Current governance controversies
Commonwealth Bank of Australia is a multinational bank situated in Australia. It has its business across Asia, New Zealand, United Kingdom and the United States. It was founded in the year 1911 under the Commonwealth Bank Act and was privatised in 1996 (Commbank.com.au 2018). It is the leading provider of financial services including investment, retail, premium, funds management, insurance and share-broking products and services.
In the past few years, there has been several controversies against the Commonwealth Bank of Australia. In 2017, the Australian Transaction Reports and Analysis Centre (AUSTRAC) lodged civil proceedings against the Commonwealth Bank of Australia, alleging that they had breached money laundering and terrorism financing laws several times.
Again, in the year 2018, the Bank lost the records of the accounts of almost 20 million users. The data of the user was destroyed by subcontractor Fuji-Xerox in 2016 (The Guardian 2018). The customers were not alerted about the possible data breach, and there was no evidence that the data has been compromised.
Recently, AISC alleged manipulation of bank bill swap rate against the organisation and commenced a legal proceeding in the Australian Federal Court (Commbank.com.au 2018). Another alleged issue was raised regarding the confidentiality and impact on the whistleblower, in recent times (Barker 2017).
Every corporations has their own legal entity. The doctrine of corporate personality was supported in the case of Salomon v Salomon & Co Ltd, which separately identified a corporation to be a legal person. Every corporation has the responsibility to represent itself and its employees in an ethical way for which it needs to set up a standard of conduct (Leipziger 2017). The Commonwealth Bank has an important role in the economies, communities and in the benefit of the stakeholders. To achieve and maintain the cordial relationship between the employees and customers, the organisation is drafting the code of conduct for the employees, addressing the ongoing the issues that the organisation is facing. This will help the corporation to be sustainable and successful (Mitonga-Monga, Flotman and Cilliers 2016). By adopting the codes, the values of the customers would be embraced, and the relationship of trust will be strengthen. It is the utmost importance to comply with the recommendations mentioned in this Code of Conduct.
Code of Conduct for the Commonwealth Bank of Australia, is a framework of the fundamental ethics of the professional members of the corporation, the transparency of the conduct of the company with regard to the fair opportunities, exploitation, corruption, dishonest and fraudulent behaviour, whistleblower protections and enforcement. This voluntary code of conduct sets a standard of good banking practice for the employees while dealing with other employees and the customers. The employers are expected to act accordance with the code of conducts, and adhere to the ethical values.
This Code shall apply to anyone who works at or employed by the Commonwealth Bank of Australia. The Commonwealth Bank of Australia encourages the other banking partners to adopt the similar ethics and conducts. The Code shall have application to a representative within the working hours. In certain circumstances, it shall apply to the employees even outside the immediate workplace, for example, during a work function or activities.
Need for drafting a Code of Conduct for the CBA
The code provides general ethical guidelines and does not cover every conceivable situation that an employee can face. In such circumstances, the employee is expected to act upon their conscience to build and uphold the reputation of the Commonwealth Bank of Australia. Unreasonable failure to comply with the policy framework will be considered as a breach of the code of conduct and will be investigated upon. Such serious breach can lead to a verbal warning as well as termination of the employment.
Giving fair opportunity to every employee is the main aim of the institution. Fair opportunity means equal treatment to every employee in terms of their employment. Discrimination happens when a person is treated less or more favourably in the workplace, based on attribute or characteristic. The favour or attribute includes sex, marital status, age, ability or disability, parental status amounts to discrimination (Triana, Jayasinghe, and Pieper 2015). There may be indirect discrimination relating to a requirement, condition, unreasonable advantages or disadvantages; imposed on a person.
The Commonwealth Bank of Australia provides fair and equal opportunities to the employees in order to inspire and motivate them and to promote their growth and well-being. Employees shall always take into account that any kind of discrimination and violence shall not be permitted. The company expects that the directors, senior executives, and employees shall act with responsibility and ensure that there is no discrimination in the management process of the organisation. The recruitment process should also give equal opportunity and no person should be favoured with extra facilities in terms of recruitment. Termination of an employee should be reasonable and the employee should also be given a fair chance of hearing. Termination should be sensible, justified and transparent (SpA 2016). Any kind of direct or indirect discrimination and breaches of the guidelines shall be considered extremely serious if they affect the statutory obligation of the organisation to provide a safe work environment (Theaustralian.com.au, 2018). Employees must comply with the regulations regarding its operations. Additionally, they shall be bound by the anti-discrimination laws. All the act of the employees and the corporations shall be regulated and made in accordance with the Sex Discrimination Act 1984, Age Discrimination Act 2004, Racial Discrimination Act 1975, Disability Discrimination Act 1992 and Australian Human Rights Commission Act 1986.
It is the purpose of the Commonwealth Bank of Australia to create and maintain a workplace, free from all exploitation. All the directors, executives and employees of the Commonwealth Bank of Australia shall have a commitment to stop misconduct against children and no one shall be subjected to forced labour even they are permitted. Members of the Commonwealth Bank of Australia shall not treat any other member in order to gain benefit from their work, and they are collectively liable for upholding the professional and ethical standards of their work. The members including the Directors, Employees shall act ethically, and respect the human rights of the members. Irrespective of the background, and other characteristics, the inherent qualities and values of the employees shall be recognised, respected and supported. The members are expected to understand and respect the dignity of others and act according to mutual respect (Crane 2013). They will not engage themselves in such an act, which infringes the human rights of others. Non-compliance of the policy can lead to significant legal and financial consequences ranging from warning through to the termination of the employee.
Discrimination
It is the policy of the company to comply with the laws governing corruptions and bribery. Corruption may mean solicitation of bribe, which may be coupled with threat, or not. The bribe may be in cash or kind. Any payment or advantages made to a party who is not properly entitled, shall be considered as corruption. There may be rare situation where one official is subjected to immediate threat to personal safety, where the well-being of the members shall be put in first even considering that it would violate the code of the company. However, in such situation, report of all the circumstances should be made to the appropriate authority. Additionally, anyone having knowledge about happening of such incident in the organisation, shall immediately report it to the authority. Any person infringing the corruption guideline or carrying on such dishonest or fraudulent conduct shall be punished as accordance to the laws (Stachowicz-Stanusch, and Simha 2013).
The company does not allow the acceptance of any unlawful or unethical payment of gifts, hospitalities within the members. The company may allow some facilitation payment on its discretion, but that shall be amount to a business process. The members of the company are not expected to use the information or property of the company for personal benefit.
All the employees should be aware of the policies and his responsibilities of his or her position, and they will be held responsible for the creating a professional, ethical and honest workplace. Fraudulent behaviour involves a behaviour, which is deliberately deceitful or dishonest and abuses the relationship of trust, and results into an unlawful benefit to a person (Lawton 2015). Unauthorised use of the property of the bank, manipulating and falsifying data, making false claim, misrepresentation of the involvement of a person shall lead to a dishonest and fraudulent behaviour (ABC News 2018). Commonwealth will not accept manipulation of the accounts of the customer. Employees of the organisation at all levels shall report any situation or act that may deemed to be a fraudulent and dishonest behaviour. Any employee, who reports to the authority about the fraudulent activities within the organisation, will be protected from the end of the company from any adverse effect to their report, provided that he himself was not involved in that activity.
The Commonwealth Bank of Australia has established whistleblower protection for all the improper conduct, which affects the financial reporting. All the concern related to employment should be reported through the Supervisor, or Human Resource Management. The reported financial information should be accurate and complete, and the employees should conduct legally and ethically. The whistleblower policy of the Commonwealth Bank covers the serious concerns that have a huge impact on the Bank, which are unlawful, leads to incorrect financial reporting, and represents a wrong financial condition of the Corporation. The company requires that if any employee is aware of any ethical, legal and financial reports violation, he or she should report it to the supervisor or an officer. Such report should properly include the facts and evidences, rather than a mere suspicion (Kwok 2017). The corporation shall keep the report confidential and protect the person from any threat or reaction occurring from such report. The organisation shall investigate and review the report properly (De Graaf 2015). The employees are required to respond honestly to any question asked to them for the furtherance of investigation. The investigation committee will prepare a report based on the investigation. They will take action depending on the finding of the report. Identity of the complainant shall be protected, and he shall not be subjected to any reprisal or retaliation (Dixon 2016). Malicious or false reports may result into serious action against him including termination of employment.
Exploitation
The code of conduct of the Commonwealth Bank of Australia shall be communicated to the employees, using the websites, newspaper, letters, handbooks, or bulletin board of the workplace. The code of conduct shall be explained to the employees at the time of hiring. Examples should be given to the employees on the workplace ethics, and mutual relationship in the workplace. The authority shall clarify any qualms related to the code of ethics. The corporation intends to design a reward system for the employees who acts with ethics in the workplace. The organisation shall conduct training of leadership to the managers and supervisors to promote workplace ethics within the employees. Performance of the employees shall be appraised based on the workplace ethics. Annual rewards and recognition shall include workplace ethics. To promote the ethical conduct within the employees, the Commonwealth Bank of Australia shall conduct training and workshop for the employees, in order to maintain a friendly relationship in the workplace. Additionally, employees are expected to report to the authority immediately if he is aware of any situation that violates the code of conduct of the company (Commbank.com.au 2018). Confidentiality of the person shall be maintained by the organisation.
Commonwealth Bank of Australia will, display at the branches, a copy of this code in a visible manner, publish the code on the website, and make the code available by mail if needed. In order to protect the reputation of the workplace the employees should always maintain the codes that is set in the code of conduct.
ABC News. 2018. ‘Breach of trust’: CBA apologises for manipulating children’s accounts. [online] Available at: https://www.abc.net.au/news/2018-05-19/commonwealth-bank-staff-manipulated-childrens-accounts/9779010 [Accessed 21 Aug. 2018].
Barker, A. 2017. Banking royal commission: Speaking out against CBA had ‘horrific impact’ on whistleblower. ABC. [online] Available at: https://www.abc.net.au/news/2017-11-30/banking-whistleblower-jeff-morris-tells-of-horrific-impact/9212536 [Accessed 21 Aug. 2018].
Commbank.com.au. 2018. CBA responds to allegations from ASIC. [online] Available at: https://www.commbank.com.au/guidance/newsroom/cba-responds-to-asic-allegations-201801.html [Accessed 21 Aug. 2018].
Commbank.com.au. 2018. Code of banking practice – CommBank. [online] Available at: https://www.commbank.com.au/about-us/customer-commitment/practices/code-of-banking-practice.html [Accessed 21 Aug. 2018].
Commbank.com.au. 2018. History – CommBank. [online] Available at: https://www.commbank.com.au/about-us/our-company/history.html [Accessed 21 Aug. 2018].
Crane, A., 2013. Modern slavery as a management practice: Exploring the conditions and capabilities for human exploitation. Academy of Management Review, 38(1), pp.49-69.
De Graaf, G., 2015. What works: the role of confidential integrity advisors and effective whistleblowing. International Public Management Journal, pp.1-19.
Dixon, O., 2016. Honesty without Fear-Whistleblower Anti-Retaliation Protections in Corporate Codes of Conduct. Melb. UL Rev., 40, p.168.
Kwok, D., 2017. The Public Wrong of Whistleblower Retaliation. Hastings LJ, 69, p.1225.
Lawton, A., 2015. Developing and implementing codes of ethics.
Leipziger, D., 2017. The corporate responsibility code book. Routledge.
Mitonga-Monga, J., Flotman, A.P. and Cilliers, F., 2016. Workplace ethics culture and work engagement: The mediating effect of ethical leadership in a developing world context. Journal of Psychology in Africa, 26(4), pp.326-333.
SpA, A.E., 2016. Code of ethics and conduct. Santiago.
Stachowicz-Stanusch, A. and Simha, A., 2013. An empirical investigation of the effects of ethical climates on organizational corruption. Journal of Business Economics and Management, 14(sup1), pp.S433-S446.
The Guardian. 2018. Commonwealth Bank admits it lost backup data for 20m accounts. [online] Available at: https://www.theguardian.com/australia-news/2018/may/03/commonwealth-bank-admits-it-lost-backup-data-for-20m-accounts [Accessed 21 Aug. 2018].
Triana, M.D.C., Jayasinghe, M. and Pieper, J.R., 2015. Perceived workplace racial discrimination and its correlates: A meta?analysis. Journal of Organizational Behavior, 36(4), pp.491-513.
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