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Corporate Governance and Risk Management - Assignment

   

Added on  2021-05-27

17 Pages4265 Words27 Views
Running head: Corporate Governance and Risk Management 1Corporate Governance and Risk ManagementStudent’s (Name)Institution

Corporate Governance and Risk Management 2IntroductionEvery company has its policies and values that are set to all the members which couldcome from the government or from the management of the institution. A governance and riskmanagement audit is carried out in ensuring that an organization has clear and legal outline(Crowther, and Sefi 2010) and that the behaviors and expectations of the organization are in linewith the recognized expectations worldwide without disregarding the social and culturaldifference. To determine if an organization adheres to the set of values systems that it set, itexamines the stakeholders and their effect in the overall function of the organization. This auditis important to any organization because from this study the predictions of the futureperformance of the organization can be known, the stakeholders can express their expectationsfrom the organization and this could help the organization to learn the issues that face themanagers and the employees and how to motivate and improve its performance meeting theexpectations that the environment has about it (Mangala and Kumari 2015).This paper provides an audit of a financial institution in Australia called NationalAustralian Bank (NAB) in trying to provide a gap analysis which is the essence of governmentand risk management audit specifically in values and risk audit, it examines the relationshipbetween the and commitment and performance of the value and risk management sector. Itshould be noted that his paper is not a social audit that specifies on the company and theenvironment relations only, this paper includes this section but its emphasis is on the values ofthe organization.

Corporate Governance and Risk Management 3Overview of National Australian Bank (NAB)National Australian Bank is a financial institution located in Australia with itsheadquarters at Melbourne Australia. It was founded in the year 1982 and at that time it wasreferred to as National Commercial Banking Corporation of Australia Limited. It is a bank thathas grown quite fast with branches in New Zealand and parts of Asia. This bank was among thetop three best banks in the country with customers around 12.7 million globally, according toForbes statistics it was position 100 in the globe with reference to its size.The bank has a vision of being the best bank in Australia and New Zealand, to achievethis, they have set strategies in which they have categorized into three, one branch of strategy isconcerned with the customers and the advocates, the other is concerned with the customers andthe stakeholders while the last one is concerned with the shareholders.This bank is headed by an able team of management led by the Andrew Thorburn thechief executive officer heading over 35, 000 employees, this public organization engages inactivities that include commercial banking which entails taking deposits, provision of loans andother investment products, retail baking which entails offering of services to the public suchthings include savings credit and debit cards and mortgages, wholesale banking which entailswhich is just provision of large services to the public such as real estates and other financebusinesses ,wealth management which is an integration of planning in finance and financialservices in coordination of activities such as estate planning and how to invest, lastly it providesservices for insurance which is just a policy to deal with financial risks and losses it is alsoreferred to as hedging in some scenarios (Hopwood, Leiner and Young 2012).

Corporate Governance and Risk Management 4Above the management of is the board of directors that is responsible for: going throughthe management plans to ensure that they are risk free, provision of oversight of the riskmanagement by the company, it oversees promotions and oversight of the organizations systemsannually.The purpose of the management is to ensure strategic and operational planning, theplanning of succession and handing of organization power, risk management and compliance andlastly financial management and monitoring of the reporting system of the bank.Over the past five years there have been several changes within NAB, there has been anincrease in the number of customer served from 8.3 million (2013) to 12.7 million (2017) with anincrease in numbers of branches and the number of employees from approximately 1900(2014)to 3600 presently. It has had fluctuation of profits until 2015 in which the prices started to risethereby reaching up to $5.29 billion in 2017.The dividend share has continued to be constantsince 2016 but the cash earnings are continuously increasing estimated at 2.5% from 2014.It hasexpanded its branches from just Australia and New Zealand to UK and India while continuing toincrease their services since they launched a direct branchless bank separate from UBank in2008.It however has also maintained a spree of scandals throughout this years, in 2009 NAB wasaccused of lacking policies, in 2014 to 2015 there were scandals of fraud in NAB that begun in2013.In 2017 the main scandal has been in its risk management policy. It has offered several services to the community as seen in its engagement with theschools and community originations in provision and management of financial services. Themain way in which they advertise themselves to the shareholders as a public institution isprovision of quality services (Atak, and Erturgut 2010) with the main of reaching maximumprofits thus attracting the investors and shareholders they also occasionally carry out

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