Corporate Governance Report Australia 2022

Running Head: CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Name of the Student
Name of the University
Author’s Note

CORPORATE GOVERNANCE1
Table of Contents
INTRODUCTION:..........................................................................................................................1
FINANCIAL ADVICE:...................................................................................................................1
ETHICAL QUESTIONS AND THE REPORT:.............................................................................3
ASX PRINCIPLES AND RECOMMENDATIONS:.....................................................................5
DIVERSITY AND INCLUSION OF BOARDS INVESTIGATED...............................................7
NORMATIVE THEORY APPROACH AND SUSTAINABILITY APPROACH TO THE
COMMISSION REPORT...............................................................................................................8
CONCLUSION:............................................................................................................................10
REFERENCES:.............................................................................................................................11

CORPORATE GOVERNANCE2
INTRODUCTION:
The Royal Commission into Misconduct in the Banking, Superannuation and Financial
Services Industry is also known as the Hayne Royal Commission incorporated in 2017 by the
virtue of the Royal Commissions Act 1992 to investigate and report matters related to
misconduct in banking, superannuation and the industry of financial services.
FINANCIAL ADVICE:
The banking industry comprised of monetary transactions with respect to lending and
borrowing with money, however, it emerged out as a mode for transaction services. Until the
1970s, the industry comprised only of superannuation and life insurance companies (Malcolm
Edey and Gray 1996). The scope for investment of money by the financial institutions on behalf
of the customers was less. Regulation of financial market in Australia led to introduction of
foreign banking and restrictive rates by banks and other banking related matters became easier
and at the same time the industry boomed with floatation of the Australian Dollar and liquidation
of securities markets. It diversified the development of financial products offered by the banking
industries.
Culture and Governance:
The report was an analysis upon the misconduct in banking, services and superannuation
in the industry. However, the report established the culture of acquisitiveness among various
financial institutions in Australia (Fergusan 2014). An inquiry initiated by the Parliament laid
down for the establishment of a royal commission upon the matters related to regulatory
intervention by the government authorities and its impact on financial institutions (McGrath and

CORPORATE GOVERNANCE3
Janda 2014). However, after the investigation by the royal commission it was found that the
financial institutions were involved in irregular activities like money laundering for drug
syndicates and terrorism financing. They further failed to exercise their reporting duties as
established by the statute, and improper methods adopted in foreign exchange trading. Thus it
can be established that the Financial advice played a major role in regulating the culture of
irregularities, which can be seen in the exposing of scandals like that of Storm Financial (ASIC
vs. Cassimatis (No 8) (2016) 336 ALR 209, 1023 [1]) wherein the Storm’s clients were advised
to take loans against their homes and use the funds for market investment through index funds.
Thus by the end of 2008, many clients suffered loss due to negative equity positions. ASIC had
to intervene to initiate proceedings against the Storm for the breach of Directors duty.
This case also highlights the governance regulations which was established by the
commission through ASIC and regulating the exercise of governance powers more thoroughly so
that no irregularity goes unseen. The royal commission was aimed to provide guidelines for the
misconduct in banking industry. Referring the above case, ASIC vs. Cassimitis, it can be
explained that the Directors breached their duty under section 180-183 of the Corporation Act
2001 (Cth) and their misconduct caused loss to numerous people. Further, in 2010, it was
highlighted by a whistleblower about the ASIC inspection into the misconduct of financial
advisors under the employment of CFPL, a subsidiary of CBA (Simon 2014). This instance
explains the misconduct of the financial advisors for which the parent company CBA had to
initiate a second program for compensation. Such programs for compensation or systematic
cover up by the management, and investigation by ASIC into it ensures that the governance of
the company is not compromised by the irregularities.
Remuneration: