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5. Ethical issues and recommendations

5.1 Non disclosure of fine to Joint Auditors

Given that we have previously been fined, which fine we paid and were given a new deadline
which we were in default of at the time of the interim review, although we were in consultations
with the NTRA, it was either dishonest or an indictment of our good business judgment to claim

we were not aware of any such pending matters. We may have overestimated the pro-business
stance of the new government of Nakolia. With their election platform predicated on security for

all Nakolians, it was inevitable that the new government authorities would be far less lenient on
our failure to comply with such a serious security requirement (professional competence).

Recommendation: Suspend the CEO of MCOM Nigeria and order a full investigation widening
up the chain of command with a view to full disciplinary action. This will demonstrate the Board's

commitment to strong ethics and good corporate governance.

5.2 Security crisis and legal wrangling in Nakolia

The board is wondering why so much public discontent despite up to 5% of our revenue that

has been reinvested into their soccer and telecommunications. The public may regard this as
CSR spend in MCOM's own self interest (economic to ethical) than an actual duty of care
(philantropic) in terms of the Carrol model. Atrocities may or have been caused by Bokanda

relying on our facilities. We have a duty of care for the Nakolians to work with their government
to prevent crime. It is perfectly legitimate to declare the matter 'sub judice' once filed in court but
we should not and cannot be in court for expediency or without a legal foundation. How can we

challenge the authority of the NTRA when they had previously imposed a fine on us for which
we paid? If it is correct that we challenged this decision to buy time, it is at best insensitive to

the security concerns of Nakolians and at worse deceptive to the markets.

Recommendation: Move the current court action to negotiations with the government of
Nakolia with the support and involvement of the Sadimba government. This removes the risk of
damaging relations with the Nakolian people via their trusted representatives. The board also

needs to review its CSR policy and make a stronger public commitment to respect the laws of
Nakolia.

Developed by The CharterQuest Institute for 'The CFO Business Case Study Competition 2016'
www.charterquest.co.za | Email: thecfo@charterquest.co.za