Role of Corporate Governance in Accounting

ACC302 Accounting Theory 1
ACC302 ACCOUNTING THEORY
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ACC302 Accounting Theory 2
Major Assignment Question
Part A: Case study using ASX listed Companies
1. How Bank Of Queensland And National Australian Bank Disclose Their
Corporate Governance Strategies, Policies And Practices
National Australia Bank corporate governance enables and empowers the company
operations1. In essence, they offer clarity on authorities’ scope, encourages
transparency as well as support compliance. On the other hand, Bank of Queensland
complies with constitution, Corporation Act 2001, as well as ASX Listing Rules that
are reflected in their corporate governance statement. In addition, BOQ conforms to
necessities that are set by Australian Prudential Regulation Authority. BOQ corporate
governance practice is structured into four chief pillars; that is growth right way,
loved like no other, client in charge and there is always better way2. To provide
environment where all workers are treated equitably and fairly, BOQ has adopted
Diversity Policy and Inclusion Policy.
2. Corporate Governance Indicators For NAB And QOB
a) Total number of directors (i.e., board size);
National Australian Bank board of the directors comprises of 9 independent non-
executives directors comprising of chairman, one executive director as well as the
company CEO3. In essence, NAB board of directors comprised of 7 senior executives,
CEO, three non-executives. This makes total number of the board to 10. Conversely,
1 National Australian Bank, National Australian Bank Limited annual report (30th September 2018)
<https://capital.nab.com.au/docs/2018_NAB_Annual_Financial_Report.pdf>
2 Bank of Queensland, Bank of Queensland annual report (31st August 2018) <
https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/2018/FY2018_Annual_Report.pdf >
3 ibid

ACC302 Accounting Theory 3
Bank of Queensland has a total of 10 Board members. This encompassed of nine non-
executives and 1 executive director4.
b) Percentage of the non-executive directors
Generally, National Australian Bank non-executive directors entailed 33% of the female
representation5. Basically, given that NAB board size comprised of 10 members, with only
three non-executives, it means that percentage of non-executives was (3/10*100%) 30%.
Conversely, percentage number of non-executives in BOQ is (9/10*100%) 90%6.
c) Percentage of the independent directors
NAB had nine independent directors. This represents 90% of the bank total board size
(National Australia Bank 2018). Further, the percentage of independent directors in
BOQ for the latest financial year was (9/10) 90%7
d) CEO and Chairman of BOQ and NAB and summary of their
statement
NAB CEO is Andrew Thorburn while the chairman is Kenneth Henry. On the other
hand, BOQ CEO is Jon Sutton while the Chairman is Roger Davis8. According to
NAB chairman statement, trust is considered as the main foundation of the bank
operation. On the other hand, NAB CEO in his statement highlighted that he has
confident that the team would reshape NAB so that it could fit for purpose and offer
exceptional client service anywhere. Besides, the chairman indicated that NAB is
playing a crucial role in the banking sector; hence, by supporting them, the directors
4 Bank of Queensland, Bank of Queensland annual report (31st August 2018) <
https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/2018/FY2018_Annual_Report.pdf >
5 National Australian Bank, National Australian Bank Limited annual report (30th September 2018)
<https://capital.nab.com.au/docs/2018_NAB_Annual_Financial_Report.pdf>
6 ibid
7 ibid
8 ibid

ACC302 Accounting Theory 4
would be assisting it to create more job opportunities9. Further, according to BOQ
CEO and Chairman Statement, BOQ balance sheet has unrelenting to improve with
loaning increment of around $1.5 billion financed by increased mix of the deposits.
Therefore, they indicated that the bank remain confident that it have right tactics in
navigating the competitive financial setting and continue distributing high value for
its shareholders in future10.
e) Percentage of share held by executive directors in NAB and BOQ
NAB has one executive director. This represents 10% of the total directors. On the
other hand, BOQ has one executive director representing 10% of the directors.
f) Percentage of shares held by block-holders as well as institutional
investor in BOQ and NAB
Block-holders as well as institutional shareholders held around 92% of BOQ shares.
Conversely, block-holders as well as institutional investors held 25% of the NAB
shares.
3. Comparison of corporate governance indicators of BOQ and NAB
BOQ corporate governance principles and practices are effective and adequate
compared to NAB corporate governance. Such is reinforced by fact that BOQ
corporate governance principles provide board and management with the risk
reporting which in turn backs additional improvement of a comprehensive corporate
governance practices. Basically, BOQ corporate governances are effective since they
comply with constitution, Corporation Act 2001, as well as ASX Listing Rules that
9 ibid
10 Bank of Queensland, Bank of Queensland annual report (31st August 2018) <
https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/2018/FY2018_Annual_Report.pdf >