Business Ethics: AMP Banking Scandal

Business Ethics: 1
Comparative business ethics & social responsibility
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Business Ethics: 2
Business Ethics: AMP Banking Scandal
There are certain issues that are regarded to be potentially controversial in regards to
business practices and policies. Such issues could include; fiduciary responsibilities, corporate
social responsibilities, corporate governance, discrimination, bribery and insider trading. Proper
study of these issues that directly affect the practices and policies of the business is called
business ethics. It is a kind of professional ethics or applied ethics that puts under scrutiny ethical
challenges or ethical principles and morals that could possibly arise in a business environment.
One of Australian main banks, AMP has been under scrutiny of the public and the global
eye at large after it found itself entangled in scandal whereby, it’s being alleged of confiscating
money from its clients whereas there are no services that have been offered at all. This was after
the royal commission got to the ground focusing on Australia’s financial service firms and banks
(Duran, 2018). All this was in attempt to understand why such institutions had been charging
fees to their customers for services not provided. Mr. Regan Anthony who is the former group
executive of advice prompted Kenneth Hayne, the head of the royal commission to a frustrating
edge through his responses after using euphemistic language when he was making his
concession.
Chief executive of the company, Craig Meller however resigned following the wake of
all the shocking and disturbing revelations at the royal commission on banking (Anon., n.d.). He
has however apologized severally. He acted responsibly and in good faith when he said that he
never knew about the behavior but again admitted that he was responsible for the same. He said,
“I do not condone them or the misleading statements made to ASIC. However, as they occurred
during my tenure as CEO, I believe that stepping down as CEO is an appropriate measure to

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begin the work that needs to be done to restore public and regulatory trust in AMP.”
Nevertheless, it is Mike Wilkins who is a former Chief executive of IAG and who joined the
AMP’s board room in 2016 to take the position of Craig Meller but on interim basis however.
The royal commission heard that the financial institution had been continuously charging
fees to “orphan” clients unlawfully and deliberately for three months (Bickers, 2018). There is a
high possibility therefore that the company is mostly likely to face all the criminal charges that
are associated with such undertakings following the hearing by the commission. Last year, an
independent report was presented to ASIC as a follow up to the case. The report is however said
to have gone through numerous versions of draft, 25 to be specific and several changes. This was
done by AMPs senior executive officers and members of its board who are again are said to have
altered significant evidence in attempt to cover up (Verrender, 2018).
More than three hundred and ten thousand customers who are financial advice seekers,
and who had already been charged for no services received have already received compensation
from AMP and the country’s four big banks. The amount that has been paid out to the victims of
the scandal amounts to two hundred and nineteen dollars. AMP began its cooperation with ASIC
in may the previous year and has since then refunded more than fifteen thousand, seven hundred
customers with an amount exceeding 4.7 dollars. AMP however still carries the blame on its
shoulders after it emerged out clearly that its attempts to mislead ASIC were intentional. AMP
executives are shown lying to ASIC officials that the step to charge fees for no service was a
mistake whereas it was a deliberate policy.
The boardroom in charge of the financial institution now has said that initiatives have
already been taken to change the firm’s culture and ethics in attempt to curb occurrence of