Financial strategy and governance

This module equips you with the necessary theoretical, applied, and critical skills to understand corporate financial strategy and governance issues. This includes gaining an understanding of the three main methods of company valuation – asset-based valuation, market multiples and discounted cash flow and the ability to evaluate the strengths and weaknesses of each valuation technique. You'll examine the implications of behavioural biases for corporate financial policy. You'll also learn how to assess fraud risk, identify insider fraud types and methods, understand the role of corporate governance and external auditors in countering fraud.

Vocational relevance

This module, together with the compulsory module Financial markets and the financing of organisations (B815), will be of particular interest to you if you’re working, or planning to work, in the finance sector of an organisation or in the finance division of a company or public sector/not-for-profit organisation. It’ll also benefit individuals who work, or intend to work, outside of the finance domain but wish to expand their knowledge and skills in order to increase future opportunities.

Qualifications

B816 is a compulsory module in our:

B816 is an optional module in our:

Excluded combinations

Sometimes you will not be able to count a module towards a qualification if you have already taken another module with similar content. To check any excluded combinations relating to this module, visit our excluded combination finder or check with an adviser before registering.

Module

Module code
B816
Credits

Credits

  • Credits measure the student workload required for the successful completion of a module or qualification.
  • One credit represents about 10 hours of study over the duration of the course.
  • You are awarded credits after you have successfully completed a module.
  • For example, if you study a 60-credit module and successfully pass it, you will be awarded 60 credits.
30
Study level
Across the UK, there are two parallel frameworks for higher education qualifications, the Framework for Higher Education Qualifications in England, Northern Ireland and Wales (FHEQ) and the Scottish Credit and Qualifications Framework (SCQF). These define a hierarchy of levels and describe the achievement expected at each level. The information provided shows how OU postgraduate modules correspond to these frameworks.
OU Postgraduate
SCQF 11
FHEQ 7
Study method
Distance learning
Module cost
See Module registration
Entry requirements

Find out more about entry requirements.

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What you will study

The module consists of the following five units:

Unit 1 – Corporate governance
This unit provides you with an overview of corporate governance, including the meaning, significance, and fundamental principles underpinning it. A critical examination of current theories and practices of global corporate governance is also covered. You'll then be introduced to some key corporate governance issues like board diversity, board structure, executive compensation, and institutional investors. As a result of this, you'll understand how governance plays a pivotal role in addressing fraud and ethics issues and in determining corporate investments and financing decisions.

Unit 2 – Company valuation
This unit looks at company valuation in the context of investment. The unit outlines a number of ways of valuing companies, using the techniques from Financial markets and the financing of organisations (B815), and shows how different valuation techniques can be used in different contexts. Namely, the three main types of valuation approaches are discussed. The unit starts by looking at asset values, which use balance sheet data to estimate value. Market multiples, which use share prices to establish comparative benchmarks for value, are then illustrated. Finally, discounted cash flow valuation (DCF) techniques, which use forecast data to estimate present value, are considered.

Unit 3 – Financing decisions, pay-out policy and Islamic finance
The unit introduces you to the rich academic literature on the importance of capital structure and pay-out policy. Based on the material in Financial markets and the financing of organisations (B815), this unit increases your understanding of how capital raised by companies (e.g., via equity or debt) can influence their strategic directions. The unit begins by reviewing the various securities companies use to raise capital. The Modigliani-Miller theorem, which suggests that capital structure and dividend policy are not related to firm value, is then discussed. You'll then learn various “market imperfections” that make capital structure and pay-out policy relevant and how behavioural biases influence financing decisions. Finally, Islamic finance principles and trends are introduced.

Unit 4 – Mergers & acquisitions and corporate restructuring
The unit discusses mergers and acquisitions (M&As) waves in the past decades and their impact on financial decision-making and firm value. You will learn why firms engage in M&As and whether M&As actually benefit different stakeholders (including shareholders, debtholders and employees). Building on the earlier units on governance and financing policies, you will examine how M&As can act as a governance mechanism. Corporate restructuring methods, as well as their costs and benefits, are then  discussed. You'll also learn that many firms operate in multiple lines of businesses and what the associated costs and benefits are.

Unit 5 – Ethics, fraud and governance
The final unit provides an overview of ethics. Ethical issues and dilemmas are identified, and the role that the code of ethics plays in an organization discussed. You'll be introduced to the meaning, impact, nature of fraud, as well as why it is committed. The focus will be on internal fraud as it is the most prevalent and costly form of fraud. The unit then discusses how corporate governance plays a key role in countering internal fraud by focusing on key corporate governance mechanisms, including ethical leadership, auditors and audit committees, and internal controls.

You will learn

By completing this module, you will be able to:

  • examine various governance mechanisms to mitigate agency problems
  • illustrate how standard setters influence corporate governance practices
  • understand the limitation of the shareholder perspective and evaluate the stakeholder view's relevance to corporate governance
  • understand the three main methods of company valuation – asset-based valuation, market multiples and discounted cash flow
  • critically evaluate the strengths and weaknesses of each valuation technique
  • identify the most appropriate valuation method based on the circumstances
  • explain the link between capital structure, pay-out policy and company value
  • examine the implications of behavioural biases for corporate financial policy
  • understand the key principles and instruments of Islamic finance
  • explain trends in mergers and acquisitions, evaluate the motives behind them and examine post-performance
  • assess practical issues around corporate restructuring
  • assess fraud risk and identify insider fraud types and methods
  • understand the role of corporate governance and external auditors in countering fraud.

Teaching and assessment

Support from your tutor

Your tutor will help you with the study materials, mark and comment on your assignments, and provide advice and guidance throughout the module. You’ll be able to contact your tutor by email, phone or via the forums on your module website. They’ll be in touch from the start of the module to confirm how best to contact them.

Contact us if you want to know more about studying with The Open University before you register.

Assessment

The assessment details can be found in the facts box.

You must use the online eTMA system to submit your TMAs.

Course work includes

2 Tutor-marked assignments (TMAs)
5 Interactive computer-marked assignments (CMAs)
Examination
No residential school

Future availability

Financial strategy and governance starts once a year – in May. This page describes the module that will start in May 2023. We expect it to start for the last time in May 2030.

Regulations

As a student of The Open University, you should be aware of the content of the academic regulations which are available on our Student Policies and Regulations website.

    Entry requirements

    You must hold a BA/BSc degree awarded by a recognised university, or equivalent. Various higher education and professional qualifications are considered equivalent to a degree. If you hold a qualification that you believe is an equivalent level to a UK degree you should contact us. The Open University Business School Masters Programme Committee is responsible for judging whether applicants’ qualifications meet the requirements for admission.

    Due to the defined study pattern for the qualification, you’ll first have to successfully complete Financial markets and the financing of organisations (B815) before taking this module. It is strongly recommended that you are comfortable with the use of numerical methods and use of spreadsheets. If you're unsure about these skills, we suggest you familiarise yourself with illustrative numerical skills and methods prior to study.

    You’ll also need an appropriate standard of English language comprehension to be able to work effectively at a postgraduate level. Generally, this means capability equivalent to an International English Language Test System (IELTS) score of 6.5. To assess your English language skills in relation to your proposed studies you can visit the IELTS website. If you’re unsure whether your skill level in English is adequate you may find it helpful to look at our Skills for OU Study site.

    If you have any doubt about the suitability of the module, please speak to an adviser.

    Register

    Start End England fee Register
    06 May 2023 Oct 2023 £1690.00

    Registration closes 13/04/23 (places subject to availability)

    Register
    04 May 2024 Oct 2024 Not yet available

    Registration opens on 01/09/23

    This module is expected to start for the last time in May 2030.

    Future availability

    Financial strategy and governance starts once a year – in May. This page describes the module that will start in May 2023. We expect it to start for the last time in May 2030.

    Additional costs

    Study costs

    There may be extra costs on top of the tuition fee, such as set books, a computer and internet access.

    Ways to pay for this module

    We know there’s a lot to think about when choosing to study, not least how much it’s going to cost and how you can pay.

    That’s why we keep our fees as low as possible and offer a range of flexible payment and funding options, including a postgraduate loan, if you study this module as part of an eligible qualification. To find out more, see Fees and funding.

    Study materials

    What's included

    You'll be provided with a printed module book and have access to a module website, which includes:

    • a week-by-week study planner
    • course-specific module materials
    • audio and video content
    • assignment details and submission section
    • online tutorial access
    • published articles
    • access to The Open University library.

    Computing requirements

    You’ll need broadband internet access and a desktop or laptop computer with an up-to-date version of Windows (10 or 11), or macOS (11 'Big Sur' or higher).

    Any additional software will be provided or is generally freely available.

    To join in spoken conversations in tutorials, we recommend a wired headset (headphones/earphones with a built-in microphone).

    Our module websites comply with web standards, and any modern browser is suitable for most activities.

    Our OU Study mobile app will operate on all current, supported versions of Android and iOS. It’s not available on Kindle.

    It’s also possible to access some module materials on a mobile phone, tablet device or Chromebook. However, as you may be asked to install additional software or use certain applications, you’ll also require a desktop or laptop as described above.

    If you have a disability

    Alternatives formats of the study materials will be provided, and you will be able to request printed versions of module materials through Academic Services. Any video or podcast resources will be accompanied with transcripts and closed captions.

    Alternatives will also be prepared if you're unable to engage with the tutor group forums. If you use assistive technology or have a hearing or speech impairment and have concerns about accessing this type of virtual environment you can visit the system provider's website for information and contact The Open University to discuss it further before registering.

    If you have particular study requirements please tell us as soon as possible, as some of our support services may take several weeks to arrange. Visit our Disability support website to find more about what we offer.