Corporate Governance and Flaws in Australia and New Zealand Banking Group Limited (ANZ)

Running head: Corporate law

Corporate law 1
Synopsis
Corporate Governance is the mechanism of rules, procedures and practices which control
and monitor the activities of a firm. It attempts to equalize the stake of various stakeholders of a
company such as consumers, suppliers, investors, financiers, management, society and
government. It also provides an agenda to accomplish the objectives of a company so it should
be assimilated in every sphere of administration right from the action plans to performance
management to corporate discourses and internal controls.
The key component of maintaining good relations with the community and investors is
communicating the firm’s governance to them. The board is one of main direct stakeholder
which creates a great impact on the corporate governance of a company. They are chosen by the
investors or the other members of the board and they are the representatives of the investors of
the company. The board has been handled with the most crucial tasks such as appointing the
corporate officers, formulation of dividend policies of the company and deciding the
compensation to be given to the executives.
This assignment examines the corporate governance of Australia and New Zealand
Banking Group Limited (ANZ) along with the role of the Royal Commission in elucidating the
flaws of the system. It would also throw light on the Corporate Governance Principles
recommended by ASX and duties of the directors in this behalf.
It would also exhibit the examples of good or bad corporate governance adopted by the
company and the various consequences to be borne by the company due to its fraudulent
activities. Lastly, the various theories of corporate governance would also be identified in this
regard.

Corporate law 2
Contents
Introduction.................................................................................................................................................3
Part –A........................................................................................................................................................3
Company Currently Listed On the Australian Stock Exchange and Whose Conduct Is Being
Considered By the Royal Commission....................................................................................................3
Adherence of ANZ to the principles of good corporate governance including examples of good or poor
corporate governance exhibited by it.......................................................................................................5
Part –B.........................................................................................................................................................7
The possible consequences of not following the corporate governance principles to be borne by the
bank.........................................................................................................................................................7
Identification of two theories that can drive corporate governance in the bank.......................................9
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12

Corporate law 3
Introduction
Corporate Governance is the mechanism through which the corporates are administered
and regulated . The board is the main stakeholder which implements the corporate governance in
the company. The six pillars of the corporate governance are fairness, responsibility, assurance,
transparency, leadership and stakeholder management. These are critical for running an entity
and formulating professional relationships amongst the stakeholders such as board, employees,
managers, consumers, regulators and investors (Gupta, Krishnamurti & Tourani-Rad, 2013).
In this context, the corporate governance and flaws of Australia and New Zealand
Banking Group Limited was known as ANZ would be exhibited in this assignment. Its conduct is
being investigated by the Royal Commission. The principles of corporate governance would also
be examined in the light of corporate governance charter of ANZ along with elucidating the
examples of good or bad corporate governance by the bank.
The various consequences of not following the governance charter by the bank would
also be described along with its theories which can drive corporate governance in the bank.
Part –A
Company Currently Listed On the Australian Stock Exchange and Whose Conduct
Is Being Considered By the Royal Commission
Australia and New Zealand Banking Group Limited is known as ANZ and it is the third
biggest bank in Australia. It deals into commercial and retail banking. It is also the biggest bank
in New Zealand. Along with conducting its transactions in Australia and New Zealand, it also