ACCA Strategic Business Leader (SBL) Practice Exam

What are the key focus areas outlined in the Higgs report regarding Non-Executive Directors (NEDs)?

1. Strategy, Scrutinize, Risk, People

2. Market Trends, Costs, Revenue, People

3. Efficiency, Quality, Profitability, Sustainability

4. Crisis Management, Governance, Ethics, Accountability

The correct answer is: Strategy, Scrutinize, Risk, People

The Higgs report emphasizes the pivotal role of Non-Executive Directors (NEDs) in enhancing corporate governance and performance. It outlines key focus areas for NEDs, primarily revolving around strategy formulation, scrutinizing the performance of the executive team, managing risks, and overseeing people management and organizational culture. Focusing on strategy allows NEDs to contribute to the long-term vision, ensuring that the company's objectives align with market needs and stakeholder expectations. By addressing scrutiny, NEDs are tasked with challenging and evaluating the decisions and actions of the executive team, which enhances accountability and performance. The emphasis on risk management reflects the need for NEDs to identify potential threats to the organization's success and ensure that appropriate mitigation measures are in place. Lastly, the people aspect highlights their responsibility in overseeing talent management, culture, and the overall effectiveness of the workforce within the organization. This clarity in roles and responsibilities outlined in the Higgs report provides a comprehensive framework for NEDs to operate effectively, thereby contributing to better governance and strategic direction within companies. Other options do not encapsulate the essence of the Higgs report's focus on corporate governance and the specific roles of NEDs in enhancing both management and oversight functions.