Bus320: Corporate Governance & Assessment Answer

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Task:

Executive and CEO nominationis one of the key functions of a corporation’s Board of Directors. During the last few years the Commonwealth Bank of Australia (ASX: CBA) has been immersed in several scandals and this has resulted in managerial and board changes that may feel sufficient to some and insufficient to many.

CBA has been recently fined by ASIC (Australian Securities and Investment Commission) for advice given by five former CBA financial planning representatives to up to 3,500 customers who lost significant amounts of money.

Recently, as well, money laundering allegations were raised against the bank which has resulted in a ‘massive class action, potentially worth hundreds of millions of dollars for a drop in the share price following the accusations.Apparently, the bank (CBA) breached anti-money-laundering and terrorism finance laws [….and] top executives at the bank, including outgoing chief executive Ian Narev and current board chairwoman Catherine Livingstone, have been singled out in the class action as knowing about the compliance issues but failing to act.’ (Hancock 2017).

Changes to the management and board structure of the bank were required, but these changes delivered more of the same in the way or retaining the status quo and culture of CBA.

This story has many layers and you are free to investigate any layer you feel more passionate about that relates to the CBA recent actions, culture, the new CEO appointment by the board etcto ascertain whether the Board of Directors has acted ethically or not.

For that purpose, you must provide a background summary that presents sufficient information about the aspect you want to investigate followed by an identification of the stakeholders involved and providing a stakeholder strategic analysis. Later you will need to assess the decisions taken by the board by comparing them against the Australian Stock Exchange principles and recommendation and by discussing any board formation issues discovered during your analysis.

Finally, you will need to

1. Provide arguments based ona “sufficient number”of theories of Corporate Governance, Corporate Social Responsibility (CSR) and/ or Creating Shared Value (CSV) to justify or criticise the actions and decisions taken while under the control of the board of directors.
2. Analyse these decisions and actions using ethical as well as justice and economic distribution theories.