Banking Organisation Ethical Practices

The assignment focuses on the banking organisation's responsibility to act fairly with clients and abide by their moral and ethical duties. It highlights the importance of fairness in business practises, including not engaging in unfair trading practices, setting fair conditions for clients, and managing assets prudently. The report by the Royal Banking Commission is also discussed, which led to 76 recommendations being implemented by banks in Australia.

Importance of Ethics in Business

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

Topic: Importance of ethics in business drawing upon the implication of Australia’s recent case
of Royal Bank Commission.
INTRODUCTION
Ethics in a business organisation is of vital importance which guides the moral and ethical
conduct of the business. In the present essay the ethical breaches, revealed by Australian Banking
Royal commission are outlined. The bank managers have been asked certain question over this
breach and at the end the findings of the interview are presented interlinked with the theoretical
aspect of the ethical practise within an organisation.
MAIN BODY
Major Ethical breaches revealed by the Australian banking Royal commission: The
Banking royal commission of Australia is responsible for examining the banking and financial
practises of all the banks operating in Australia. In December 2017 the Royal commission
launched an investigation regarding the practices of banking institution of Austria after the claims
of customer abuse, poor governance and unethical lending practices adopted by banks (Cloutier
and et.al., 2015). There were 4 ethical issues which were identified by the Hayne, the
commissioner of Royal commission:
A high level of conflict of interest due to the constant pursuit of lack of ethical
remuneration structure and personal goals,
Non-separation of the duties between sale/marketing of financial products and provision
of financial advice,
There was a lack of transparency in information system regarding financial product
which did not helped the client in any way to select a suitable product.
The parties braking the laws and regulations were not held accountable for their acts.
The ethical miscount was related with alleged bribery, forging of documents, repetitive
failures in verification regarding living expenses of consumers before landing of money and also
mis selling of the insurance to the people those who cannot afford it (Crane and et.al., 2019).
Certain banks were found to charged fees from the client who have died in name of financial
planning. The report of the royal commission highlighted four major banks of Australia found
under major ethical misconduct. These banks were Westpac, Commonwealth bank, AZN and
National Australia bank. The banks in order to earn higher profits provided misleading financial

advices to their clients and misleading provoked them to buy their financial products. In this they
failed to comply with the principle of in the best interest of consumers in 75% of the financial
advice cases. The banks were found in the act of money laundering and terrorism financing after
banks failed to report millions of dollars’ worth of suspicion transaction vis tis intelligence
deposits (Dutelle and Taylor, 2017).
This ethical miscount detected by the royal banking commission can be relate to the
deontological ethical theory of the where the people are required to abide with the obligation
regarding duties and responsibilities when they are engaged in the decision making. This can be
linked to the breach made by the banking institution where they failed to provide correct advice to
their client leading them to take wrong financial and investment decisions. The banks failed in
identification of their duty and acting accordingly in giving assistance to clients in decision
making process.
Findings of the interviews from bank manager: An interview was conducted with bank
manager at Bank of Queensland, Sydney regarding the changed practices undertake by the bank
after the outcomes of the banking royal commission report.
Interview transcript:
Date:
Bank: Bank of Queensland
Place: Sydney
Name: Sarah Winter
Designation: Branch manager
Question 1: Are you aware about the report of banking royal commission over unethical
practises of the leading banks of Australia. Do you think that this report has brought changes in
ethical practices of banks? And how?
Answer: Yes, sure I am aware about the report of royal commission over the unethical
conduct by some the most reputed banks of the country. In my opinion, I think that this report has
highlighted the unethical practise and exploitation of the consumer by the banks (Ferrell, 2016).
This have made public as well as the banking commission aware about the indulging of banks in
unethical practices. The report has raised a question over banking practices of all the banks in
Australia leading to losing the trust of its clients. In this regard all the banks are now have made
sure that they do not indulge in any of the unethical practise and those who were not involved in

such practices remain intact to their conduct. The banks, now have become fully transparent with
their clients in producing financial advice as well as in the operations of bank.
Question2: What in your opinion is the ethical conduct a bank must practice in its
operations as well as with its clients?
Answer: A bank must disclose all the information to its client relevant to him/her. They
must provide misleading or fraudulent advice to them regarding financial product just to increase
their turnover and profits. The banks must work in the best interest of their clients and must not
use of their personal information and data for its own advantage. All the banks must not indulge
in any terrorism financing and money laundering activities (Garegnani, Merlotti and Russo,
2015). Moreover, the banks must understand the needs of its consumer and provide them
adversarial assiatnsce with keeping in mind their financial background as well.
Question 3: Was your bank involved in any of unethical conduct before the report of
Banking royal commission.
Answer: No, defiantly not, our bank has not engaged in any of such practices at any time.
The bank of Queensland has always upheld the ethical and morale perspective in its conduct and
while dealing with tis clients as well. The bank has never ever have disrespected its clients and
always given priority to them and providing them advise and banking services.
Question 4: What changes were implemented in your bank after the recommendations
were made by the royal commission.
Answer: The royal commission have provided in total 76 recommendation. The bank has
undertaken the change as over the banking recommendation, where it have revised the
disciplinary framework contains the code of ethics, value and standards of professional conduct
and regarding financial advisor as well. From the “my super account” the fees have been banned
as recommended by the commission. All the employees of the banks no longer solicit in
superannuation products (Swanson and Frederick, 2016). There is no exemption for handling and
settling of the insurance claims. All other guideline forms the commissions are also adhered by
the bank of Queensland.
Question 5: What measures were taken by your bank to abide with the moral and ethical
conduct.
Answer: All the employee of the bank both senior and juniors level employee are given
clear instruction over keeping their personal and professional goal separate. The employees are

provided with knowledge that what practices and conduct fall under ethical misconduct. Also, the
bank has undertaken a practice of keeping all the information transparent to its client while
providing financial advice and selling financial products.
Theoretical insight relating to major aspect of ethical practice in business and
finance :Theoretical insight over strength of ethical practice in bank of Queensland regarding
ethical practice in business finance is related with application of general ethical norms in general
practice. This includes truthfulness, honesty, respect, integrity, fairness and justice. For ethics in
finance the bank of Queensland has includes all the aspect of life with business and finance. The
bank has made moral codes in the conduct of business (Myers, 2019). The bank has shown
abidance with the recommendations made by the banking royal commission. All the other banks
in Austrasia are required compulsorily to follow the recommendation and engage in moral and
ethical practices with their clients. This was the banking organisation can make a separate
standing in the global market with enhancing the value and creditability in the international
economy. The banks belong to the finance industry and they required ethical competencies in
business practises. The requirement of the financial market regarding ethical practices includes
fairness which can be substantive or procedural.
To out stand in the global economy the banks are required to not to indulge in unfair
trading practices, set fair conditions for the clients, do not enter to fraudulent contract with clients
regarding mortgages and future options. The financial mangers of the banks are required to work
as an agent and fiduciary which have an obligation to manage the asset of the bank and tis client
prudently and must not use any asset for his/her personal benefit. They must provide correct and
full information to the consumers regarding inverting in financial products of the bank keeping
their personal interest aside (Quinlan and et.al., 2019). To sum up it can be stated that the banking
organisation have a lawful duty to act fairly with its clients and abide with its moral and ethical
duty as well.
CONCLUSION
From the above essay it can be stated that with publication of report by royal banking
commission over the ethical misconduct practices by the banking and financial institution in
Australia have been highlighted. The barbing commission have published 76 recommendations
and same have been abided and incorporate the bank of Queensland in its general practice to fully
abide with the ethical conduct in banking and finance.

REFERENCES
Books and Journals:
Cloutier, O. and et.al., 2015. The Importance of Developing Strategies for Employee Retention.
Journal of Leadership, Accountability & Ethics. 12(2).
Crane, A. and et.al., 2019. Business ethics: Managing corporate citizenship and sustainability in
the age of globalization. Oxford University Press.
Dutelle, A. W. and Taylor, R. S., 2017. Ethics for the public service professional. Crc Press.
Ferrell, O. C., 2016. A framework for understanding organizational ethics. In Business ethics:
New challenges for business schools and corporate leaders (pp. 15-29). Routledge.
Garegnani, G. M., Merlotti, E. P. and Russo, A., 2015. Scoring firms’ codes of ethics: An
explorative study of quality drivers. Journal of Business Ethics. 126(4). pp.541-557.
Myers, M. D., 2019. Qualitative research in business and management. Sage Publications
Limited.
Quinlan, C. and et.al., 2019. Business research methods. South Western Cengage.
Swanson, D. L. and Frederick, W. C., 2016. Denial and leadership in business ethics education.
Business ethics: New challenges for business schools and corporate leaders. pp.222-240.