016, p. 72). Such efforts towards social and environmental review are beneficial to owners over the long-term survival and profitability of the commercial via client sustenance.

Corporate Governance

Company's determinations to ensure exemplary corporate governance is hinged on the principle of the respectable corporate governance that pools together a correctly founded BOG, CEO, Audit committees and the involvement of shareholders through AGMs (Ismail, 2017). To enhance transparency and trust, the schedule of all the delegated undertakings and code of conducts for businesses are instituted.

At the helm of Tesco is the firm's corporate governance is the board of directors that encompasses both directors who are executives and non-executive. According to Okaily, J.A., Dixon, R. and Salama, A., (2019, p. 92) board members selection is made in such a way that each member is an expert in his sector. With that, the directors are in a position to provide irreplaceable leadership in the business strategy and operation. Board of the committee comes in as part of the board of directors, which encompasses all professional members of the board. The committees include; audit committee, remuneration committee and CSR committee among many others. For autonomy purpose, each board committee is expected to meet like four times yearly even in the nonattendance of the core board. They meet to discuss on issues affecting trade and contribute their inputs to guarantee that the firm is running in the most transparent and best way possible.

The above discussed corporate governance strategies though, Company information that they are more than enough ways I which owners are involved in business operations directly. Tesco also participates in round table deliberations, summons to institutional stakeholders to determine either full or half year financial status of a company. According to Riboldazzi, (2016, p. 1) members of the committee also hosts shareholders in meetings for discussions on business decisions and strategies. Additionally, the input of retail shareholders is also considered and valued during Tesco's AGM, whereby they ratify the decisions of its committee or the ones for the board.

The audit function at the company is paramount in guaranteeing that there are enough checks and balances in place. The committee on audit carries out several tasks, aimed at guaranteeing that Tesco has in place a comprehensive financial reporting procedure. Therefore, the audit committee duties relate to the hiring of external auditors and giving them autonomy to discharge their mandate like internal control and risk management, review of Tesco financial statements among other tasks. External auditors like Plc and Deloitte play a critical role in Tesco corporate governance. For instance, they autonomously review the operations of the business and financial outcomes to ensure that they reflect the exact and precise view of Tesco's financial position and performance. With this external oversight role, it gives some reassurance to the investors that management is devotedly undertaking its roles in managing the business for the good of the stakeholders.

Therefore, the corporate governance report has shown that Tesco actions regarding preservation of the investor's interest and the wider goal of the clients and the community in general. With such elaborate and nice corporate governance approaches as used by Tesco, they ensure that the investor's assets are secure, which safeguards the welfare of the investor and other stake orders in the business. Nice corporate governance practices impact directly on the shareholder's profitability, value and long-run business continuity. Also, business is in a position to continue offering its products and services to the clients because of such governance (Adewuyi, A.W., 2016, p. 45). In safeguarding...

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Research Paper on Tesco Company, Its Stakeholders, Their Corporate Governance, Environmental and Social Review. (2022, Dec 19). Retrieved from

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