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ACCA Strategic Professional · Strategic Business Leader · Public sector governance

A city council must balance the needs of taxpayers, service users, central government, staff and local businesses when setting its budget. Compared with a listed company board, which feature of public sector governance does this best illustrate?

It illustrates a wider set of stakeholders with potentially conflicting objectives and no single profit measure. Unlike a listed company focused on shareholders, a council must weigh taxpayers, users, government and others, judging success on value for money and service outcomes.

  1. AA wider range of stakeholders whose objectives may conflict, with no single profit measureCorrect
  2. BA single dominant shareholder group with clear financial objectives
  3. CFreedom to ignore stakeholders with low power
  4. DReliance solely on market discipline through share price

Explanation

Public bodies serve many stakeholders with competing aims and judge success by value for money and outcomes rather than profit or share price. A single shareholder focus is characteristic of listed companies, not councils.

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