Corporate Governance and Risk Management in Commonwealth Bank of Australia

Corporate Governance and Risk Management 1
CORPORATE GOVERNANCE AND RISK MANAGEMENT
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Corporate Governance and Risk Management 2
Introduction
The aim of most commercial organization is to make profits within the boundaries of its
values (Christensen and Kent 2016) and for some multinational companies these values might
vary but they are consistent across the areas they carry out their operations. To determine
whether the company adheres its policies or the vales that it has set and that they are recognized
globally, a governance and risk management audit is carried out.
A governance and risk management audit is an activity that is carried out inn ensuring
that the policies of an organization whether proclaimed or actual are put into practice recognizing
the social differences in organizations and that the structure in place is comfortable and
encouraging to these values. The main reason why most organizations undertake this audit is to
ensure that they are operating in line with the government policies and laws.
A government and risk management audit is important because it determines the whether
a company implements its values as it stipulates, it helps the mangers to knee the expectation and
disappointment from the stakeholders and the shareholders and how they can improve, it is also
the basis to which the decision-making if the future of the organization is made (Kommunuri
2017).
In this paper I am going to do a governance and risk management audit on
Commonwealth Bank of Australia, I will be providing an analysis in identifying the gap between
their values and their application after identifying the values.
Unlike in social audit which is centered on the organization the environment (Bodnar and
Hopwood 2012) this paper is more concerned on the values and their applications during

Corporate Governance and Risk Management 3
operation, though it recognizes that the bank operates within an environment that is key in
determining the extent of application of the company values.
Overview of Commonwealth Bank
Commonwealth bank also called CommBank or CBA is a public financial institution
located in Australia with its headquarters in Sydney Australia, it has over 1100 branches globally
with banks in areas such as New Zealand Asia, United States and United Kingdom with over
4,300 Automated teller machine (ATM).
This bank was founded in the year 1911 and it became a public bank in the year 1991 it
has been labelled as the first and the best bank in Australia with Forbes ranking it at position 58
in terms of the size among organizations in the globe.
The vision of NAB is to excel at securing and enhancing the financial wellbeing of the
people, business and community within the values which are integrity, accountability,
collaboration, excellence and service.
The bank is headed by Matt Comyn as the chief executive officer and the managing
director amongst other six management members, the responsibility of the managers is to ensure
that the company is functioning fully and at its best in their respective areas, they also outline the
operational strategies and the risk policies that are in the organization they revise the
remuneration policy of the employees and lastly they evaluate the reporting quality and strategy
in the organization, in dealing with risks they have a chief risk officer called David Cohen who is
in charge of risk management within the company.

Corporate Governance and Risk Management 4
The company has had several initiatives to ensure that they are in good rapport with the
community and the stakeholders at large, they have mainly focused in the promotion of
education and community business activity, they have summarized their involvement in the
community as ‘helping the people, their businesses and the entire community to save, spend and
invest’. This year they provided $1.8 million to help in the education sector, with 2% of the
company’s profit invested in making the community better.
Some of their objectives in the environment are: enhancing the financial performance of
the community, preparing new students and employees for the future, to educate the community
on the value of money, to build a good transparent relationship with the stakeholder and to foster
an environment of inclusive culture, to lend and invest responsibly and in a sustainable manner
to the community.
Commonwealth bank provides several services (Mahdavi, and Daryaei 2016) as a
financial institution which include retail banking, insurance, business banking, management of
funds, investment services, lending services, institutional banking, supper annulations, wholesale
banking and broking service
They also have a capable team of board of directors that is headed by Catherine
Livingstone the former president of Business Council of Australia (Bui, and Villiers 2017). The
board is responsible for the remuneration policy of the management and ensuring that the plans
by the management are risk free and that the organization has employed adequate governance
and risk management strategies.