QUESTION 1

1.1

Shareholders

The board of directors

Employees

Management

1.2

Integrity

Competence

Responsibility

Accountability

1.3

The board of directors complies with the requirements regarding organizational ethics
because the directors assuming responsibility for the governance of ethics and setting the
direction on how such is to be addressed in an organisation.

The directors approve the appropriate code of conduct and ethics policies which articulates
and gives effect to its direction on organisational ethics

The directors ensure that the code of conduct and ethics policies encompass interaction with
both internal and external stakeholders as well as the broader society and addresses the key
ethical risks of the organisation. The directors ensure that employees and stakeholders are
able to familiarise themselves with the code of conduct and ethics policies and delegation of
the responsibility for implementation and execution of the code of conduct and ethics policies
to management.

The board of directors takes it responsibilities relating to ethics management seriously and
has developed a Code of Ethics which lays down the ethical values.
Question 2

2.1. Yes, but he must be given notice of the board meeting and the reasons for his proposed
removal.

He must also be given an opportunity to state his case in the board meeting before the board
may vote on his removal.

A director who is removed from office is immediately suspended, even if his removal was
unfair.

2.2 Yes, because you do not have to give a reason for your resignation, however, a director
must make it clear that he is leaving the company along with the date this is to take effect
from.

2.3. The legislation encourages directors to act honesty and bear responsibility for their action.

Director must exercise his or her power in the best interest of the company.

Director must act with the degree of care, skills and diligence.

Director must act in good faith and a proper purpose.

2.4 Yes, because the director is appointed by the shareholder to manage its day to day affair,
so it is the responsibility of the director to ask shareholder what is expected of him.

2.5. No, because audit committee is a separate chartered committee of the board of director.
The audit committee is the one that reports to the board on things such as audit finding, audit
plan.

The board of directors has shifted some of the audit committee’s responsibilities to separately
chartered committees to create a balance of duties and ensure that they are effectively
executed.
Question 3

3.1

Strategic risk

It’s a risk that Azure Airlines strategy become less effective and the company struggles to
reach its goals as a result. For example, Azure operates a refurbished 35-year-old aircraft
which is leased from an international airline and registered with the South African Civil
Aviation Authority (SACAA). The SACAA requires that engines be overhauled every two
years. Engine overhauls are expected to put the aircraft out of commission for several weeks.
The company may become less effective to reach its goals because the engine that is
overhauled are expected to be put on the aircraft out of commission for several week. This
may cost the company not to reach its goals and failure to adapt to a strategic risk may lead to
bankruptcy.

Compliance risk

When a business expands, the aircraft might find themselves mending to comply with new
rules that didn’t apply to their company before. May 2017 the company exercised an
exclusive right granted by the government to provide twice weekly, direct flights between
Johannesburg and Chobe National Park (Chobe). So, the Azure Airlines need to comply with
the new rules that they didn’t apply before. Aircrafts need to comply with rules that have
been set. The journey time is expected to be significantly reduced in order to encourage
tourism and business development opportunity. Meeting all the rules and regulations that was
set by government could end up being significant cost for the business.

Operational risk

Operational risk refers to an unexpected failure in your company’s day to day operations for
examples it could be a technical failure, could be caused by people or process. Responses
received show that passengers are generally least satisfied with the quality of the food –
especially on the Chobe to Johannesburg flight. Customer may start to complain about the
quality of food that the company is offering, and it may have a negative impact on the
business.
Financial risk

Financial risk refers to the money flowing in and out of your business, and the possibility of a
sudden financial loss.

Azure’s insurance cover includes passenger liability, freight/baggage and compensation

insurance. So, the money will be flowing out as the business compensate the passengers of
their loses.

Reputational risk

If the reputation of the company is damaged, the company will start to see an immediate loss
of revenue as a customer become cautious of doing business with the company. Azure and
travel agents in Johannesburg and Chobe make ticket sales, on several occasions, economy
seating has been over-booked. Customers who have been affected by this have then been
accommodated in business class, as there is much less demand for this, and even less for first
class. Customer will become wary to consider Azure and travel agents when they want to
travel. If the aircraft reputation is damaged there will be an immediate loss of revenue, as
customer become cautious of using aircraft when travelling. Sometimes the employees may
get demoralised and even decide to leave the organisation and the company many find it
difficult to hire good replacements, as potential candidates have heard about the bad
reputation and decide not to join the company. Sponsors or other partners may decide that
they are no longer wanted to be associated with aircraft. Other thing is that they can be a
negative publicity, or a high-profile criticism of the services offered by aircraft.

3.2

Mitigate the risk

Mitigation involves putting contingency plans in place so that if the risky situation does
materialize, you can implement the other plan.

All meals are prepared in Johannesburg under contract with an airport catering company.
Responses received show that passengers are generally least satisfied with the quality of the
food – especially on the Chobe to Johannesburg flight.

Possible ways to mitigate the risk:

Azure Airline should have a meeting with the catering company regarding the poor services
of food and tell them to provide quality foods that satisfy the passengers.

Azure Airline should investigate on the services that a catering company is offering based on
the responses received from the passengers whether the accusations are accurate or not, if so
then the Azure Airline will have to hire another catering company.

Avoid the risk

If the risk consequences are too high, Azure Airline could avoid them completely by
cancelling the high-risk business initiative. Azure Airline has been granted to provide twice
weekly, direct flights between Johannesburg and chobe National park. The journey time is
expected to be significantly reduced, to encourage tourism and business development
opportunities.

Possible ways to avoid the risk:

Azure Airline could pull out from the exclusive rights that are grated by government and wait
until the government grant them another opportunity to travel daily between Johannesburg
and chobe National park.

Transfer the risk

This applies mainly to financial risks and situations where a company can write it into
contracts.

On several occasions, economy seating has been over-booked. Ticket prices for each class
depend on many factors, for example, whether the tickets are refundable/non-refundable,
exchangeable/non-exchangeable, single or return, mid-week or weekend and time of booking.

Possible way to transfer the risk

Azure airline could insure the business against the risk of tickets that are refundable/non-
refundable, exchangeable/non-exchangeable, single or return, mid-week or weekend and time
of booking. The insurer carries the financial risk if economy seating has been over-booked

Accept the risk

Risk acceptance occurs when a business or individual acknowledges that the potential loss
from a risk is not great enough to warrant spending money to avoid it.
Question 4

Water Services Act

Quality of potable water

A water services authority must include a suitable programme for sampling the quality of
potable water provided to consumers in its water services development plan. These include
educating consumer and create awareness about integrated water resource management. The
substances and determinants the water must be tested before the water can be supplied to the
consumers. Department of Water & Sanitation and the international organization must
compare the results obtained from the testing of samples with SANS 241.

Catchment management agencies (CMAs)

The management of water resources need to be managed at the local stakeholder with the
specific focus on the local communities. They need to be collaboration between the
international organizations and the department of water and sanitation promoting equitable
access to water and facilitating social and economic development.

Water Research Commission (WRC)

The Water Research Commission is a vital role in water research by establishing needs and
priorities, stimulating and funding research. Funding was received from various international
organizations incorporated in the United States of America. promoting the transfer of
information and technology and enhancing knowledge and capacity building in the water
sector.