Corporate Governance

This paper discusses the importance of diversity in corporate governance and how Commonwealth Bank of Australia handles diversity management. It also provides recommendations for improving the situation.

Running head: CORPORATE GOVERNANCE
Corporate Governance
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Diversity as corporate governance issue..........................................................................................2
Corporate governance and diversity management of Commonwealth Bank..................................3
Recommendations on improving the situation................................................................................4
Conclusion.......................................................................................................................................5
References and Bibliography...........................................................................................................6

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Introduction
Corporate governance is a broad issue and many factors are incorporated within this.
Diversity is one of those major factors. In the modern day organizations, the international
organizations set up their corporate governance structure in a manner that they can cater to the
interests of their employees hailing from different ethnic backgrounds. It is quite sure that these
people face many problems due to their ethnic backgrounds (Du Plessis, Hargovan and Harris
2018). In this paper, the chosen organization is Commonwealth Bank of Australia. The ways
they handle their diversity management within their corporate governance structure will be
discussed in this paper. Some recommendations will also have to be discussed here as well.
Diversity as corporate governance issue
Diversity is one of the most importance factors when a corporate organization expands
their business from one country to another (Hassan, Marimuthu and Johl 2015). The
organizations have to think about the well being of their employees and protect them from being
harassed or bullied. The Board of Directors of the organization will have to think about the risks
and challenges within the organization that work as the barriers for the achievement of their
mission (Du Plessis, Hargovan and Harris 2018). The top people of the organization understand
that they should encourage the presence of the diversity within the organization. It is because
diverse people have diverse talents. They can contribute to the overall success of the
organization in better ways always (Tricker and Tricker 2015). They are quite aware that the
organizations will be able to perform at their best levels with the positive impacts of cultural
diversity (Dhir 2015). The culturally diverse board of directors and the culturally diverse
employee strength will definitely give a positive vibe for the organization. This will also add to

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the competitive advantage of the organization as well. The skills, industry knowledge and
expertise of people are different for diverse people. It is the responsibility of the organizations to
utilize this diverse talent. Therefore, the organizations will surely be benefitted by the cultural
diversity of the organization in various ways (Tricker and Tricker 2015). The ethnic diversities
will not have any kind of negative impact on the overall work patterns of the organization since
it will only enhance the working capacities of the same.
Corporate governance and diversity management of Commonwealth Bank
The corporate governance structure of the Commonwealth bank is very much strict from
all the aspects. They focus and put much stress on the diversity management and inclusion
policies within their organization. They think their employees are precious resources for them
and it is their duty to protect them. They make sure that their employees will not be harmed at
any cost and harassed by anyone. This is why they have taken up some steps as a part of their
diversity management.
 All the employees have their own unique experiences and all these experiences will be
shaped for their perception of working ability and their overall capacity.
 No discrimination will be tolerated by the management of Commonwealth Bank on the
people belonging to different ethnic backgrounds (Commbank.com.au 2019).
 They are always keen to bridge the gaps between the individuals and restore equality
among the individuals (Commbank.com.au 2019). This equality includes the pay equality
as well. Continuous monitoring is being done by them.
 The company is always keen on retaining a proper workforce that will always contribute
to the success of the organization. The diversity of the organization will lead to the

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competitive success with different types of people from different ethnic backgrounds and
expertise (Commbank.com.au 2019). The knowledge sharing between these people will
indeed be very helpful for them.
 The Commonwealth Bank is also very much aware of their positions and they are
monitoring their systems and processes on a regular basis so they can put much strength
on their opportunities for equality within their organization (Commbank.com.au 2019).
 Commonwealth Bank will also ask the employees to get the lessons from the experiences
of other employees and customers. This will definitely be helpful for them to learn new
things (Commbank.com.au 2019).
 The understanding between the employees is also a very crucial aspect of the
organization (Commbank.com.au 2019). It can only be developed with the proper culture
within the organization. The officials encourage the collaborative efforts between the
people of the ethnic backgrounds. This will prevent the cultural clashes in a big way.
 Strict actions are taken when the code of conduct is breached. Any kind of violence or
harassment on the employees will be taken to the higher management and definite actions
are taken to run the corporate governance properly.
Recommendations on improving the situation
Some recommendations are important in this scenario to make sure that the organization
can improve their business proceedings and provide better outcomes in their diversity
management and corporate governance structure.
 The officials of Commonwealth Bank must address the fact that the issue of diversity is
much more than the race. This can be due to different religious backgrounds, national

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identities, gender relations. The diversity can also be based on the physical abilities as
well. The organization must consider all these things for judging the impact of diversity
in their systems.
 Commonwealth bank must focus on retaining the employees so that it will create a better
image in the competitive business environment.
 The officials should focus strongly on the overall organizational culture. They will not
be able to take the necessary actions on the culprits if they cannot create a proper
organizational culture.
 Proper training on diversity management should be given to the employees to ensure
nothing bad happens to the organizational reputation.
Conclusion
On a concluding note it can be said that the organizational management can be made
smoother by retaining the diverse employees within the operations of the organization.
Commonwealth bank is a reputed organization and they should look to keep their reputation by
empowering the solidarity through diversity management. They must recruit employees from
diverse sections of the society and evaluate them on their merits only. This is the perfect process
to create a reliable organizational culture.

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References and Bibliography
Commbank.com.au (2019). [online] Commbank.com.au. Available at:
https://www.commbank.com.au/content/dam/commbank/about-us/download-printed-forms/
group-diversity-and-inclusion-policy.pdf [Accessed 15 Sep. 2019].
Commbank.com.au (2019). Corporate governance - CommBank. [online] Commbank.com.au.
Available at: https://www.commbank.com.au/about-us/shareholders/corporate-profile/corporate-
governance.html [Accessed 15 Sep. 2019].
Dhir, A.A., 2015. Challenging boardroom homogeneity: Corporate law, governance, and
diversity. Cambridge University Press.
Du Plessis, J.J., Hargovan, A. and Harris, J., 2018. Principles of contemporary corporate
governance. Cambridge University Press.
Ferrero‐Ferrero, I., Fernández‐Izquierdo, M.Á. and Muñoz‐Torres, M.J., 2015. Integrating
sustainability into corporate governance: an empirical study on board diversity. Corporate Social
Responsibility and Environmental Management, 22(4), pp.193-207.
Harjoto, M., Laksmana, I. and Lee, R., 2015. Board diversity and corporate social
responsibility. Journal of Business Ethics, 132(4), pp.641-660.
Hassan, R., Marimuthu, M. and Johl, S.K., 2015. Diversity, corporate governance and
implication on firm financial performance. Global Business and Management Research, 7(2),
p.28.

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Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices.
Oxford University Press, USA.