Ethical Issues in Commonwealth Bank of Australia

Running head: ETHICAL ISSUES
ETHICAL ISSUES
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1ETHICAL ISSUES
This essay discusses the ethical breach of the very famous Commonwealth Bank of
Australia. In the famous newspaper of the country named ABC news, this information has
been published in 19th May, 2018 (Abc.net.au 2018). The investigation has found out this
unethical behaviour was executed by the retail branch staffs of the Commonwealth Bank in
order to serve their own interest. Fairfax media report has been referred in order to confirm
the news where the Commonwealth Bank of Australia has apologised for their action of
breach of trust to their customers. This essay discusses the incident and the findings in the
investigation, discuss the importance of ethics in the effective and success of business in
this global context and analyse the organisations actions in opposition of the corporate social
responsibility theories.
The Commonwealth Bank of Australia is one of the most important and trusted
corporation of the country but this incident has just overturned the ideology and bond
between the organisation and their customers. According to the report, the Commonwealth
Bank’s chief executive officer Matt Comyn has responded to the accusation of fraudulent
manipulation of thousands of children's accounts by the own staff of the bank. The report has
also revealed that these staffs conducted this unethical function only to earn bonuses and
meet their targets. These employees have used the fund of the bank as well as their own
money illegitimately to activate the Youthsaver accounts. The unethical issue has taken place
by utilising the regulations of the bank and use them in serving their own interest. In order to
get more incentives these staffs used the bank’s policy of opening and keeping small deposits
in the bank.
The Commonwealth Bank of Australia has the policy for the little kids to open bank
account under the program of Youthsaver where these kids will be saving their money. Thus
the bank encourages them to learn to save money early in their lives. It is no doubt a very
appealing strategy in accordance to the company’s CSR policies but the ethical breach is a

2ETHICAL ISSUES
huge blow to the positive side of this program of the bank. The report has revealed the fact
that the chairman has agreed with the accusation and referred to the same issue that took
place in the year of 2013 which compelled the bank to bring some minor changes to this
policy so that no employee take advantage of this product and use them to serve their own
interest. However, this same thing has happened again and recent investigation has found out,
this malfunctioning has been taking place for last five years. Now the corporation has decided
to take Zero Tolerance Policy of these unprincipled employees as this has now related with
the fame of the organisation as well as the safety of their customers. Despite the fact that this
ethical breach has not affected the customers financially but for the Commonwealth Bank of
Australia it is a huge loss for they will not get trust of the customers (Dugan and Taylor
2016). This will directly affect the business of the bank and the number of new customers
will sharply decrease. However, the CSR policies of the corporation transparently discusses
their duties associated with the social development. This is the reason why the decision of
taking punitive measure to the accused employees is highly supportable.
From the discussion of the CSR policies of the Commonwealth Bank of Australia, it
can be found out that the bank has a high quality CSR outlook for example it does a great
number of good deeds. It starts from the advancement of gender equity in the organisation’s
employment policies, promote ethical as well as clear business practices, support
environment friendly investments and foster financial literacy in kids of the country
(Commbank.com.au 2018). The element of trust in the financial sector in Australia has been
restored as well as maintained by the corporation. The bank views the customers as their
friends which reveals their aim of business is not to make profit at any cost but making
friends. Therefore, this issue of fraudulent manipulation of the children’s account has not
been supported by the authorities of the Commonwealth Bank. In addition to this, the