Impact of Business Decisions on NAB

Running head: EDITORIAL: IMPACT OF BUSINESS DECISIONS
EDITORIAL: IMPACT OF BUSINESS DECISIONS
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1EDITORIAL: IMPACT OF BUSINESS DECISIONS
ABC news online
The National Australia bank faced significant issues in regards to their executive pay in
2018. The bank faced strong backlash from their stakeholders for their bad remuneration policy.
An investor revolt occurred in which more than 88% of the shareholders in Melbourne objected
to NAB’s report in their Annual general meeting. Matters went even worse when larger
shareholders such as the ASA, ACSI, Ownership Matters and Institutional Shareholder Services
that have proxy voting powers announced to vote against the remuneration report of NAB.
The issue gave rise to further controversies as many started questioning the extent to
which capitalism can be exploited by an organization. An investor named Chris Schacht said to
the AGM of NAB that they were the unacceptable face of capitalism. He also said that the
organizations had actually destroyed billions of dollars’ worth of shareholder value. The bank
chairperson Ken Henry admitted that the executive pay of the bank indeed got it wrong. He also
told that the bank will revamp its pay structure.
The royal commission report of 2018 focused on the issues reported with NAB and
slammed the overcharging of the customers by the organization. Along with the same the report
also identified breaches of corporations act. Additionally, the breaches of the ASIC Act were
also reported. Along with the same various suspected breaches of the Corporations Act and also
the ASIC Act were put forward through the report.
The entire issue surrounding the ABC news online points to the fact that corporate banks
often take measures to ensure their greater profitability that actually end in losses for the people
that have trusted these organizations with their money. Extreme capitalistic outlooks by
corporate organizations such as the NAB can cause further problems for the stakeholders and

2EDITORIAL: IMPACT OF BUSINESS DECISIONS
shareholders of these organizations if not properly checked by the various regulatory bodies.
Here, it should also be pointed out that NAB admitted that it did indeed broke the corporate law
84 times between the period of 2014 and 2017. The remuneration issue was touted as the fees for
no service scandal of NAB. The events that were reported were quite obviously very worrying
for the shareholders. It is bound to affect other such investors and shareholders that have invested
in similar organizations. The problem is quite certainly the severe capitalistic tendencies of these
banks. In some cases the returns of certain regulation breeches are too big to be altogether
ignored by the large banking organizations. There is a need for stronger laws to ensure the safety
and security of the investments of the shareholders. Investor remunerations should hence be
adjudicated as one of the topmost priority of the banks.
It can be said that the incident brought to light some of the most unfair remuneration
systems that are sometimes implemented by banks in order to increase their profits. Capitalistic
approaches of financial organizations should hence be checked by the financial regulatory bodies
from time to time. Hopefully, strict actions will be taken in this regards and such incidents could
be effectively avoided in the future.