Corporate responsibility and Governance - Editorial

CORPORATE
RESPONSIBILITY AND
GOVERNANCE

EDITORIAL 1: The Courier Mail: Shareholder/ Business Perspective
The Chief Executive Officer of the one of the oldest banks of Australia Mr Brian
Hartzer recently stepped down from his prestigious post in midst of the money laundering
allegations related to the children exploitation and the shareholders mandate. The CFO Peter
King would take over the post as the board of directors of the company is searching the long-
term replacement.
Some of the key highlights to be noted in relation to the allegations and the stepping
down of the CEO Hartzer are stated as follows. The exit of Mr Hartzer is in response to the
financial regulator AUSTRAC filing the suit against the entity related to the failure of the
money laundering laws compliance. It is to be noted that while Mr Hartzer would be entitled
to 12 months’ notice period, and the remuneration for the same; his performance share rights
would be forfeited (Yeates, 2019). The share rights were worth $ 20 million on the complete
vesting of the same. In addition to the above, the additional short-term bonuses for the year
2020-2021 would also not be paid. It is essential to note further that Mr Hartzer has already
accepted his responsibility as the senior executive of the company and that the company had
failed the expectations of the society. Further, in a statement released by the Chairman
Maxsted, it has been stated that the board understands and accepts its responsibility and the
gravity of the issues raised by the AUSTRAC. In response to this, the company additionally
obtained the feedback of the shareholders and as per the mandate decided that the change in
the board would be in the best interests of the company. It has been additionally stated by the
chairman that in the tenure of 25 years of service of the exiting CEO, and 7 years in the
Westpac, the company has achieved considerable growth, and each of the company’s
businesses are number one or number two in the market. Additionally, the organisation is
committed to reform its risk and governance frameworks to avoid such issues in the future
period and thus, an independent community of experts would guide the review (Morgan &
Janda 2019). In addition the responsibility failure has been well acknowledged by the
Chairman Mr Maxsted is also not seeking to be re-elected in the next annual general meeting
and is set to retire in the year 2020 (Druce, 2019).
Thus, it can be concluded that the entity Westpac has taken reasonable steps in mid of
the money laundering allegations and has included the feedback of the stakeholders as well
which includes the resignation of the CEO. The company is set to undertake the
accountability and governance responsibility more seriously.