Corporate Responsibility and Governance

Running head: CORPORATE RESPONSIBILITY AND GOVERNANCE 1
Editorial Writing

CORPORATE RESPONSIBILITY AND GOVERNANCE 2
Editorial 1
The Australia and New Zealand Banking Group (ANZ) chief executive Shayne Elliott
received a pay cut after the statements from Royal Commission. As can be seen in the reports,
ANZ had never cut executive incentive payments in the last 10 years. The bank had been under
the microscope for past few years with regards to a series of scandals it was involved. But the
executive pay cut happened in the year 2018 keeping in mind the bank the disasters made by the
bank like the bank bill swap rate disaster which costed them $50 million in penalties. Looking
into the case it can highlighted that CEO Shayne Elliott along with three other executives
received a massive pay cut as a result of fee manipulation.
According to the CEO of ANZ, there were no pay cuts like this at the senior level. The
issue highlighted when there was no evidence of such a pay cut in the annual reports of the bank.
According to the views of the CEO, the pay cut was intentional looking at the overall
performance of the department heads rather than punishing individuals for their actions. He
admits the fact that ANZ had an issue with their pay structure in the past and agrees that he
willingly ask for a pay cut in his remuneration for 2018.
But this cannot be the ultimate solution for holding people responsible for the overall
performance holding individuals accountable for their mistakes. The pay cut was not justified
and received backlash from the shareholders. The company could have identified the people
responsible for the non-performance and accordingly dealt with them. Being a powerful man,
CEO Shayne Elliott could have thought about admonishing his senior executive on the basis of
their conduct and publicly shaming them. This cannot be a good sign for the bank to attract
future talent and consider themselves being the one of the big four banks. The other executives
were also aware of the heightened situation of the community concern of such a pay cut and
reward system for the executives. Although Shayne Elliott thinks this remuneration cut as a
strategic option for long term improvement, it did not receive much appreciation from the
shareholders and investors. It was true to criticize that investors and community had expectations
from the bank and were not involved in this decision. 34% of the shareholders voted against
ANZ's remuneration report which meant that shareholders were going off the hook.
It became a necessity for the company to resolve the issue unanimously and think of the
shareholders the bank has failed to meet their expectations. As an outcome of this case, ANZ's