Corporate Governance and Social Responsibility Executive Summary: An Empirical Study of the NAB Property Market Scandal

Corporate Governance and
Social Responsibility

Executive Summary
The purpose of this report is to evaluate the property market scandal of NAB to identify the
corporate governance failure of the company and its impact on the stakeholders of the
company. It was found that the company and its employees had failed to comply with
corporate governance guidelines since they pushed home loans on customers without
collecting relevant documents. Along with corporate governance, stakeholder analysis of
NAB is conducted in the report to identify how the operations of the company influence its
stakeholders. Various ethical theories are discussed in the report to evaluate the case from
an ethical perspective which provided that the actions of NAB were unethical.
Recommendations are given for NAB as well which include implementing of effective CSR
structure to promote transparency. A system should be implemented to check the working
of employees, and the company should provide ethical training to employees that assist
them in acting ethically.
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Table of Contents
Introduction...............................................................................................................................3
Background and Ethical Question..............................................................................................3
Corporate Governance, CSR, CSV and Corporate Social Performance......................................4
Stakeholder Analysis..................................................................................................................6
Corporate Governance Discussion based n ASX 2010 Principles and recommendations.........8
Ethical analysis...........................................................................................................................9
Recommendations...................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12
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Introduction
The importance of compliance with ethical principles has increased substantially in banking
corporations. The purpose of this report is to evaluate the case of National Australia Bank
(NAB) to understand the corporate governance policies breached by the company. The
corporation has violated various laws implemented on financial institutes by the
government to govern their operations in order to ensure that they manage their
operations in an ethical manner (Letts, 2017). The scope of this report includes evaluation of
the property market scandal of NAB in which the company and its executives failed to
maintain a high standard of care to ensure that they comply with appropriate corporate
governance policies. This paper will be limited to recent scandals of NAB relating to
corporate governance policies. The method of this report will focus on using different
theories to evaluate the ethical policies violated by NAB while conducting its activities. In
this report, the background of this case will be discussed along with ethical questions which
arise in the case. The corporate governance policies will be analysed in the report along with
a stakeholder analysis of the enterprise. The principles and recommendations issued by the
Australian Securities Exchange (ASX) and various ethical theories will be analysed in the
report to provide recommendations to NAB.
Background and Ethical Question
After the financial crisis of 2009, the importance of ethical business practices has increased
significantly between organisations. The companies have to comply with corporate
governance policies to ensure that their conduct their business operations in an ethical
manner while focusing on the interest of their stakeholders who are affected by their
operations. Banking organisations are criticised for misusing their powers to conduct their
operations illegally which adversely affected the whole economy of the country. The federal
government is pressures to take action against the banking corporations to establish
discipline (Hutchens, 2018). After the formation of the Royal Banking Commission, the
mischievous and unethical practices of banks were brought forward. In Australia, banking
corporations have paid over $1 billion in fines and penalties, and this number is expected to
double in next one or two years (Goncalves, 2018). A good example is the case of NAB which
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