Corporate Governance: A Case Study on National Bank of Australia

Corporate Law
Running head: CORPORATE LAW 0
Student’s Name: Bhumika Adhikari
Address

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Contents
Part A ..................................................................................................................................2
Introduction..................................................................................................................................2
Royal Commission.......................................................................................................................2
Royal Commission Finding.........................................................................................................2
Corporate Governance – Poor or Good........................................................................................3
Review of Corporate Governance aspects...................................................................................4
Part B ..................................................................................................................................5
What is Good Corporate Governance?........................................................................................5
Theories of Corporate Governance..............................................................................................6
Conclusion...................................................................................................................................7

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Part A
Introduction
Corporate governance is an important aspect when dealing on behalf of a company. As
the name implies, this governance provides a manner and rules to corporates in which conducts
of the same should take place. Further, this aspect is way in that a corporation is governed.
Corporate governance focuses on interest of all stakeholders of a company and requires the
director and officer of the company to work under a model that ensures sustainable development.
In the emerging ear where money matters a lot, many of the cases has reported in Australia,
where management of a company earned money in an unethical manner. As corporate
governance is very much connected to the subject of ethics, this will not be wrongful to mention
that the reported cases are unethical.
The chosen company for this report is the National Bank of Australia. This bank is one
out of four lead financial institutions of Australia and the same it is securities are listed on
Australian Stock Exchange.
Royal Commission
A royal Commission is an authority in Australia that looks after the conducts of banks,
financial institutions, and other superannuation services industries of the country. The
commission has recently been established in the year 2017 (Royal Commission, 2018). The
motive behind the development of this commission is to control the issues of unethical practices
and frauds in banks and other financial institutions. During the last few years, when cases were

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used to report on a daily basis, the government of Australia started feeling lack of existence of a
proper authority that could give whole time attention to such conducts. Therefore, the Australian
government has established and developed this commission.
Royal Commission Finding
Similar to many of other banks, the National Bank of Australia (NAB) has also reported
as a guilty bank, which was engaged in the activities that led to poor corporate governance. NAB
is a bank that is highly reputed in Australia. In conjunction with this, the same is the largest retail
superannuation fund in Australia (Rose, 2016). Recently Royal commission has served a paper to
the bank in which thousands of breaches in the different sectors were mentioned. These breaches
included breaches with the provisions of Corporations act 2001, Australian Securities and
Investments Commission (ASIC) and so on. The issue was started when in the year 2016; ASIC
first time has come into knowledge about the fact that NAB was involved in charging of
unreasonable money from it is customers (Danckert, Yeates & Williams, 2018). It has found that
the bank was charging his customers for no service fee. In the investigation, findings of ASIC,
and Royal Commission, it was noted that the bank has charged an advisory fee from super
customers in exchange to provide only general advice rather than an advisory one. Further, no
adviser was even linked to those accounts ever. The bank further admitted that super accounts
also been charged for advisory services even when no services were provided to them.
As Royal Commission has come into existence recently, the same has reviewed the issue
further. Commission has later alleged that in addition to charging the several accounts for no
service fee, NAB has also breached it is a further duty. The commission has found that the bank
has not made timely reporting to ASIC and failed to notify the authority (ASIC) that what is the