Corporate Governance of Commonwealth Bank of Australia

Running head: CORPORATION LAW
Corporation Law

CORPORATION LAW 1
Contents
Introduction................................................................................................................................2
Question 1..................................................................................................................................2
Corporate Governance of Commonwealth Bank of Australia...............................................2
ASX Principles and Recommendations.................................................................................3
Poor Governance....................................................................................................................3
Duties Breached.....................................................................................................................4
Question 2..................................................................................................................................4
Importance of Corporate Governance principles...................................................................4
Corporate Governance Theories............................................................................................5
Agency Theory...................................................................................................................5
Stewardship theory.............................................................................................................6
Conclusion..................................................................................................................................6

CORPORATION LAW 2
Introduction
This report will focus on the corporate governance of the Commonwealth Bank of
Australia. The Commonwealth Bank has stated their corporate governance in their annual
report where they had mentioned that they have complied with all the principles and
recommendation of ASX. Recently an inquiry conducted by the Royal Commission where
several banks governance has been found to be in question and in that one of the bank is
Commonwealth Bank. Royal Commission has detected various conduct of the
Commonwealth Bank doubtful. The director duties towards the organisation and the laws of
the Corporations Act that has breached will be discussed in this report. The importance of
corporate governance and the principles lay down by the ASX. It is required for a listed
company to follow the ASX principles or it can lead to the legal, social, economic and
political implications. The two theories of the corporate governance that will show the views
on the corporate governance and how the Commonwealth Bank of Australia has failed to
comply with these duties.
Question 1
Corporate Governance of Commonwealth Bank of Australia
The corporate governance is the art of directing and controlling the organisation. The
commonwealth Bank had also published the corporate governance of their company in their
statement. The commonwealth Bank has the goal is to create and maintain the good relation
with the customers by improving their economic conditions. The company has also stated
there in their statement about the relations with the stakeholders. The company also talks for
the good governance inside the corporation by the implementation of the code of conduct in
the organisation. The Bank in their statement has stated about the policies need to be made
easier simpler to understand for strengthening the governance of the organisation. The bank
had made strict laws to mark a stop mark on the bribery and the corruption. The bank had
made the laws to stop the human trafficking in their supply chain and in their business. For
minimising the financial and the non-financial risks, the bank has implemented the risk
management policies. The bank AGM is rotated between the capital cities of Australia so that
maximum of shareholders can attend the meeting. The bank had made certain policies from
which the cooperation between the management and the shareholders that can be improved.