Corporate Governance & Ethics: AMP Limited Case Study

Corporate Governance & Ethics

Executive Summary
The aim of this report is to evaluate the corporate governance and ethics system of
AMP Limited to identify various deficiencies in the process. It is found that the managerial
personnel of the corporation has failed to adhere to its corporate governance policies since
they encouraged employees to get around the provisions given under FoFA. Moreover, they
did not take any actions against the reports made by the whistle blower to avoid the ethical
practices. While managing its operations, the company has failed to ensure that it complies
with ASX principles and recommendations. These were the reasons due to which the
breakdown of AMP Limited occurred after a whistle blower reported the unethical practices
of the organisation. Although the company has adopted a mechanism to protect whistle
blowers, however, it is not sufficient to ensure that the interest of whistle blowers and the
stakeholders are protected. Strategies are recommended in the report which would have
avoided the scandal. Firstly, the company should have implemented a monitoring system
which oversees the functions of the management to ensure that the policies of corporate
governance are strictly adhered by them. Secondly, the company should be followed the
principles and recommendations issued by ASX to ensure that they lay a solid foundation
and implement a structure which is focused on adding value to the company.
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Table of Contents
Introduction............................................................................................................................. 3
Deficiencies in the system of corporate governance of AMP...................................................4
Circumstances which led to breakdown...................................................................................5
Mechanisms to protect whistle blowers..................................................................................6
Recommendations................................................................................................................... 6
Conclusion................................................................................................................................ 8
References................................................................................................................................9
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Introduction
The importance of business ethics has grown substantially as the number of cases
relating to the unethical behaviour of large organisations has increased. Multinational
corporations focus on implementing good corporate governance policies and the senior
executives of the company complies with them while forming business strategies (Tallon,
2013). In case of Australia, the Australian Securities Exchange (ASX) has issued various
corporate governance principles and recommendations which are necessary to comply by
Australian organisations to ensure that they ethically perform their operations while
ensuring that the interest of their stakeholders is being achieved. In this report, the case
study of AMP Limited will be discussed to evaluate the problems faced by the company
relating to corporate governance and ethics and the principles which it failed to comply
with. This report will evaluate whether anybody “blows the whistle” on the employee and
what mechanisms are implemented by the company to protect the whistle blowers and
whether these policies are sufficient to protect various stakeholders. Various strategies will
be recommended in the report as well which should be implemented by the company to
avoid the scandal.
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