Corporate Governance: Unethical Practices and Recommendations

C0RPORATE GOVERNANCE 1
Corporate governance
By
[Student’s name]
Course
Institution
Date

C0RPORATE GOVERNANCE 2
Question 1.
Corporate governance is one of the topics which has bothered many organizations all over the
world. The management of Terra Australia Bank (TAB) was noticed of misdeeds among its
planners but they ignored the complaints raised. According to Bloe, the management was
covering for the fraudulent planners who brought a lot of revenue to the organization. The
company's major concern was to maintain employees who brought in more clients and revenues
regardless of the means employed. Don who was sacked was reinstated and even promoted and
the management did not carry out any investigations to establish the truth of the matter. The
behavior of the organization was unethical. The actions of the management continued to attract
more risks to the company as they maintained the fraudulent planners and even protected them
(Phillips, and Lawrence, 2012, p.227). This opened more avenues for the organization to incur
legal fees due to lawsuits between the bank and the affected customers who were about to lose
their lifelong savings.
As the CEO of the company, after numerous customers complain and warning notice from the
industry regulation body Australia securities and investment commission, I would have
commenced investigations so as to establish the truth of the matter as the warning clearly
indicated that 38 planners did not comply with the regulations of the industry and where a critical
risk to the organization. Don ought to have been suspended and only be reinstated after his name
was cleared but Venus accepted Don back so as to scare away clients who were pursuing their
complaints (Jin, et al.2014, p.86). Instead of acting ethically to protect all the interest of
stakeholders, Venus and his management decided to conceal the fraud. Whistleblowers such as
Bloe come forward to raise the alarm of wrong misdeeds in the organization but the management
did not take any necessary action. As the head of management, I would recommend that the

C0RPORATE GOVERNANCE 3
organization employs more risk assessment officers in the organization and also strengthen the
internal controls and internal audit to ensure that operations are carried out according to the laid
down procedures.
Question 2
Remunerations have been one of the major forms of employee motivation in many organizations.
Majority of Terra Australia Bank depended on bonuses and commission and this forced the
planners to try and work extra hard so as to gain more income. This forced the planners to advise
clients to pursue risky investments because the riskier investments had more commission (Gupta,
and Shaw, 2014, p.3). The planners acted for their own benefit and not for the benefit of the
client which should be the case. The management also put a lot of pressure on the planners to
meet their sales target. If the planners failed to deliver the set targets, they were threatened.
Pressuring the employees to meet the unrealistic sales target forced the employees to act
unethically so as to meet the demands of the organization (Adeoye, and Fields, 2014, p.349). The
dishonest culture was brewed in the organization as the end justified the means in this particular
part of the bank. The planners want to meet their basic needs and also want to fulfill the targets
of the organization. People who met their targets in the bank like Don were very valuable and the
firm was not willing to let them go even if numerous clients and whistleblowers had come
forward to complain. To try and solve the issue facing the company, I would recommend that the
employees should be given fixed salaries so that the client can get the best services because right
now the advises given only benefits the planners and clients end up losing their hard-earned
savings because of venturing into risky investments.