- Internal Code :
- Subject Code : CGRM4000
- University : Kaplan University
- Subject Name : Corporate Governance
Corporate Governance, Sustainability and Ethics
Ans 1. The corporate governance framework of the company sets its Board as a responsible factor for setting the objectives that are strategic for the Commonwealth bank. The board of the company is also responsible for the risk appetite of the company. According to the corporate governance framework of the bank, the board will be leading the culture, values, and behavior of the people. The appointment of the Chief Executive officer of the company and the Managing director of the Bank is done by the board of directors. The boards also look upon the performance and management and the framework of governance of the bank (Corporate governance statement 2019). The Board has also reserved certain powers in the matters of law as Charter of Board.
Certain powers have been delegated by the board to its committees. Also, it is at the discretion of the board for committees for taking certain specific duties (Bandara et. al. 2019). The powers holed by the CEO are conferred by the Board for the management of the bank.
The CEO of the bank then has many delegates. There are Group executives and various other officers. Irrespective of the delegations CEO is the person who is held accountable in front of the board for the performance of the management and the powers that have been delegated.
The team of executive leaders formed a Non-Risk financial committee. This committee acts as an advisor and also assist the CEO in the procedure of effective governance and management. The following depicts the framework:
(Source: Corporate Governance Report, 2019)
Ans 2. Discrimination: To avoid discrimination the company has a policy of Diversity and Inclusion. The principal of the policy is to make the workplace safer and also inclusive. The company’s employees and senior leaders are supposed to follow the principle and create an environment that is safe for all (Commonwealth Bank code of conduct 2019). Under this policy the flexible practice or work is followed and everyone is supposed to be free from discrimination, bullying, and harassment. According to the charter of the Board, it is the responsibility of the board for setting and approving the diversity and inclusion policy.
Exploitation: The Company has a policy regarding Slavery and Human trafficking. In the year 2019, the company published its report regarding that and mentioned that the company respects the human rights as described in the International Bill of Human rights, International Labor organization declaration on the Fundamental Principals and Rights at work. The company strives for understanding human rights and improving them. Also, the company makes sure that its working requirements are met by the UK Modern Slavery Act. Also, the company is planning for the introduction of Australian and NSW modern slavery legislation (Corporate Governance statement 2019). The company from the year 2020 has planned to comply and disclose the progress with regards to the legislation of the Act.
Corruption: The bank has an Anti-Bribery and Corruption code for the matter. The organization is committed to zero tolerance of bribery, facilitation payments, and corruption (Managing fraud risks 2019). The framework for the same has been created that:
- Acknowledges formally about the seriousness of bribery and corruption.
- Also, it prohibits the bribes or any other benefit to the officials of the public.
- Identifies the risks that are potential and suggests appropriate controls for offering or accepting the gifts. Any sort of entertainment and hospitality is also identified under the conduct.
- It requires that all parts of the organization identify and understand the corruption and bribery risks that are relevant considering the operations and for that appropriate controls are implemented.
- Also it outlines the procedure or the requirements for escalating and reporting the Anti-Bribery and Corruption policy breaches.
The breaches that take place concerning materiality are supposed to be reported to the board. The company follows them strictly and tries to make sure that corruption does not happen in the organization.
Dishonest and Fraudulent behavior: The Commonwealth bank follows a policy for fraud. The company does not tolerate any fraud and has committed to promoting and maintaining the sound and ethical culture for the business. The company has a compliance of monitoring. All the heads of business are supposed to identify and manage the fraud risk for protecting the base of customers, reputation and assets. The employees, temporary staff or service providers are required by the company to:
- Report the allegations or any suspicions or the detection of fraud.
- They are required to make sure that the relevant policy of fraud, standards, procedures, and guidelines are followed.
- Also, the training for security and fraud should be completed promptly.
Also the company as a fraud risk assurance program to monitor the policies and implement the compliances.
Protection for Whistleblowers: The bank has a culture that encourages and promotes the people to speak on the matters that concern them (Pearce and Pelka 2019). The policy for whistleblower protection outlines the safety that is provided to the whistleblowers from any victimization, retaliation also including the termination and harassment in the company. The company has
- A protection officer of whistleblower. The role of the person is to oversee the protection of the people.
- A committee of misconduct governance that sees the effectiveness and the methods of governance for the program of whistleblowers.
- A service for the speak-up that includes telephone, online, and email. This provides an avenue for raising a concern and still maintain the anonymity.
The material that has been found through whistleblower is reported to the Audit Committee.
In my assessment the policies are adequate as the group has undertaken every measure so that a healthy work environment can be created. The company has an internal audit committee and an external audit, internal audit has a reach in all areas and functionality of the company. This provides a benefit to make sure that the code of conduct is being followed. Also, in the external audit, the fraudulent activities can be found. These things make sure that the policies are enforced properly in the organization. This brings in an atmosphere that is healthy for the people to work.
Ans. 3: The values of the group are as follows:
- We do what is right
- We are accountable
- We are dedicated to service
- We pursue excellence
- We get things done (Commonwealth 2019).
It is right for the company to create an environment that includes all. For this purpose, the company has a policy for inclusion and diversity (Podgor 2017). This includes all and is not centered with "I". That is what the company expects out of this value. The question to be asked is Should we rather than should I. Inclusiveness follows the same.
The company follows the policy of Anti-corruption and bribery. This makes people accountable for what they do (Ni and Su 2019). They act in a manner that is expected rather than providing extra benefits or leisure to the people known. Even being at the position of power, bribe or dishonest behavior should not be undertaken by the employees or that will bring strong actions against them. In this manner the company makes everyone accountable for what they do.
For the value of dedicated services, the Dishonest and fraudulent behavior of employees is not tolerated. This will in turn hurt the customers of the bank and for banks their customers are at utmost priority. To provide them the best services and also to the community they are operating in, the group needs to provide them the services that involve no risk with their money. For that purpose fraudulent activities in the organization need to stop. This will create value for the organization.
The company believes in pursuing excellence. This value is reflected in all the standards of the company (Glauner 2017). For every stated standard the company has made provision in a manner that the activities are not conducted in the Bank. They have an audit committee for the check. Also, the policies have descriptions about the things that will be considered as corruption or fraud. Even for the protection of whistleblowers they have set a committee and also have a procedure for keeping the identity anonymous.
Also, the company believes in getting things done. The policies made are implemented and checked by the audit committee. Also, the company keeps reviewing the policies on a yearly basis and makes sure that it follows all the laws that are prevailing in the company.
Thus, the values of the company are reflected in the policies. There are various ways in which the company has made sure that its values are reflected in the policies (Dermol and Sirca 2017). The various acts or the policies are in par with the values. The Code of conduct of the company is made according to the laws and the company is striving for better growth by making sure that it delivers the value that has been stated. Anti-bribery or corruption, whistleblower protection includes the protection of its customer, and the company is trying to create value for them. This depicts that the company is trying to inculcate its value in every action and in every policy it makes.
References for Commonwealth Bank
Corporate Governance Statement. 2019. Available at: https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/corporate-profile/corporate-governance/corporate-governance-statement.pdf. [Accessed on 14 May 2020]
Bandara, W., Meredith, J.C., Techatassanasoontorn, A., Mathiesen, P. and O’Neill, D., 2019. Mechanisms for creating successful BPM governance: Insights from Commonwealth Bank of Australia. Available at: https://eprints.qut.edu.au/131954/. [Accessed on14th May 2020]
Commonwealth Bank code of Conduct. 2019. Available at: https://www.commbank.com.au/content/dam/commbank-assets/about-us/2018-09/CBA-code-of-conduct.pdf [Accessed on: 14th May 2020] Managing fraud risks. 2020. Available at: https://www.commbank.com.au/about-us/opportunity-initiatives/opportunity-from-good-business-practice/sustainable-business-practices/managing-fraud.html [Accessed on: 14th May 2020]
Pearce, D. and Pelka-Caven, H., 2019. Corporate law: New protections for corporate whistleblowers. LSJ: Law Society of NSW Journal, (61), p.71.
Annual Report. 2019. Commonwealth Bank. Available at: https://www.commbank.com.au/content/dam/commbank-assets/about-us/2019-09/cba-annual-report-2019-spreads.pdf. [Accessed on: 14th May 2020]
Podgor, E.S., 2017. Recognizing Inclusiveness. UMKC L. Rev., 86, p.577.
Ni, X. and Su, X., 2019. Institutional Anticorruption in China: Effectiveness on Bribery Incidence. Public Administration Review, 79(4), pp.538-551.
Dermol, V. and Širca, N.T., 2018. Communication, company mission, organizational values, and company performance. Procedia-Social and Behavioral Sciences, 238, pp.542-551.
Glauner, F., 2017. Corporate Values: The Third Systemic Factor for Excellence in Enterprises. In Values Cockpits (pp. 27-32).
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