The corporate responsibility and governance

CORPORATE
RESPONSIBILITY AND
GOVERNANCE
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EDITORIAL (COMMUNITY PERSPECTIVE)
Corporate responsibility and leadership go hand in hand and form one of the prime
duties of the directors of the companies worldwide including that of Australia. The principles
of the corporate social responsibility state that an organisation’s management must be
considerate of the interests of the various stakeholders including the society at large. The
following editorial would highlight the failure of the Westpac of the corporate responsibility
governance principles.
The organisation was in news for the breach of the financial and money laundering
laws, followed by a suit filed by the financial regulator AUSTRAC. It has been alleged in the
report submitted by the AUSTRAC that the entity has indulged into law violations 23 million
times which included the international financial transfers, the money of which was used in
the child exploitation activities in Philippines (Yeates, 2019). It is important to be noted that
AUSTRAC had already pointed out the short comings in the digital payment systems of the
bank in the year 2016 and the same were not addressed by the organisation on the timely
basis (Toh, 2019). Had the organisation fixed the issues of care and diligence in the processed
and the systems of the bank. In addition, it is to be noted that as the CEO of the entity has
decided to step down, he would be remunerated for the notice period served that is of the 12
months. This also highlights the major fault in the corporate environment that the CEOs and
the other senior executives are heavily remunerated, irrespective of the fulfilment of their
legal responsibilities, and corporate governance duties. Further, the immoral attitude of
executive is further evident by the fact that before resigning from the post, Hartzer
commented on the issue, as not to worry about and termed it as not serious enough as
corporate failures (The Business Times, 2019).
The issue is grave and has brought down the attention of the Prime Minister of the
country as well. In the words of Scott Morrison, it is the duty of the organisations itself to
determine the responsibility towards the society and abide by the same (Reuters, 2019). The
market sentiments have been negative as well, as evident from the slash of the share values of
AUD $ 7.5 billion immediately after the filing of the civil suit by the prudential regulator
(Cadman, 2019). It is a case of sheer negligence of the company executives, indirectly
contributing to the international and domestic crimes.
The discussions conducted above enable to conclude that the in spite of the regulators
highlighting the issue of the corporate social responsibility on the part of the leaders, the

same do not pay adequate attention to the same. As highlighted above, the payment of high
remuneration in spite of the civil suit filed is a serious case of ethical and moral failure and
needs stringent laws and voluntary efforts to address the situation.