ACCT20080_2193 Corporate Governance Assignment

Corporate
Governance
Running Head: ACCT20080_2193 0
Student’s Name

ACCT20080_2193 1
Executive Summary
The principles and rules related to corporate governance are important for each business
as it shows the path to managers to the management of business activities. It also teaches them
how they should behave with their stakeholders. The report is divided into different headings
such as an introduction where the structure of the report along with the overview of the company
is detailed. Commonwealth Bank of Australia has selected an organization for the discussion. In
the next heading, a brief overview of corporate governance in the bank has been mentioned. 80%
of the directors of the bank are independent. Further, the bank provides fixed as well as variable
remuneration to the directors. The board orientation of the bank has been detailed in the next
heading. The applicable theory of orientation is the stakeholder ethics theory due to the majority
of independent directors to satisfy the need of all the stakeholders as well as the issuance of
voluntary disclosures containing corporate governance. As per the belief of legitimacy theory,
CBA seems to be a legitimate origination due to making voluntary discourses related to the
concern of society such as climate change and credit reporting.

ACCT20080_2193 2
Contents
Executive Summary.........................................................................................................................1
Introduction and summary of the company.....................................................................................1
Corporate Governance.....................................................................................................................3
Board Orientation............................................................................................................................4
Legitimacy theory............................................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

ACCT20080_2193 3
“Introduction and summary of the company”
The company selected for the discussion is the commonwealth bank of Australia (the
bank). The motive of the report is to check how seriously corporate governance has been adopted
by the selected bank. The report shall outline a summary of the company and composition of the
board in addition to the summary of its remuneration report. Further, considering the different
kinds of orientation available, the most likely one shall be discussed. In addition to this, it would
also be checked whether the communication that the company used to carry with its
stakeholders. Lastly, a conclusion shall be drawn upon summarizing the key finding of the
report. The stakeholder ethical theory of board orientation has been applied in the report. To
discuss the essential outcomes of the report this is to state that after reading the same, one will be
able to think of an overview of nature, scope, and level of corporate governance adopted by the
bank.
Before moving the discussion to the structure and orientation of the company's board,
first the nature of the business, industry the same is into and recent history is required to know.
The bank is a leading provider of financial service in the country. To become the most accessible
bank of the country, the bank has extensive policies and initiatives in place. The lead
stakeholders of the company are customers, investors, employees, shareholders, and community.
The company provides a variety of loan that also includes home buying facility. The other
services of the company is to provide home insurance, car insurance, life insurance, and others
kind of insurance. To discuss the history of the bank, this is to state that the same was founded in
1911 and started working in 1912 (Rba.gov.au, 2020). At present, the bank has spread its
business to a limit that the number of shareholders is more than 800,000 and several workers are