Accounting for Managers – A case of Tesco PLC’s 2020 Annual Report

Topic

Accounting for Managers – A case of Tesco PLC’s 2020 Annual Report

Instructions

Critically evaluate how the Annual Report of Tesco PLC illustrates the regulatory framework within which limited companies work.
You should discuss the corporate governance issues facing Tesco PLC and the duty of care of the directors of limited companies such as Tesco PLC.

Answer preview

According to the Companies Act 2006 (S171-177), directors have a duty to act for the interests of the company and not creditors, shareholders, or other stakeholders.  They have a duty to act with their powers but in accordance with the company constitution to promote the success of the company. Directors are expected to make decisions that are likely to create long-term positive consequences to the company, address the interests of employees, maintain a proper reputation of the company and maintain fairness to all stakeholders (McLaney & Atrill, 2018). According to the 2020 annual report, Tesco strives to conform to the Companies Act 2006 in its accounting practices.

Word count: 3038