Corporate Responsibility and Governance Structure of Commonwealth Bank

This report critically examines the corporate responsibility, ethics, and governance structure of Commonwealth Bank. It discusses the policies, procedures, practices, systems, rules, and regulations that guide, monitor, and control the organization. The report also examines the company's approach to human rights, stakeholders, and the environment.

Running head: REPORT 0
Corporate responsibility
JUNE 18, 2018

REPORT 1
Introduction-
The corporate Responsibility and governance structure are very significant facet of any business
as they support in recognizing problems and permit the corporation to reimburse to all the
stakeholders of the company and the society. The corporate responsibility, ethics and governance
structure not only support in maintaining a great loyal customer foundation, but are also
important for long term development, future progress and achievement. These activities support
the inside relations with the workforce of organization.
The corporate social responsibility is not only limited to the appropriate ecological practices, but
it expands to arranging all values of company with the objective of consumers, workers,
depositors, dealers, supervisors, managers and the general public (Zientara, 2017). The
worldwide significance of corporate social responsibility can be simply outlined by the many
international corporations created for the same, which are frequently defining the subject matters
regarding corporate social responsibility and ethical responsibilities of corporations (Katamba,
et. al, 2012).These corporations are Global Reporting Initiative, the Organization for Economic
cooperation and development, the UN Global Compact, the World Business Council for
Justifiable growth, and the International Organization for Standardization.
In this report, various aspects of the corporate social responsibility, governance structure and
ethics of Commonwealth Bank is discussed and critically examined.
Corporate social responsibility
The Corporate governance structure means policies, procedures, practices, system, rules and
regulations which guides, monitors and controls the organizations. The corporate social

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responsibility is mainly the structure of policies, rules, regulations and practices which allows the
board being clear, fair and responsible (Tricker, 2015).There are many aspects of the corporate
governance structure such as nation, citizens, roles, policies and frameworks. Every organization
has internal and external stakeholders. The company is responsible for the satisfaction of internal
and external stakeholders. The corporate responsibility refers to the way for the organizations to
fulfill the responsibilities for common and environmental impacts of the operations of business.
The main objective of company is to develop, make and render the services and goods. The
corporate social responsibility forms the filter for the company’s action. CSR makes the
organizations responsible and ethical.
The company selected for the assessment is Commonwealth Bank. Commonwealth Bank of
Australia is multinational bank. The commonwealth bank does business across the world such as
New Zealand, USA, Asia and United Kingdom. Commonwealth Bank renders the financial
services such as insurance services, fund management, retail, banking services, deposits and
banking services. It is largest listed organization in Australia on Australian security exchange at
August, 2015. It involves brands such as Bank west, Colonial first state investments, ASB Bank,
Commonwealth insurance and Commonwealth securities. The main purpose of this report is to
examine the procedures of Commonwealth Bank in respect of corporate governance structure,
ethics, corporate social responsibility and application of these practices in proper manner.
There are many models have been established from past ages to review the corporate social
responsibility structure of an organization. These are two types of models which have been used
to examine the actions and corporate governance structure of the corporate social responsibility,
are Carroll’s Pyramid and Wartick and Cochrane’s Typology. Archie B. Caroll had established
the Pyramid of corporate social responsibility, to examine the corporate social responsibilities

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and common matter in the board (Schwartz, 2011). The system is based on the meaning of
corporate social responsibility given by Archie B. Caroll himself. It has been held by Caroll that
corporate social responsibility actions of an entity is restricted within four types of opportunities
for the society such as fiscal, legal, ethical and discretionary.
A corporation has to be economically liable by giving the excellent goods at reasonable prices to
the society and by making incomes. Also the board of company is required to maximize the long
term financial proceeds to the company’s shareholders. The financial advantages can be
inspected by the stability of value of share in the share market and distribution of the incomes as
cash dividend (Reuters, 2018).
The commonwealth bank has an important role in economy. The company has a legal
responsibility. It deals with compliance with laws, rules and regulations. Commonwealth bank
makes report on commitment to responsible tax payers and action of highest honesty in comply
with tax laws. It also recognizes the human rights and supplier compliance with the international
human rights laws (Commonwealth Bank, 2018).
Ethical responsibility means implementation of ethical principles and engagement in moral
activities. The common wealth bank promotes ethical behavior and positive customer behavior.
The ethical standards comply with independence and ethical requirements. The relevant
requirements include confidentiality, integrity and objectivity (Commonwealth Bank, 2018).
The philanthropic responsibility deals with the contribution in the social issues and development
of the environment of the company. The corporate responsibility is essential not only for own
people and community partners but also for clients, depositors and stakeholders. Commonwealth

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bank creates the work place that reflects communities where company operates need of the
customers.
Wartick and Cochrane’s typology is other model for the study of the corporate social
responsibility function of the company. The Wartick and Cochrane made this three dimensional
model named as Corporate Social performance Model in 1985, consisting three factors such as
the issue of social difficulty, the social responsibility’s kinds and the corporate reaction’s scope
(Morrison,2015). Wartick and Cochrane model is motivated from pyramid of Caroll. The
Wartick and Cochrane model recognizes social matters, problems and the corporate activities in
this respect. The commonwealth bank has established corporate social responsibility standards
which are link with the Performance Standard of International Finance Corporation on
Environment and Social Sustainability. The corporation involves in social assessment and
financial assessment to understand the effects of the actions of business and lessening of negative
assessments on the society through the all stages of the procedures (Pascoe, 2016).
Stakeholders of the company-
The commonwealth bank has variety of forums committed to advancing stakeholders. It involves
external stakeholders such as chief executive officer external advisory panel, customer advocate
community council and original advisory council. The stakeholders inside the company include
community affairs stakeholder council and opportunity initiatives council. The stakeholder group
majorly involves customers, employees, investors, suppliers, charities, community organizations,
non-governmental organizations, service providers, academics, media and regulators (Moon,
2014).

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Environment of Commonwealth Bank-
Commonwealth Bank is committed to protecting the environment of the society and the natural
resources for the sustainable use. The company is associated with the new water conservation
initiative with popular Economizer Home Loan that could potentially contribute up to $3 million
in spending on the water saving devices by bank. The company knows that their operations are
creating direct or indirect impact on the environment. This makes the company to follow the
environment policy in which they can manage the direct and indirect environmental impacts. The
bank is currently contributing in the global transition so that they can reduce the carbon emission
by the year 2050. Bank knows that most of the operations affect the environment due to which
they keep monitoring and reporting the progress of initiatives and steps taken by them for
protecting the environment. Commonwealth bank has engage PWC for the independent audit of
the non-financial metrics that include environment, customer, social and governance metrics
(PWC, 2018).
Human rights-
The method to human rights is essential to the vision of the commonwealth bank group to
safeguarding and improving well-being of individuals, businesses and communities. The human
rights statement confirms liability and commitment to respect human rights. The ESG risk
assessment process is good step for the protection of human rights. It makes focus on the some
key areas such as health, safety, energy, pollution, labour, human rights, anti-corruption,
governance and water. It is the good step to stop corruption. The Commonwealth Bank is
connected with United Nations Global Impact (UNGC). It communicates progress on the UNGC
principles such as human rights, labour, anti-corruption matters and environmental issues. Thus
the company is maintaining good record on the adherence of human rights. The company has

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made approaches to the corporate responsibilities to stop inequality and the poverty. These
approaches are based upon the customer experience and financial responsibility. Thus company
maintains good record of ethical management of people by providing educations, training and
using innovations. There is no existence of any unethical marketing practice because of good
corporate structure (Jamnik, 2017)
Governance structure of company-
The governance structure of Commonwealth Bank as defined in the Annual Report, 2017. It
contains various parties with following responsibilities-
1. Board- The board of company is liable to form corporate responsibility strategy and to
monitor the effectiveness of strategy. It is also a responsibility of board to approve ESG
disclosures in the annual report of company.
2. Executive committee- The executive committee guides the development and application
of the corporate responsibility strategy and ESG risk assessment policies. It also makes
sure proper ESG governance in the appropriate place.
3. Business units- It is a duty of business unit to integrate ESG considerations, risk of
business and opportunities in the business. It also monitors the ESG progress,
performance and the reporting.
4. The corporate responsibility team- The corporate responsibility team gives the strategic
advice to the company. It also facilitates the ESG governance and ESG reporting
internally and externally.
5. External Advisory Panel-The External Advisory Panel is managed by chief executive
officer along with four members of the Australian community. The purpose of External

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Advisory Panel is to render the structured input and consider the issues such as advocacy,
education and the diversity.
6. Opportunity Initiatives Council- Opportunity Initiatives Council includes senior staff
designated by executive committee (Carroll and Buccholtz, 2014).
Community
Commonwealth bank is keeping promoting and helping the community due to which they have
the positive record for the support of community. The bank is aware that they take the support
from the community due to which they give back to community in terms of benefits. The bank
made the investment of $16 million for providing education facility in 2017. Commonwealth
bank also provides the assurance to the females in the senior management role. In addition, it
provides assistance to more than 5,000 workers to helper in 264 domestic and global community
organizations (Commonwealth Bank of Australia, 2017).

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(Source : Commonwealth Bank Of Australia, 2017)
Conclusion
As per the above analysis it can be concluded that the corporations must have social
responsibilities. The corporate social responsibility is considered as heart and soul of company. It
keeps honesty of moral foundation both inside and outside the company. The corporate social
responsibility used as shorthand for business contribution to sustainable growth. CSR has a key
role in the affairs of the company. Many issues related to development such as education, health,
medical, child labour, corruption, poverty, are centralized around the corporate social
responsibility in corporation. The corporations having social responsibilities earn more profits
and other benefits. Thus CSR should not considered as an act on the behalf of rich big
corporations but it is required to be treated as moral obligation on their behalf. As per the
corporate social responsibility policy of Commonwealth Bank, it can be concluded that the
corporate social responsibility activities help in maintaining brand name worldwide.

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Reference
Carroll, A. B., and Buccholtz, A. K. (2014) Business and Society: Ethics, Sustainability, and
Stakeholder Management. 9th ed. Boston, MA: Cengage Learning.
Commonwealth Bank of Australia (2017) Commonwealth Bank of Australia’s 2017 Corporate
Responsibility Report: Strengthening Our Investment 9n Education [Online]. Available from:
https://www.commbank.com.au/guidance/newsroom/2017-Corporate-Responsibility-Report-
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Commonwealth Bank. (2018) Sustainable Development Report 2017. [online] Available from:
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Jamnik, A. (2017) The Challenges Of Business Ethics: The Basic Principles Of Business Ethics -
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