CAUTION: THIS IS A PRIVATE DOCUMENT

NOT TO BE SHARED ON ANY PUBLIC GROUP

Historic Places
SBL Pre-seen for MAR 2025

Analysis of Pre-Seen
By Sir Hasan Dossani @ VIFHE (+971555245672)
 KEY TOPICS COVERED

PRESEEN RELATED
1. How is charity org different? 26. Culture
2. SWOT 27. Board diversity
3. How to improve profitability 28. Continuous prof development
4. Pestel / Porter 5 forces 29. Implementing change
5. Strategic position / sources of 30. Integrated reporting
competitive advantage 31. Key qualities of good leadership
6. Two tier board
7. E / online business OTHER GENERAL TOPICS FOR KNOWLEDGE
8. E marketing 1. Project management
9. Big data analytics 2. Role of NEDs
10. Use of mobile apps
3. Harmon process
11. Cloud computing
12. Customer segmentation analysis
13. Risk appetite, risk assessment and risk
management
14. Pros and cons of risk committee
15. Stakeholders
16. Evaluate proposal / disruptive
technologies
17. Impact of data security breach
18. IT risks and security
19. Fall in growth of no. of members
20. Impact of demotivated staff
21. Staff training / talent mgt prog
22. Financial performance and projections
23. Sources of finance
24. Bribery
25. CSR
HOW IS A CHARITY ORG DIFFERENT FROM COMM ORG
Commercial Org Charitable Org

Purpose Maximize profit Wellbeing of society

Owners Shareholders Ther is no owner (company limited

by guarantee)

Profit distribution Distributed to shareholders Not distributed (i.e. used in the

(dividends) company)

Principal / agent Principal: Shareholders Principal: Members (as they

relationship appoint BOT)
Agent: BOD
Agent: Board of Trustees
Sub-agent: Board of Directors

Governance structure Board of directors (i.e. single tier Board of trustees & Board of
board) directors (i.e. two tier board)

Source of revenue Sales (from customers) Donations, membership fees and

some commercial activities such as
gift shops, cafes, etc. (from donors
and members)

Staffing Employees Employees and volunteers (to

reduce cost)

Competition With other companies With other charities

Marketing Same like a commercial org

Supplier Same like a commercial org

IT Same like a commercial org

Business strategies Same like a commercial org

Risk management, Same like a commercial org

audits, internal controls

Only terminologies are different – business strategies, thought process and

approach is the same
 SWOT ANALYSIS

Strengths Weaknesses
- Largest heritage charity having 350 sites over 300 - High site maintenance and conservation cost as HP
years old (strong competitive advantage) has 350 sites over 300 years old
- Significant saving in staff cost by using 20k - Does not provide formal training courses in
volunteers conservation of historic sites (loss of opportunity to
- Has two tier board structure (improves corporate earn extra income)
governance and increases stakeholders confidence) - Does not have big data analytics (no focused
- Has audit, nomination and remuneration marketing)
committees (good corporate governance practices) - Does not have corporate or wedding events at the site
- Has formal code of conduct (guides trustees, (loss of income opportunity)
executive directors, employees and volunteers) - Does not have shops in shopping areas (loss of income
- Focuses on school children (target younger opportunity and low market visibility)
generation to be future members or donors) - Does not sell its products online (geographical
- Some staff have worked for HP for a long time (good limitations)
staff motivation and retention and saves on - High dependency on volunteers as their time and
recruitment and training costs) attendance may not be regular and they may decide
- Many employees are prepared to accept lower to stop volunteering suddenly directly affecting site
salaries than commercial sector because of their operating hours and visitor experience
commitment to HP’s mission (good staff retention - Faces several risks but does not have risk committee
and lower staff cost) - Members have no say in appointment of Chairman
- Appointment of contractors and suppliers is and Executive Directors and their remuneration
centralized (better control and efficiencies) - Chairman has no fixed term
- Adequate IT systems meeting business requirements - Does not offer lifetime membership option
- Pays average salaries which may lead to high staff
- IT systems are fully compliant with data protection turnover causing operational disruption, high
regulations recruitment and training cost
- HP has a website which publicizes its activities and - Not using any apps
allows members to join - Not using virtual / augmented / online tours or AI
- People can pay online donation through the website - Income growth %age is falling since last 2 years with
so no geographical limitations almost no growth in 20x3
- Income sources (other than membership fee) are - Profit margins are falling since last 2 years as expense
more or less evenly distributed which is good is growing faster than income
- All income is exempt from tax - High dependency on membership fee (43%)
- High admin cost can lead to bad publicity and attract
- Profit surplus does not have to be paid to guarantors less donation and membership
hence it can be reinvested in business for expansions
- Membership growth %age is falling since last 2 years
with almost negligible growth in 20x3
- No. of visits growth %age is falling since last 2 years
Opportunities Threats
- Charities and their wholly owned commercial - Charities can suffer bad publicity and fall in donation
subsidiaries are exempt from tax income if admin costs are too high
- Some charities establish formal links with schools - Pollution and extreme weather conditions can
and universities deteriorate or cause significant damage to sites and
- Some charities provide formal training courses in antique objects
conservation of historic sites - High competition from non heritage charity sector
- Contact details of donors can be saved for focused may lead to fall in donation income
marketing campaigns to obtain recurring donations - Economic recession in Eardisia leading to fall in
disposable income of people
- Strict regulatory supervision and requirements by CSB
(audits, investigations, controls & risk management
reports)
 HOW TO IMPROVE PROFITABILITY
Revenue
- New products:
o Formal training courses in conservation of historic sites courses
o Corporate or wedding events at the site
o Shops in shopping areas
o Sell shop products online
o Offer life time membership
- Improve growth in number of members and visitors by investigating the reasons for slow down
- Collaboration with travel companies and hotels to increase number of visitors (e.g. Tourists)
- Marketing / Technology:
o Big data analytics
o Mobile apps
o Fund raising events
o Virtual / online tours / live streaming to increase reach and target younger generation
o AI tour guides (using headphones)
o Loyalty schemes
o Affiliate marketing (influencers, bloggers, celebrities)
o Corporate sponsorships
- Indulge in CSR activities to improve visibility and brand image
- Focus on environmental initiatives to attract green donors, members and visitors

Staffing / Cost efficiencies

- Staff training to improve productivity and efficiency
- Efficient use of volunteers / more volunteers
- Automation in various processes such as HR, finance, procurement, etc.
- Tighter budgetary / cost controls
- Long-term contracts with suppliers and contractors to avail discounts
- Better inventory management (shops and café)
- Focus more on digital marketing compared to physical marketing as digital marketing is cost
effective
 PESTEL
Political
FAVOURABLE as due to CSB regulator, donors will feel more confident in giving donations. Also the government as
exempted tax for charities
UNFAVOURABLE as there is CSB Regulator , established by Eardisia’s central government, who is strtict and have a
lot of requirements to comply with

Economy
UNFAVOURABLE as Eardisia has economic recession leading to fall in disposable income of people and hence fall in
donation, number of members and visitors

Social
FAVOURABLE as a lot of people donate to charitable cause (5m members). Also people like to volunteer (20000
volunteers)

Technological
FAVOURABLE as people can pay donations online. Also charities use social media and emails for marketing. People
can buy gifts and souvenirs online

Ecological
UNFAVOURABLE as there is high awareness in people and performance is measured against increasingly rigorous
sustainability targets. Climate change and adverse weather conditions also affect the sites.

Legal
UNFAVOURABLE as there are stringent regulations relating to audits, risk management and control reports by CSB
regulator. There is also data protection regulations.
 PORTER 5 FORCES
Power of customer
HIGH as donors and members contribute on their own free will i.e. there is no compulsion or force on them

Power of suppliers
HIGH for conservation work contractors as it requires specialist staff
LOW for shops and café suppliers as we are the largest charity

Threat of new entrants

LOW as most heritage sites are with HP and LTP. Also, there is strict regulator (CSB) and there is economic
recession which will discourage new charities to open for the time being

Competition
Low as HP is the largest heritage charity for over 300 years old sites.

Substitute products
HIGH as donors receive requests from many charities. Charities which are in the news at a particular time may
receive more donations, but this means that donors will give less donations to other charities
 ANALYZE THE STRATEGIC POSITION
PESTEL
Covered above

PORTER 5 FORCES
Covered above

INTERNAL FACTORS (ALSO CALLED SOURCES OF COMPETITIVE ADVANTAGE)

Staff
HP has 4000 employees. Some staff have been working with HP for a long time and staff are willing to
work for less salary because of their commitment to HP’s mission

Volunteers
HP has 20000 volunteers who work at the sites, thus helping HP to save significant staff cost. However,
they can discontinue any time which can affect the working hours of the site and visitor experience

Financial resources
HP has been making operating profits for several years. It was able to purchase some sites with its own
funds. However, the profit margin has been declining due to falling income and rising costs.

IT
There is adequate IT systems to meet business requirements. IT systems are fully compliant with data
protection regulations. Donations can be paid online through website. But HP does not use big data
analytics or apps.

Brand
HP has existed since 120 years and is the largest heritage charity having 350 sites. It has 5m members
hence it has a strong brand and reputation

Ancient sites
HP has 350 sites over 300 years old which are unique assets and can help attract a lot of visitors

Governance
HP has a two tier board. Members are involved in appointing the Board of Trustees. It has 3 board
committees (audit, nomination and remuneration). Hence it has good corporate governance procedures
in place. However it does not have any risk committee.
 TWO TIER BOARD

1- Board of Trustees
▪ Consists of Chairman and NEDs
▪ Focuses on strategies
▪ Supervises the Executive Board (see below)

2- Executive Board
▪ Consists of CEO and executive directors
▪ Responsible to implement strategies
▪ Focuses more on operational and day-to-day management

Advantages & Disadvantages of a Two-Tier Board:

Advantage Disadvantage

▪ Segregation of duties ▪ Slower decision making

▪ Greater independence (NEDs have upper hand) ▪ BOT less aware of operational matters
▪ Higher stakeholder confidence ▪ Executive board demotivated due to limited
▪ CEO cannot dominate the NEDs involvement decision making
▪ Information sharing by executive board
might be poor
▪ Dispute or conflict between two boards

PUNCH LINES FROM PRESEEN:

- HP has a two-tier governance structure with a board of trustees and board of executive directors
- Board of Trustees has 9 members AND is responsible for overall control and management of HP,
and for developing its strategies in consultation with the board of executive directors
- HP as 6 executive directors and is responsible for the day-to-day management of the operations
of HP and is headed by the CEO
 E-BUSINESS / ONLINE BUSINESS
Advantages of E-Business
- Global reach / no geographical limitations leading to increased customers and revenues
- Lower cost (since no physical presence is required)
- Customer convenience and saving
- Able to attract younger generation
- Provides competitive edge

Disadvantages:
- Not all customers use internet
- Requires IT expertise
- Risk of hacking, data leakage and Cyber crimes
- High dependence on technology
- Data security and privacy legislations
- One time investment

PUNCH LINES FROM PRESEEN:

- Donors can pay donation online through the website
- Some charities also sell their products online
- Growth in revenue is slowing down
 E-MARKETING
Tools used in E-Marketing
- Emails
- Website
- Search engine optimization
- Social media marketing (facebook, insta, twitter, youtube, whatsapp, tiktok, etc)
- Links on various related websites
- Communities, forums, blogs, Influencers

Advantages of E-Marketing
- Global reach / no geographical limitations
- Lower cost
- Personalized marketing
- Customer convenience
- Data analytics
- Able to attract younger generation
- Easy two way communication
- Able to obtain customer feedbacks
- Provides competitive edge

Disadvantages:
- Not all customers use internet
- Requires expertise
- Risk of hacking, data leakage and Cyber crimes
- Data security and privacy legislations

PUNCH LINES FROM PRESEEN:

- Marketing in charity industry is done through TV, mail posts, texts messages, fund raising events
(physical or conventional) and social media and emails (digital)
- Charities save contact details of donors and focus marketing campaigns for obtaining recurring
donations (personalized or targeted marketing)
- Younger generation (school and college students)
- Growth in number of members and visitors is slowing down
 BIG DATA ANALYTICS
Advantages of big data
- Deeper insight into latest customer needs and trends
- Offer customized product
- Personalized and targeted marketing
- Increase customer satisfaction and retention
- Higher revenue / market share
- Competitive edge

Disadvantages of big data

- Data security and privacy
- Legal compliance and complications
- Requires technical expertise
- One time investment

PUNCH LINES FROM PRESEEN:

- HP has a website
- Charities save contact details of donors and focus marketing campaigns for obtaining recurring
donations
- Growth in number of members and visitors is slowing down
 USE OF MOBILE APPS
Benefits
- More accessible / handy / convenient
- Notifications / reminders / popups
- Two way communication / better engagement
- Feedbacks and complaints
- More personalized
- Able to attract younger generation
CLOUD COMPUTING
 CUSTOMER SEGMENTATION ANALYSIS
E.g. of customer segmentation
- Donors
o By age
o By amount
o Frequency (one time or recurring)
o Physical or online donation
o Individual vs corporate donors
o Geographical location
- Members
o By age
o By gender
o New member vs renewed member
o Number of Renewal vs non renewal
o Participation in voting
o Frequency of visits to sites
o Satisfaction %age
o Geographical location
- Visitors
o Age
o Gender
o Site wise
o Frequency of visits
o Satisfaction %age
o Geographical location
o Season
o Local or tourist
Advantages of customer segmentation
- Deeper insight into latest customer needs and trends
- Offer customized product
- Personalized and targeted marketing
- Increase customer satisfaction and retention
- Higher revenue / market share
- Competitive edge
PUNCH LINE FROM PRESEEN:
- Growth in number of members and visitors is slowing down
 RISK APPETITE
Risk appetite is the amount of risk an organization is willing to take. Higher risks have higher returns and
lower risks have lower returns. Risk appetite varies from company to company depending on its
shareholders attitude towards risk. In other words, the organization needs to decide whether it wants to
be risk averse or risk seeker.

Risk appetite of HP seems low as it is a charitable organization limited by guarantee and is dependent on
income from donors and members.

RISK ASSESSMENT
- Risk assessment means measuring the ‘impact’ and ‘probability’ of each risk and then prioritizing
those risks accordingly
- TARA model is used to do risk assessment
 Risk Impact Probability Strategy /
recommendation

Reputational loss LOW TO MEDIUM LOW ACCEPT

Reputation loss will As HP as a code of Regular training on
happen over a passage conduct which is to be code of conduct.
followed by all
of time and not Regular CSR activities
trustees, directors,
overnight employees and Good marketing and
volunteers branding

Economic recession LOW TO MEDIUM HIGH REDUCE

Impact of economic As Eardisia is already Focus on maintaining
recession will happen facing economic income levels, adding
recession
over a passage of time new products and
and not overnight tighter control on costs

Loss of employees and LOW TO MEDIUM LOW ACCEPT

volunteers Limited impact as all HPs mission is close to Focus on motivation
staff and volunteers the heart of employees and retention
will not leave at the and volunteers strategies for staff and
same time volunteers. Talent
management program.
Succession planning

Insufficient financial LOW TO MEDIUM HIGH REDUCE

resources
Insufficient financial As Eardisia is already Focus on maintaining
resources will happen facing economic income levels, adding
recession, the revenue
over a passage of time new products and
growth and profit
and not overnight margins are falling tighter control on costs

Poor performance by LOW TO MEDIUM LOW TO MEDIUM ACCEPT

suppliers and
As poor performance As HP uses 3rd party Strict supplier and
contractors experts
might happen at 1 or 2 contractor selection
sites and not at all sites criteria, regular
at the same time or monitoring of the
not all the suppliers quality of the work by
will do poor procurement
performance at the department . Regular
same time training of
procurement dept
 Risk Impact Probability Strategy /
recommendation

Health and safety LOW TO MEDIUM HIGH REDUCE

Accident might happen As sites have potential Improve health and
at 1 or 2 sites and not hazards and extreme safety procedures, staff
weather
at all sites at the same training, danger sign
time boards, emergency /
first aid procedures.

Climate and weather LOW TO MEDIUM LOW TO MEDIUM ACCEPT

Regular maintenance
and conservation of
sites

Cyber-security HIGH LOW TO MEDIUM TRANSFER

Loss of donors / as HP is fully compliant Use 3rd party experts
members, loss of with data protection and specialists for IT
income, reputation regulations security e.g. cloud.
loss, regulatory fines Cyber insurance

Competition from other LOW TO MEDIUM HIGH REDUCE

charities
Loss of income will Charities which are in Focus on strong
happen over a passage the news at a marketing, fund raising
of time and not particular time may events, data analytics
overnight receive more and regular
donations engagement with
donors and members

Deterioration in LOW TO MEDIUM LOW TO MEDIUM ACCEPT

condition of sites and
antique objects Deterioration will HP focuses on regular Continue using experts
happen over a passage maintenance and for regular
of time and not conservation of its sites maintenance and
overnight and uses 3rd party conservation activities
experts
 RISK MANAGEMENT
Risk management means how the risks are IDENTIFIED, MEASURED AND MANAGED by the company.
Risk management techniques include:
▪ Embedding risk management in organization’s culture
▪ Adopting Enterprise Risk Management (ERM) framework
▪ Risk assessment (TARA model)
▪ Risk Register
▪ Risk committee
▪ Risk manager (for larger organizations)
▪ Risk audits (for larger organizations)

PUNCH LINE FROM PRESEEN:

- HP faces several risks as mentioned in the risk register
- HP has audit, nomination and remuneration committees but no risk committee.
 PROS AND CONS OF RISK COMMITTEE
-

PROS:
- More specialized (as those directors will be nominated who have experience in risk mgt)
- More focused (as risk committee will have a clear Terms of Reference document)
- More time (risk committee can meet more often)
- Frees up the board (the full board can focus more on business issues and strategies)
- Higher stakeholder confidence (guarantors, donors, members and CSB regulator will feel more
confident that risk related matters are monitored by a proper committee)
- Others: Will help in filing the report on internal controls and risk management systems to CSB
regulator

CONS
- May not be 100% independent
- May not have risk management expertise as it is a specialized function
- May not give sufficient time
- May not have full operational knowledge of the business

PUNCH LINE FROM PRESEEN:

- HP faces several risks as mentioned in the risk register
- HP has audit, nomination and remuneration committees but no risk committee.
 STAKEHOLDERS

Stakeholder Power Interest Strategy

(ability to impact decisions) (overall management of Co)

Trustees HIGH HIGH KEY PLAYERS

Responsible for overall They are involved in overall
management of HP and management and operations
of HP
developing

Executive HIGH HIGH KEY PLAYERS

directors They are involved in overall
Involved in strategy development
with BOT management and operations
of HP

Members HIGH LOW KEEP

SATISFIED
5m members contributing 43% of They are not involved in overall
HP revenue. They have voting and management and operations
of HP
nomination rights

Volunteers HIGH LOW KEEP

SATISFIED
The sites will open less frequently They are not involved in overall
if volunteers are not present management and operations
of HP

Donors HIGH LOW KEEP

They are not involved in overall SATISFIED
Contributes 16% of HP revenue.
management and operations
of HP

Visitors HIGH LOW KEEP

They are not involved in overall SATISFIED
Contributes 14% of HP revenue.
management and operations
of HP

CSB HIGH LOW KEEP

Regulator They are not involved in overall SATISFIED
Represents government and may
cancel the charity license in case management and operations
of HP
of non compliance
Stakeholder Power Interest Strategy
(ability to impact decisions) (overall management of Co)

Media HIGH LOW KEEP

They are not involved in overall SATISFIED
Popularity on media directly
affects the level of donation management and operations
of HP

Employees LOW HIGH KEEP

They are involved in overall INFORMED
There is no trade union.
management and operations
of HP

Guarantors LOW LOW MINIMUM

They are not involved in with EFFORT
They don’t have any voting rights
the charity’s activities However since
they
guarantee to
settle debts,
they should be
keep informed

DISCUSS CONFLICTING INTERESTS OF STAKEHOLDERS

PUNCH LINE FROM PRESEEN:

- One of HP’s value is Inclusivity ie consider key stakeholder expectations in decision making
 EVALUATE PROPOSAL / PROS AND CONS

PROS CONS
Virtual or Augmented reality / Online
Tours / 3D modelling
- May not be the same experience as physical
(Disruptive technologies) visit (less inspiring and enjoyment)
- Increase geographical reach (more revenue) - May not be in line with HP’s value for
Enjoyment
- Reduce dependency on volunteers (tour
guides) and hence will not affect the site - Café sales might go down
opening timings - Requires one time investment
- Lower health and safety risk - It requires technical expertise
- Lower wear and tear of site due to lessor - Not all visitors prefer virtual / online tours
physical visits (lower maintenance and
conservation cost) - It may not be successful or accepted by
members and visitors (risky)
- More innovative giving comp edge
- May demotivate volunteers
- It will support HP’s value for accessibility

AI tour guides (with headphones)

(Disruptive technologies)
- May not be the same experience as human
guide (less inspiring and enjoyment)
- Reduce dependency on volunteers (tour
guides) and hence will not affect the site - May not be in line with HP’s value for
opening timings Enjoyment
- Multi-language options - Some questions may not be answered
- More innovative giving comp edge - Requires one time investment
- It requires technical expertise
- Not all visitors prefer AI guided content
- It may not be successful or accepted by
members and visitors (risky)
- May demotivate volunteers
Corporate / wedding events at Site

- New source of revenue - May affect visitor timing or experience

- More marketing and visibility - Higher wear and tear of site

- May lead to more membership - Higher health and safety issue

- May require higher staff and volunteers
- Members may not like that sites are used
for corporate or wedding events hence fall
in membership
 IMPACT OF DATA SECURITY BREACH / LEAKAGE
- Business / operational disruption
- Reputational loss
- Loss of customers / revenue / market share
- Legal cases by customers
- Regulatory fines (e.g. breach of Data Protection Act)
- Incorrect decision making based on erroneous data

PUNCH LINE FROM PRESEEN:

- HP has significant personal and confidential data (donors, members, employees, volunteers, etc.)
- HP is fully compliant with Data Protection regulations
- Cyber is one of the key risk mentioned in the risk register

IT RISKS & SECURITY

HARDWARE / SERVERS
RISKS SECURITY / CONTROLS

▪ Unauthorized access to servers ▪ Physical security of Servers:

▪ Damage / malfunction o Security Guards

o Biometrics
▪ Power failure
o Swipe cards
▪ Fire / Flood / Earthquake
o CC TVs

▪ Fire protection

▪ Generators / Power supply alternates

▪ Backup equipment
 IT RISKS & SECURITY

SOFTWARE / DATA
RISKS SECURITY / CONTROLS

▪ Hacking / data leakage ▪ Strong password management / regular changing

▪ Data loss / corrupt ▪ Two factor authorization

▪ Cybercrimes / frauds ▪ Data encryption

▪ Virus ▪ User access rights should be as per their roles

▪ Software malfunction / bugs ▪ Regular Backups

▪ Internet dependency ▪ Firewalls

▪ Audit Trails / system logs

▪ Updated anti-virus

▪ Segregation of duties

▪ Disaster recovery plans

▪ Regular staff training

▪ IT security audits
 FALLING GROWTH IN NO. OF MEMBERS
Possible reasons
- Overall economic recession in Eurdisia
- Inadequate marketing
- Less number of new members added
- Low membership renewal / retention
- No new site being added (i.e. nothing new)
- Competition / other charities
- Poor quality of service
- Members not satisfied with BOT performance
- Possible bad publicity
- Higher admin cost

Actions
- Investigate reasons through feedbacks and surveys
- Add new sites / attractions
- Improved marketing (physical and e-marketing) and effective sales promotion
- Big data analytics
- Apps
- More engagement with younger generation
- Offering life time membership
 IMPACT OF DEMOTIVATED STAFF
(SOME POINTS APPLIES TO VOLUNTEERS TOO)

Impact of demotivated staff

- Affect on quality of product / service
- Fall in customer satisfaction rating
- Loss of reputation
- Fall in revenue and market share
- High staff turnover
- Operational disruption
- Inefficiencies
- Increase in recruitment and training costs

How to address issues

- Staff surveys and exit interviews
- Attractive remuneration
- Rewards and appreciation
- Training and talent management programs
- Career growth opportunities
- More involvement in decision making
- Succession planning
- Better working environment

PUNCH LINE FROM PRESEEN:

- If employees and volunteers leave and cannot be easily replaced, then the experience offered to
visitors to sites may be affected
- Volunteer hours and attendance may not be regular and they may decide to stop volunteering
suddenly
- The sites may be open less frequently
 STAFF TRAINING / TALENT MANAGEMENT PROG
(SOME POINTS APPLIES TO VOLUNTEERS TOO)
Advantages of staff training / talent management program
- Increased skills and competencies
- Better quality of work
- Higher customer satisfaction and revenue
- Lower customer complaints
- Higher staff motivation
- Increased productivity and efficiency
- Lowers staff turnover/ recruitment costs
- Helps in succession planning

Disadvantages or risks with staff training

- Requires expertise
- Staff may leave and join competitors after training
- Resistance / low motivation to participate
- Day to day work will get affected during training days
- Time and cost implications
- Difficult to identify training needs and measure results

PUNCH LINE FROM PRESEEN:

- 4000 staff
- 20000 volunteers
- Training days of staff and volunteers is one of the KPIs used in charity industry
- Non availability of staff or volunteers directly affects visitor experience and site timing /
operations
 FINANCIAL PERFORMANCE / PROJECTIONS
Analyze the financial performance
- Historic P&L will be given in exhibit
- Identify major variances (based in variance ‘amounts’)
- Explain the reasons for variance using the KPIs and information given in exhibit / preseen
PLS DO Q1B OF BCO (DEC 2020 PAPER)

Financial projections
If financial projection is given then apply the below checklist to draft your answers:
- Chk whether discounted cash flow method is used
- Whether the NPV is positive or not
- Calculate payback (on pre discounted cash flow) and comment (<4 yrs is reasonable)
- Check the projections and assumptions and see whether they are realistic
- Ask for breakups and basis of assumptions
- Check corporate tax has been included or not
- Check the basis of discount factor and check whether business risk factor has been included or
not
- Suggest doing a sensitivity analysis
 SOURCES OF FINANCE
Equity financing:
PROS
- Cost is linked with profitability i.e. dividend are paid if company makes profit
- No collateral is required
- No affect on gearing level
CONS
- Dilutes existing shareholding pattern
- May affect the culture or strategies of the company due to presence of outsiders

Debt financing:
PROS
- Does not affect the ownership or culture of the company
- Relatively faster to arrange
CONS
- Financing cost is not linked with business profitability (fixed commitment)
- Require collaterals and strict covenants
- Deteriorates current gearing level

Lease financing:
PROS
- Does not affect the ownership or culture of the company
- Relatively faster to arrange than debt financing
- All maintenance is done by the lessor
- Less covenant compared to debt financing
CONS
- Financing cost is not linked with business profitability (fixed commitment)
- Require collaterals
- You do not own the asset
 BRIBERY
Why should bribery not be done
- Its unethical and against social norms and illegal
- Violates the principle of integrity and honesty
- Can lead to reputation loss
- Can lead to legal cases, fines and penalties
- Loss of customer and revenue
- May lead to cancellation of license to do business

Measures to prevent bribery

- Org should have ethical code of conduct / anti-bribery policy
- All employees should be trained on these policies
- All employees should report to management if they are asked by client for any bribery
- Strict disciplinary actions to discourage other employees
- Whistle blowing arrangement
- Ethical or anti-bribery committee

PUNCH LINE FROM PRESEEN:

- Code of conduct document prohibits bribery
 CSR
Importance / advantages of CSR
Customers
- Will attract customers who value CSR activities
- Competitive edge / more revenues

Employees
- Will motivate employees (better productivity and efficiency)
- Improved staff retention (lower recruitment and training cost)
- Able to attract talented workforce

Suppliers
- Will attract suppliers who value CSR activities
- Discounts
- Collaboration / strategic alliance

Government
- Prestigious government award leading to improved reputation and brand
- Improved relationship with govt (government contracts)
- Possible tax benefits

Society
- Higher reputation and image
- Word of mouth
- More customers / revenue

Investors
- Will attract investors who value CSR activities
- May reduce our cost of capital

Banks / lenders
- Will attract banks who value CSR activities
- Improved credit rating
- May reduce our financing cost

PUNCH LINE FROM PRESEEN:

- One of the Value is Social and environmental responsibility
 ETHICAL ISSUES / SOCIAL FOOTPRINT
- Employees
o Low pay
o Long working hours
o Poor working conditions
o No Training
o Discrimination
o Lack of diversity (against HP’s value)
o Job redundancies

- Customers
o Health and safety
o Misstatement of facts (against HP’s value of transparency)
o Breach of personal data and bank details
o Over pricing
o Unfair and unethical dealing

- Suppliers
o Breach of personal data and bank details
o unfair and unethical dealing
o under pricing
o delay in payments

- Society
o Environmental damage
o No CSR
o against HP’s value of social and environmental sustainability

- Other ethical matters:

o Deliberate violation or non-compliance of law
o Misstatement of facts or misreporting (against HP value of transparency)

PUNCH LINE FROM PRESEEN:

- One of the Value is Social and environmental responsibility
 ENVIRONMENTAL FOOTPRINT / IMPACT
- Reduce use of scarce natural resources
- Recycling of waste products
- Reduce carbon footprint / emission / pollution

PUNCH LINE FROM PRESEEN:

- One of the objectives is sustainability i.e. fight against climate change. Increased use of green
energy and recycling and minimizing waste
- There are several environmental KPIs used on charitable industry such as resource consumption,
% of renewable energy used, emissions, wastage and recycling, etc.
 ANALYZE CULTURE
Power structure
- Analyze the leader and their style / personality
- Leader can be BOT or BOD or CEO
No information in preseen

Organizational structure
Company structure or board structure:
Preseen information:
- Two tier board
- BOT 9 members (NEDs)
- BOD 6 members (Eds)
- 3 board committees (audit, nomination, remuneration)
- Headoffice and 350 sites (centralized structure)

Control systems
Cost focused or quality focused
Reward structure / punishment system
Preseen infomation:
- Focus on quality (site maintenance and conservation)
- Focus on cost control as high admin cost can lead to bad reputation
- Offers average salaries

Rituals and routines

- Routine activities and practices
- Office timing, punctuality, long working hours, annual leaves, annual staff function, staff
engagement / townhalls, playdays, picnics and outings, remote working, etc.
No information in preseen
Symbols
- Office building
- Office layouts and sitting arrangements
- Uniforms / dress code
No information in preseen

Stories
- Values of the leader
- Staff loyalty to leader
- Past traditions
Preseen infomation:
- 120 year old so rich history
- There are staff working for several years and HP’s mission is close to their heart
 Technical Article
Impact of New Technologies on Culture (Mar 2025)
This article looks at how homeworking using digital technologies, impacts
organizational culture

Always “connected” culture

- Through laptops, smart phones and tablets, employees feel that they are always connected with
work 24/7. This disturbs their work-life balance which increases their stress level and deteriorate
their health

Monitoring of employees

- Due to a rise in remote working, organizations are using technologies to monitor employee
activities, such as to track attendance, workload, productivity, as well as to prevent employees
from playing online games during work hours

- While this is good, monitoring can also demotivate employees as they feel that they are under
constant monitoring and their privacy is invaded. This can lead to employee stress, damage trust
and adversely affect organization culture

- Organization needs to balance level of monitoring versus employee privacy and legal rights and
should transparent with employees and clearly communicate why and how monitoring tools are
used

Lack of face-to-face communication

- Increase in home working has led to a decrease in face-to-face / physical interactions

- Employees are unable to create personal connections with colleagues, which means it is harder
for teams to build trust and motivation, and can develop feelings of isolation among employees

Summary

There are undoubtedly many benefits for organisations that embrace new technologies. But, to
mitigate the negative impacts on organisational culture, organizations should establish clear
boundaries to ensure a work-life balance, promote transparency, foster human connections and
emphasize employee health and wellbeing
 INTEGRATED REPORTING
Role of IR
An integrated report is a concise communication showing link between organization’s mission, strategies,
financial performance and social and environmental initiatives and shows how organization creates value in
short, medium and long run.

Benefits or Importance of IR
- Better reputation
Since IR is a voluntary disclosure, it will enhance the reputation and image in the eyes of its
customers and other stakeholders

- Communication with Wider stakeholders

IR focuses on wider stakeholders and not only shareholders. It will help communicate with its key
stakeholders such as customers, regulators, employees and wider community / society

- Provides wholistic and futuristic view

IR provides wholistic and futuristic view of the organization and how it adds value. This will help
the stakeholder to better understand the mission, objectives and strategies

- Social and environmental initiatives

IR highlights the social and environmental initiatives of the Org and hence will attract green
customers

- Lower cost of capital

N/A

- 6 capitals
Traditional financial statements only focus on share capital. However IR focus on 6 capitals which
will give a better understanding to all the wider stakeholders of how Organization is adding value
in short, medium and long term.

Challenges of IR
- It may disclose too much confidential information due to which organization may lose its
competitive position
- IR is subjective in nature, specially measurement of the 6 capitals
6 capitals
1- Financial capital (improving but operating profits are reducing)
2- Manufacturing capital (350 sites over 300 years old)
3- Intellectual capital (120 year old charity with good reputation)
4- Human capital (4000 staff and 20000 volunteers)
5- Social and relationship capital (members, visitors and donors are growing but the growth % is
falling)
6- Environmental capital (performance is measured against increasingly rigorous sustainability
targets)

Difference between F/S and IR

- FS is historic IR is futuristic
- FS is short term IR is medium to long term
- FS focus on shareholders and IR focus on wider stakeholders
- FS focus on financial performance and IR focus on social and environmental initiatives
- FS talks about share capital IR talks about 6 capitals

PUNCH LINE FROM PRESEEN:

- Reputational loss is one of the key risk
- HP has a wide range of stakeholders (donors, members, visitors, volunteers, CSB, etc.)
- Social and environmental sustainability is one of the value
 BOARD DIVERSITY

EXAMPLE OF BOARD DIVERSITY

- Age diversity (younger directors)
- Gender diversity (more females)
- Skill diversity (functional expertise)
- Ethnic diversity (various ethnic / cultural backgrounds)

BENEFITS OF BOARD DIVERSITY

- Wider pool of talent
- Fresh ideas / out of box thinking
- Healthier debates
- More expertise
- Better image and outlook of the organization
- Compliance with listing regulations
- Good corporate governance feature
- Better decision making

CHALLENGES OF BOARD DIVERSITY

- More arguments or disagreements of opinions
- Views of minority directors may not be valued

PUNCH LINE FROM PRESEEN:

- BOT 9 members (NEDs) and BOD 6 members (EDs)
- One of the values is diversity
 CONTINUOUS PROFESSIONAL DEVELOPMENT
For BOT/BOD
PROS
- BOT / BOD will have better knowledge and skills
- BOT / BOD will be updated with latest development
- Will enhance business performance
- Higher stakeholder confidence

CONS
- May not give time to CPD
- May cause some disturbance in day to day operations during training days
 IMPLEMENTING STRATEGIC CHANGE / TRANSFORMATION

UNFREEZE
- Communicate the reasons and benefits of the change
- Take employee comments and concerns
- Make sure that employees agrees to the planned change

MOVE
- Implementation phase
- detailed planning
- Break the project into smaller tasks
- Make project teams
- Provide training
- Overtime for extra hours spent on project

RE-FREEZE
- Make sure everyone follows the new change
- Reward and appreciate staff
- Promotion and bonuses
- Address resistance
- Monitor and address any post implementation issues
 KEY QUALITIES OF GOOD LEADERSHIP
- Visionary
- Grabs opportunities
- Risk takers
- Motivate staff
- Focus on innovation and growth
- Good strategies
- Never give up / consistent
- Team working
- Leading by example
 PROJECT MANAGEMENT
Project Initiation Document
- Scope and objective: Understanding client needs and set objectives / desired outcomes
- Cost benefit analysis / feasibility: prepare high level cost and revenue budget
- Duration
- Project sponsor: Senior leader
- Project manager: Sponsor will identify an experienced project manager from the team
- Project team: team members to be identified based on size and nature of the project
- Key stakeholders
- Key risks: quality, timeline, cost/budget,
- Key constraints: human resource, financial resource, IT systems, etc.
- Project governance and monitoring: either by sponsor or BOD

Benefit of a PID
- Clarity of scope and objective
- Identifies cost and benefits / profitability of the project
- Assist in submitting tender
- Monitoring the progress of the project
- Assess whether the project is successful

Role Of Project Sponsor

- Provide senior leadership and guidance to project manager
- Arrange resources required for the project
- Monitoring progress and ensuring project is on track
- Problem solving
- Ultimately responsible and accountable for success of the project

Role Of Project Manager

- Breaking down the project into smaller components
- Detailed project planning for each component (quality / time / cost)
- Monitoring of the project team
- Ensuring project is on track
- Execution of the project
- Accountable to the project Sponsor
Why Project Sponsor cannot be the Project Manager at the same time
- Two separate roles requiring different skill sets
- Sponsor may not have technical expertise required from a project sponsor
- Sponsor may not have sufficient time to give to project
- No segregation of duty / monitoring of project manager

Post Project Review

- Its carried out to assess whether project management steps were properly followed or not
- The aim is to learn from mistakes so that future project follow proper project management steps

Post Implementation Review

- Its carried out to assess whether the desired objectives / client expectations were met (outcome)
- The aim is to assess customer satisfaction by taking feedbacks
 SEPARATE BOARD COMMITTEE
Advantages of separate board committee
- More specialized
- More focused
- More time can be given by committee
- Frees up the Board for other strategic matters
- Higher shareholder confidence

Challenges of separate board committee

- May not find NEDs with right expertise
- NEDs may not give sufficient time
- May lead to extra cost
- Lack of independence or motivation
- Lack of time
 ROLE OF NEDS
Role / importance / benefits of NEDS
- Brings independence to the board
- Enhance shareholder confidence
- Share external experience and ideas
- Monitors the performance of executive directors
- Heads all board committees
- Compliance with listing regulations
- Whistle blowing

Challenges of NEDS
- May not be 100% independent
- Low motivation (as they get low fees)
- May not give sufficient time
- May not have sufficient expertise
HARMON PROCESS STRATEGY MATRIX
NO INFORMATION AVAILABLE IN PRESEEN
 LAST WEEK PREPARATION PLAN
1- Master top 25 important topics video

2- Watch MAR 2025 webinar DAY-1 for prof skills, formats, exam techniques

3- Watch PRE-SEEN WORKSHOP (specially day 2)

4- Draft following 3 papers under strict exam condition/ mock (3 hrs 15 min)

a. Dec 2020: BCO

b. specimen paper 2: Yex Marine
c. PRE-MAR 2025 mock exam: Corjetz
 POINTS FROM PRE-SEEN TO QUOTE REPEATEDLY
IN YOUR ANSWERS WHEREVER POSSIBLE
Major Risks
1. Reputational loss
2. Economic recession
3. Loss of employees and volunteers
4. Insufficient financial resources
5. Poor performance by suppliers and contractors
6. Health and safety
7. Climate and weather
8. Cyber-security
9. Competition from other charities
10. Deterioration in condition of sites and antique objects

Mission
‘Permanently protects and preserves sites and promotes interest and access to them’

Values
True historical facts, accessibility, enjoyment, involvement, transparency, inclusivity, diversity, social and
environmental responsibility

Strategic objectives
- Inspire: Inspire everyone to visit sites and provoke their imagination and emotions
- Access: Visitors should have the privilege of standing on the spot where history happened
- Engage and entertain: Visitors should love the time they spent and feel delighted and entertained
- Involve: Engage with donors, members and volunteers and build strong relationship
- Conserve: Protect sites and antique objects for current and future generations
- Sustain: Fight against climate change. Increased use of green energy and recycling and minimizing waste
KPIs
- Income and expenses
o Income is growing but the growth %age is falling since last 2 years with almost no growth
in 20x3
o Profit margins are falling since last 2 years as expense is growing faster than income
- Revenue mix
o Membership fee 43%
o Donations 16%
o Shops 15%
o Admission fees 14%
o Café 12%
- Expense mix
o Site operating cost 50%
o Site maintenance and conservation cost 39%
o Admin cost 11%
- Number of members and visits
o Membership growth %age is falling since last 2 years with almost no growth in 20x3
o No. of visits growth %age is falling since last 2 years
ALL THE BEST MY CFOs

CAUTION:
THIS IS A PRIVATE DOCUMENT
NOT TO BE SHARED ON ANY PUBLIC GROUP