Governance and Risk Management Audit

GOVERNANCE AND RISK MANAGEMENT AUDIT 1
GOVERNANCE AND RISK MANAGEMENT AUDIT
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GOVERNANCE AND RISK MANAGEMENT AUDIT 2
Overview of National Australian Bank
NAB limited is an enterprise bank involved in offering personal banking and business
banking services. NAB's segments entail enterprise and private banking (REUTERS, 2019). The
bank has also delved into other areas such as corporate and institutional banking, wealth
management, and banking for the consumers. NAB's enterprise and private banking concentrate
on small and medium enterprises clients which entail the bank's enterprise franchise that
specializes in health, education, agriculture and services for the community accompanied by both
private banking and small business sector. The CIB entails corporate and institutional banking
enterprises, capital financing enterprises, servicing of assets, and global branches. On the other
hand, customer products involve banking and wealth products, NAB ventures, and corporate
affairs. Consumer banking and wealth management entails the distribution of parts of wealth
management.
NAB's values
NAB's culture is grounded by five primary values that are a passion for satisfying
customers, winning as a team, boldness, respecting people, and doing the right thing. It is such
values that shape its people and the businesses they engage in daily (NAB, 2019). NAB is also
proud to state that it works with several local communities and provide volunteer leave aiming to
improve the social and economic status of the people around it. NAB also assists people in its
workplace via learning and providing development opportunities, diversity, and inclusion.
NAB's core values are items that it is passionate about as they capture the importance of NAB's
aspirational tradition and demonstrate that it cares deeply with regards to how things get done
instead of what the bank does. In the passion for customers, NAB puts itself in its customers'
shoes, seeking and offering the right remedy for them and solving things first if they are done

GOVERNANCE AND RISK MANAGEMENT AUDIT 3
wrong. The win together value ensures that NAB goes the extra mile for its customers and
people and never losing the sight of its objectives. Boldness ensures that NAB is not intimidated
to raise tough questions and to attempt something different. NAB backs itself and is accountable
for its actions. The respect for people ensures that NAB has a real conversation with its people
and consistently showing respect and brevity, this ensures that NAB embraces things that makes
it different and motivate the development of an inclusive culture. Lastly, doing the right thing
facilitates that NAB makes good decisions for its customer, people, and the societies even at
times when it is almost impossible.
Governance and risk management audit
Governance in the context of NAB can be defined as how decisions are made in this bank
with the inclusion of financial objectives, virtues and strategic priorities effect on the process of
decision making and risk management and the protocol of ensuring that decisions made get
implemented. The purpose of this report is to assess the gaps between what NAB has committed
to its various stakeholders and the actual actions regarding those commitments (NAB, 2018).
The report entails reviewing NAB's governance of the material risk groups to which NAB is
exposed, and it will also focus on primarily on the categories that have reported latest incidents
and the drawbacks associated worth such incidences. With regards to NAB, the primary areas of
concern are related to non-financial risks such as operational, compliance, and conduct risks.
According to NAB, the three risks that is operational, compliance, and conduct have various
meanings and significance to the bank.
Operation risk is defined as the risk that arises from failed internal frameworks,
individuals, and systems. This entails legal risks with the exclusion of strategic or reputation risk.
Conduct risk, on the other hand, refers to the risk from actions of the bank or those acting on

GOVERNANCE AND RISK MANAGEMENT AUDIT 4
behalf of NAB will lead to unfair results for its customers (NAB, 2018). Lastly, the compliance
risk refers to the risk associated with failing to fathom or complying with relevant laws.
The NAB board is tasked with managing the overall governance and strategic direction regarding
NAB and also heads the delivery of performance with the inclusion of managing the prevailing
risks (NAB, 2018). The Board is composed of nine non-executive directors all appointed by the
bank's shareholders and the CEO, who is a non-executive director. It is the responsibility of the
Board to provide the strategic direction to be followed by NAB's enterprises and also supervise
the bank's operations and performance using the development of sustainable value. Thus, the
directors have to operate in the best interests of the bank while also fulfilling the responsibilities
stipulated in the Board Charter, which is one of the documents that are available on NAB's
website. However, NAB has board committees to assist the Board with regards to oversight of
particular sectors of governance.
The Board has been reported to work in unison as a team with increased levels of
confidence with each other and clear identification and leverage of their level of experience,
skills, and aptitude from each member (NAB, 2018). The past interviews, particularly those with
the executives, demonstrated that the Board members were active participants and were fully
immersed in the business conducted by the Board. The chairman of the Board and the CEO of
NAB have been reported to be involved in a constructive and open relationship characterized by
meetings and conferences every week to converse on the activities of NAB and the performance
of executive leadership.
The Board also conducts a dynamic agenda crafted around the idea of Run the Bank and
Change the Bank. The Run the Bank is tasked with ensuring the daily operations and
performance of the bank while change the bank situates the strategy and actions to improve the