Case study

You are a financial analyst asked to provide your assessment of an investment portfolios risk exposure, and to specifically assess the risks of two different companies in two different industries. You will be provided some basic information on each business to inform your analysis.

Conventional Food Corporation (CFC)

CFC is a food distribution company that sells their own proprietary brands produced by private label manufacturers. They have three product categories, including branded bottled beverages, produce, and baked goods. Their distribution network heavily relies on third- party subcontractor drivers, totaling approximately 65% of their total drivers. The extent of their current ESG efforts include donating baked goods to bake sales at local schools and employee volunteerism days. Information on these efforts is anecdotal in nature, written in single sentences on their website.

Question:

How to lower the risk of governance for Conventional food corporation (CFC) ?

Downtown Developers Inc. (DDI)

DDI is a commercial real estate development corporation that has had great success in providing mid-priced, premium office space to up-and-coming tech start-ups in metropolitan areas. Their largest project to date has been a downtown office park in a hip tourist neighborhood that brushes up against near the coastline. DDIs construction labor force, primarily comprised of recently immigrated new citizens, live inland from the coastal construction site, and rely on public transportation to get to the construction site each day. DDI knows tech companies think sustainability is important, and to satisfy their customers, they plan to install LED lights in all the new units of the office park. Their website mentions eco-friendly building supplies and appliances as demonstrative demonstration of their commitment to sustainability.

Question:

How to lower the risk of governance for Downtown Developers Inc. (DDI)