Ethics Audit of AMP Limited: Evaluating the Code of Ethics and Social Responsibility Policies

This report evaluates the ethics audit of AMP Limited, a banking corporation in Australia, using a descriptive and analytic framework. It analyses the impact of management decisions on stakeholders, social responsibility policies, and the code of ethics implemented by the company. Based on the analysis, recommendations are given to assist the company in conducting its operations in an ethical manner.

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Professional Ethics

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Table of Contents
Introduction...............................................................................................................................2
AMP Limited...............................................................................................................................3
Public policy/Regulatory issue...............................................................................................3
Stakeholders...........................................................................................................................4
Social Responsibility...............................................................................................................4
Code of Ethics and Ethical Organisational Culture.................................................................5
Reflection and Preliminary Analysis...........................................................................................6
Conclusion and Recommendations............................................................................................8
References..................................................................................................................................9

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Introduction
The objective of this report is to evaluate the case of AMP Limited which is a banking
corporation situated in Australia. This report will use a descriptive and analytic framework in
order to conduct an ethics audit of the company. The structure of this report will focus on
describing the company and the key economic/political environmental factors which
influence its business. Stakeholders of the company and the impact of management
decisions on them will be analysed in the report as well. The social responsibility policies
implemented by the company will be evaluated in this report as well along with evaluation
of code of ethics implemented in the company to determine whether they align with the
community views. Based on this analysis, a reflection and preliminary analysis will be given
in the report. Lastly, a conclusion will be drawn, and recommendations will be given for the
company which can assist the company in conducting its operations in an ethical manner.

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AMP Limited
AMP Limited or AMP is a leading banking organisation in Australia which offers its
services in banking and financial services. The company has established its operations in
Australia and New Zealand. The company offers a wide range of finance-related services to
its customers that include savings account, superannuation, home loans, banking products,
investment products and many others (AMP, 2019a). Although the corporation has
established a positive brand reputation in the market; however, the company has been in
controversies due to its failure to comply with regulatory and ethical compliances. There are
many external and internal factors which affect the operations of the company and create
challenges in relation to conducting its operations in an ethical manner.
Public policy/Regulatory issue
There are many public and regulatory issues which AMP and its management have to
comply with while taking business decisions. A good example is introduction the Banking
Royal Commission which is focused on finding misconduct in banking, superannuation and
financial services industry. The introduction of the royal commission has found that the
banking companies in Australia have failed to comply with various guidelines which they are
required to meet in order to meet the community standards (Lockhart, 2014). This
commission focuses on ensuring that corporations conduct their operations honestly and
fairly while complying with the guidelines issued by the Corporations Act 2001 (Cth)
(Palmere, 2013). The economic environment in Australia supports the growth of AMP;
however, it has also brought challenges for the company in the form of competitors. The
main competitors of the company include Westpac, Commonwealth Bank, NAB, ANZ and
others (Joshi, Cahill, Sidhu & Kansal, 2013). New policies implemented by the Australian
government affects the operations of AMP such as introduction of new policies of paying
bank staff. For example, the government has separate bonuses from salary targets due to
which the costs of companies have increased. Moreover, a new Banking Code of Practice
has enforced guidelines on banking corporations in relation to high standards of conduct
(Pash, 2018). These new policies are approved by the ASIC (Australian Securities and
Investment Commission) based on which the companies have to strictly comply with them.

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Stakeholders
The stakeholders of a company are referred to those parties that are affected by the
operations and decisions of the company (Voinov et al., 2016). The primary stakeholders of
AMP Limited include employees, partners, shareholders, vendors, customers, and
management. The secondary stakeholders of the company include governmental
authorities, competitors, government, media, regulators, general public and the
environment (AMP, 2018). Most stakeholders of the company have a common view which is
to ensure that their deposits and investments are protected in the bank. They expect the
banking corporations to conduct their operations in an ethical manner to ensure their
monies are secured. The way AMP conducts its business has a significant impact on its
stakeholders. If the company engages in unethical practices, then the money deposited or
invested by the customers are at risk (AMP, 2019b).
The clients who receive financial services from the company can lose their
investment, and they can face a loss. The value of shareholders either goes up or down as
per the decisions of the management of the company. The board of directors could be held
personally liable for the actions of the company if they failed to comply with the duties
given under the Corporations Act (Redmond, 2012). The environment is also affected due to
the emission of the company. The decision taken by the management to support those
companies which exploit the environmental resources leads to negative impact on the
environment and its resources (Oh, Park & Ghauri, 2013). Therefore, the corporation has to
maintain a balance between the interests of its stakeholders to ensure that they did not
violate their interest.
Social Responsibility
Social responsibility is referred to an ethical framework which provides that
organisations and their management have an obligation to consider the interest of society
at large while taking business decisions (Cheng, Ioannou & Serafeim, 2014). The concept of
social responsibility has gained popularity as the importance of corporate social
responsibility (CSR) becomes prominent between organisations. The companies adopt a CSR
structure in order to comply with basic guidelines which guide them to ensure that they
maintain a balance between the interest of their stakeholders and it also imposes an

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obligation on the management of the company (Aguinis & Glavas, 2012). In the case of
AMP, social responsibility is imposed on the company to ensure that the interest of its
stakeholders is fulfilled. The corporation is a major part of the banking sector in Australia
based on which the management has to ensure that it conducts its operations in an ethical
manner. For example, if the company violates the guidelines issued by the ASIC, then it can
face legal penalties. The management of the company has implemented corporate
governance policies in the company which provides that the company focuses on long term
performance and sustainability (Fernandez-Feijoo, Romero & Ruiz, 2012). The Constitution
of the company has outlined various rules which govern the operations of senior-level
executives while they govern the operations of the company.
Under the corporate governance policies of the company, various diversity policies
are introduced which are targeted on promoting diversity in the company. The company has
also included market disclosure policies under which the management has to disclose the
actions taken by them to protect the environment and the interest of other stakeholders
(CAMP, 2019c). Whistle-blower policies are also included in the corporate governance
structure of the company to ensure that the employees have a safe platform where they can
complain about the actions of senior-level managers of the company. A recent investigation
found that the company has lied in more than 20 occasions to corporate regulators in which
the senior level management lied to avoid penalties (Ferguson, 2018). The company was
also found guilty of interfering with the ‘independence’ of the audit in order to hide relevant
information from its shareholders. The management of the company was aware of these
incidents; however, they figure that paying the penalty will be cheaper for the company. It
shows that the current practices of the company and its management did not align with the
community view in relation to conducting the operations in an ethical manner.
Code of Ethics and Ethical Organisational Culture
In order to comply with ethical policies, AMP Limited has implemented a code of
conduct in the business which guides the actions of the management of the company. As
per this code of conduct, the corporation imposes legal and ethical obligations on its
management to ensure that they did not violate their duties. This code sets out the
behaviour of employees in the company, and it is supported by employment policies to

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ensure that the company is able to best serve its customers. As per this code of conduct, the
company and its management commit to act professionally with honesty and integrity
(AMP, 2019d). The senior-level executives value differences and create a safe working
environment for its employees. The company identify conflict in the workplace and manage
it accordingly. The corporation also respects the privacy and confidentiality of the data of its
user. The company also comply with legal and regulatory obligations in order to discharge
its duties with high standard of care. However, there have been many incidents when the
company did not comply with these guidelines and its management acted in an unethical
manner.
The behaviour norms of the top level executives in the company did not align with
organisational practices. For example, the management of the company agreed to violate
the guidelines issued by the ASIC and other regulators by blatantly lying to them because
they considered that it would be easier and profitable to just pay the penalties. The Banking
Royal Commission found that the senior executives of the company acted in an ethical
manner while interfering with the independence of the audit completed by PwC
(Chanticleer, 2018). It shows that the company and its executives did not act professionally
with honesty and integrity. When a whistle-blower of the company reported the unethical
practices to the CEO of the company, then the CEO did not get back to her and told her to
avoid interfering with these issues. Moreover, the company failed to protect the privacy of
its employees because the private data of over 50,000 employees were leaked in a recent
cyber-attack (Zhou, 2017). It shows that the company did not comply with its code of
conduct and its management avoids complying with relevant policies to ensure that they
conduct their operations ethically and honestly.
Reflection and Preliminary Analysis
Based on analysing of the case of AMP Limited, it can be seen that although the
company has implemented a corporate governance structure; however, its management did
not comply with these policies. These policies are not strictly followed by the management
since they are easily avoided by the management. The incidents such as blatant lying to the
corporate regulators, interfering with the independence of audit and failing to protect the
private data of employees negatively affect the goodwill of the company (Ferguson, 2018).

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The degree of awareness which the management of the company has regarding the impact
of the actions of the company on its stakeholders is less. There is distrust between the
employees and the management due to lack of effectiveness of whistle-blower policies in
the company. The potential risks which are faced by the company if these issues are not
addressed accordingly include distrust with the customers, imposition of penalty by the
government, punishment to the senior executives and others (Hurley, Gong & Waqar,
2014). In case the company did not improve its procedures, then it will find it difficult to
retain customers in the company since their rights are affected by the decisions of the
management of the company.

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Conclusion and Recommendations
In conclusion, an ethics audit of AMP Limited provided that the ethical policies
implemented by the company are not appropriate to ensure that the management
discharges their duties in ethical manner. The key stakeholders of the company such as
customers, government, management and shareholders are affected by the decisions of the
management of the corporation. There are many incidents in which the company and its
management have violated ethical policies while taking business decisions. Based on these
factors, it is recommended that the corporation should improve its CSR structure in order to
impose obligations on its management to ensure that they comply with its code of practices.
Effective CSR structure will result in increasing transparency in the operations of the
company which will make it difficult for the management to act unethically. Moreover, the
company should include a statement in its annual report in which the management should
disclose the actions taken by them in order to discharge their social responsibilities. The
management should improve whistle-blower policies which will allow the employees to
complaint regarding operations of the senior level executives in the company. These
recommendations will assist the company in sustaining its future growth by complying with
ethical policies.

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References
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responsibility: A review and research agenda. Journal of management, 38(4), 932-
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AMP. (2018). Reports. Retrieved from
https://corporate.amp.com.au/shareholder-centre/results-reporting/reports
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history
AMP. (2019b). Our customers. Retrieved from
https://corporate.amp.com.au/about-amp/corporate-sustainability/environmental-
management
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amp/corporate-governance
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global/AMP-employee-code-of-conduct.pdf
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