AF704: Ethical Behaviour and Corporate Governance in Global Finance

This report evaluates ethical behavior and corporate governance within Lloyds Banking Group and the global financial services industry. It assesses the impact of financial reporting on stakeholders, analyzes governance laws, emphasizes the importance of business ethics, and evaluates CSR policies. The report highlights the role of financial reporting in stakeholder decision-making, the impact of government regulations, and the importance of ethical practices in maintaining consumer confidence and promoting long-term sustainability. It also addresses ethical issues related to employee treatment and customer satisfaction within Lloyds Banking Group, while emphasizing the need for transparency and responsible business practices.

Ethical Behaviour and
Corporate Governance

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
Evaluate the impact of financial reporting on stakeholder of Lloyds banking Groups...............3
TASK 2............................................................................................................................................4
Analysing governance law in global finance industry.................................................................4
Task 3...............................................................................................................................................6
The importance of business ethics and corporate governance in the global financial services
industry........................................................................................................................................6
Task 4...............................................................................................................................................7
Evaluation of CSR Policy............................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Ethical behaviour refers to the moral values or the set of rules and regulation that
company offer in order to deliver support, safety and show concern toward different people
associated with the organization. The presented report is based on the organization Lloyds
Banking Groups in which the report will examine the importance of ethical values and the
corporate governances. Apart from that the report involve the analysation of governance law in
adequate manner.
MAIN BODY
TASK 1
Evaluate the impact of financial reporting on stakeholder of Lloyds banking Groups
The annual reports of a company contain financial information which are published
periodically and Lloyds Banking Groups is also liable to provide financial information to all the
various stakeholders at the past reporting period. The rationale for providing information to the
company’s stakeholder is such that to let them understand what the company is doing and to
determine the company has earned more money than they spent. Moreover, the stakeholder of a
company requires financial information in order to make decision about a firm which in turn
assist to create to present their views in order to attain the success (Sierra-Garcia, Garcia-Benau
and Bollas-Araya, 2018). Lloyds Banking Groups is operating at global level and that is why,
there are internal and external stakeholders who actually present their views in order to create a
better outcome. For example, directors and Managers of a company are keen interested in the
financial reporting and it create a positive impact over the stakeholders because they make
dividend decision about the firm and establish the goals by analysing the financial performance
of a company. Therefore, with the help of financial report, company can increase its productivity
level by strengthen the control of procedures.
On the other side, shareholder of the company also gets a direct impact from the financial
information such that they determine the going concern of a firm and also compare their
investment as well as their benefits within a firm. It is important for the company as it helps in
providing a snapshot of corporation financial health as well as insight of the performance, cash
flow and overall conditions. The shareholders require financial statements to make informed
about the decision of investment specifically at the time to vote on corporate matters. It is

important for the investor as it can provide for various information about the company revenue,
profitability long and short term financial obligations (Tien, and Hung Anh, 2018).
The covid 19 pandemic affect the organisational brutally as it bring the health crises. In the covid
19 situation the people are not allow to move one place to another due to spread of coronavirus.
Apart from that the business faces many challenges even some organisation face complete
shutdown that also reduces the transaction. Apart from that the people avoid the finance facilities
of the organisation. Furthermore it reduces the financial values or financial reporting of the
company and affect the organisation negatively. Afterall the organisation is able to manage the
financial condition. In the current period of time it is important for the company to manage the
financial crises in effective as well as efficient manner. with the assistance of financial condition
or financial information the organisation is able to grow higher and deliver finance to the various
organisation or the people. Apart from that the the stakeholder or the investors are able to take
essential decision for the welfare of the organisation. Due to the positive financial reporting the
organisation is improving the brand image of the company in domestic as well as international
marketplace.
TASK 2
Analysing governance law in global finance industry
Government regulation affects the financial service industry that defines the particular
impact on the nature of the regulation. Although the corporate governance structure specifies the
distribution of rights and responsibility between different candidates in the company. This
include MD, manger, shareholder and board which spell out the rules and regulation as well as
procedure for developing the decision regarding company affair. It also provides the structure
through which firm goals can be set and it can find the ways to accomplish that objectives.
Although corporate governance in financial institution has to set the standards as well as
principals which is used to create a checking system for balancing the management of bank. It
establishes the ways financial institution are directed and controlled through standards set for the
conduct of the board of director. However, political and regulation of environment as well as
business standards and customs impact on the governance practice (Tariq,. and et.al., 2022).
The Lloyd bank board have been committed to accomplish the long term success for the
organization by being the best bank for the customer and shareholders. Although the board
follow high standards of corporate governance is laid down by Financial Reporting Council’ of

UK corporate governance code. Thus, the organization aims to comply with all the main
principles of UK code. The company Board of directors is led by board comprising a non-
executive chair, non- executive director and executive directors. It is collectively responsible
for the long term success of the organization. The role of the director is to implement the strategy
so that company an accomplish their goals in limited frame of time. It also establishes values
and standards that need to be followed by the group and ensure that company is able to control
and mitigate risk properly. The board has delegated to management the power to make decision
on operational matters, credit, market risk, liquidity as agreed in the framework. Although the
role of the chair and chief is to make arrangements that include schedule matters related to the
board for decision and reviewed annually. Moreover, there has been clear division of
responsibility on the leaders and it need to follow all the guideline that are mentioned in
corporate governance framework (Lim. and Pope, 2020) . The chair is responsible for the
leadership of the board the senior director and it guide the subordinates so that it can enhance
their growth by accomplishing the set goals. The director of the board is appointed by the
election conducted by the shareholder at the first annual general meeting. However, the director
need to be retire and it may stand for re-election. The non – executive has been appointed on
rolling 12-month basis according to the article of association of the organization. It can be
terminated without the notice or payment of compensation. There is an extensive induction
programme conducted by new directors that is design by chair to meet the individual needs of the
directors and to specify role on the board and their skills. Moreover, regular training has been
provided to the fresher so that it can learn about its new skills and have idea about what has been
expected from them. The chair of the board leads the rolling review of the board effectiveness
and the annual evaluation has been facilitated externally at least once in every three years and it
lead to greater efficiencies as well as maximize strength and highlight the areas for further
development. In order to develop an understanding of the views of the major shareholder the
board receives regular reports from the chief (Zhou, and et.al 2018) . There is regular meeting
held by the company which allow the shareholder to know about the current policy set by
company and the way it will achieve it. Although in the meeting the views of shareholder can be
taken by the chair which helps in dealing with the strength and weakness of organization as well
as to identify the area of development. However, board has been supported by its committees
which will make recommendation to the board on matters related to delegation as well as in

particular relation to internal control risk, financial reporting and governance. All this
community helps the board to deal with the factor which can affect the organizational structure.
The company also maintain transparency between the employees and customer in order to gain
their trust. The company also follow legal rules like employment act which helps the company in
making the contact between the worker. This act also protects the right of the employees in case
of any discrimination conducted by the seniors. The organization is also banded by company
act.
Task 3
The importance of business ethics and corporate governance in the global financial services
industry.
The business ethics refers to process of adopting or implementing the appropriate business
polices and moral values in the organization . The business ethics involve the moral values
which includes transparency, honesty, loyalty trust in the development of policies and procedure
for the welfare of the organization, employees and customer. The business ethics is something
that cannot be avoidable by the business enterprises for the success of then company. The
business ethics is linked with the corporate governesses as it is considers as the survival factor
of the organization. The business ethics is important for increasing the sales ODF the company
and improving the brand value ineffective as well as efficient manner (Sahar, Zulkifli. and
Zakaria, 2018). In context to that the organization should be concerned about the people and
environment rather than focusing on increasing the profit of the company only. It delivers
assistance to the organization in leading the market for the long period. Due to the business
ethics the organization can sustain the value and the resources in effective as well as efficient
manner. Apart from that it deliver assistance in increasing the sales of the company as it create
impression on the peoples in adequate manner. On the other hand it works the opportunity for
the business enterprise for reducing the expenses of the company in a proper manner. In context
to that it deliver security and safety to the business enterprises. It delivers assistance in
motivating the employees of the organization in a proper manner. The business ethical in the
financial organization like Lloyds bank group enhance the confidence of the consumer and
develop good business relationship with the large numbers of the consumer or the clients.
The corporate governances refer to the bifurcation of the rules and responsibility of the company
that deliver assistance in generating higher sales and revenue from the domestic as well as

international marketplace. The corporate governances or the ethical values of the company
encourage or motivate the employees to increase their employability and bring the productivity
in the organization. Due to the business ethical and the corporate governances the organization
is able to deal with the various forthcoming challenges which is associated with the company
and the employees. Business ethical is the way of delivering values to the employees and
provide comfort environment or culture to work. The corporate governances deliver assistance in
promoting the financial values of the company. In the global financial services the business
ethics and corporate governances are highly responsible for stakeholders (Moriarty, 2019).
The components of corporate governances includes board of directors, management, workers,
customers, suppliers, regulators etc. the ethical issues related to the activities of Lloyd Banking
Group is associate with the mis-selling measures among the workers of the organization. In
context to that the organization is not offering the adequate bonuses to the people. For instance
the bank offering the bonus to the employees as per their performances which demotivate other
workers or increasing the negativity among the workers of the organization. Apart from that the
organization or the bank offering the various packaged bank account with the chargeable amount
which do not satisfy the customer and not willing to accept by the consumers. Along with that
the organization mishandling payment protection claim which is rejected by the organization in
an unfair manner. The main ethical issues associated with the organization is of money
laundering which is illegal according to the corporate governance and not accepted by the
business ethical. This is affecting the value of the company. Therefore, the company need to
focus on the various issues that need to resolve for the welfare of the bank (Steckler, and Clark,
2019).
Task 4
Evaluation of CSR Policy
It is defining as form of self-regulation that reflect business accountability and commitment to
contribute certain amount of capital or conduct activities which are beneficial for environment.
In general terms it can be define as contribution of company in uplifting the lower society as well
as to solve the social measures. In addition to this, it plays crucial role in enhancing the brand
name of the company by attracting large customer and investor. Moreover, organization can
implement four types of CSR efforts like ethical labour practice, charity work and volunteer
projects. Although there are some ways through which company can promote CSR is through

equality, diversity and inclusion of workplace. However, while conducting the activities of CSR
it is important for the organization to align its values, mission and issue with the company goal
and culture. The company can usually have done this volunteer or hire third party to conduct
such activities (Liu, and et.al 2018.) . The CSR is important for the organization as it contributes
in retaining employees as nowadays many workers are focused on people, plant and revenue. It
has been found that employees stay longer in the company that share values and conduct
initiatives related to company values. Moreover, it also increases the range of investor which
helps in having advantage in long and short term both. CSR goes along with social, governance
and environmental Metrix that helps analyst to quantify the company efforts.
The company have made a public commitment to help communities in various ways like
colleague volunteering and support organization with help of donation and it also conduct
fundraising for their charity partner and mental health UK. Although organization also runs
number of community investment programmes as well as encourage their worker to volunteer
their time and share expertise support in programmes. This type of activities is conducted in
order to create awareness about some social and mental issues going on in the market. In such
programmes local authority has been involve like local charities and community as well as non-
profit organization or social enterprise (Zaman, and et.al 2022.). Furthermore, Lloyds is also
contributing in building the awareness about raising educational standards which will be
beneficial for both students, communities and business as they mainly rely on hiring local
talent. Although the company has conducted award winning social programme which aims at UK
students. It is also in partnership with leading universities of UK and all these educational
programmes helps in supporting the graduate level students and lower income household
individual to find employment (Kovermann, and Velte, 2019.).
Lloyd provide full scholarship package which also include financial support and it do give paid
internship within their banking group as well as monitor them through workshop which helps in
developing employability skills. In addition to this, the company is trying to work and advocate
in digital skills and inclusion in the UK and it has been done through end to end approach by
leveraging the data, open source of internal training and expertise for the benefit of the customer.
The company is also giving funds to entrepreneur so that it can start up and grow business which
can tackle some of the most difficult social issues within their communities. Although this
contributes in helping people, business and communities all across the UK. Moreover, the

purpose of support the recovery of British business which has been affected by the pandemic that
enables customer to help Britain. In addition to this, the organization is supporting black business
as well as community in order to upgrade the society. The company is also providing credit
union to the people so that it can buy things. Although credit union plays vital role in the society
by providing lending to consume who is eligible for the products due to low credit score. It helps
in improving the public by thriving the communities to have successfully piloted customer
signpost. In addition to this, the organization also conduct activity related with skill volunteering
programme at least one day per year. In this volunteers with use their own skills to support
charity and community group or develop the skills of other in those cause. It is in any forms like
digital champions or financial literacy (Adnan, Hay, and van Staden, 2018.).
CONCLUSION
From the above report it will be concluded that the business ethical play major role in improving
the values of the company in effective as well efficient manner. Due to the ethical values the
company offer huge support to the workers and deal with the various challenges. The report
mentioned the ethical issues that the company is having along with the rules of governances.
Furthermore, the report shade a light on the corporate social responsibility which is the essential
element for the business enterprises.

REFERENCES
Books and journals
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Kovermann, J. and Velte, P., 2019. The impact of corporate governance on corporate tax
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Taxation, 36, p.100270.
Lim, A. and Pope, S., 2020. Three types of organizational boundary spanning: Predicting CSR
policy extensiveness among global consumer products companies. Business Ethics: A
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Liu, and et.al 2018. CSR in an oligopoly with foreign competition: Policy and welfare
implications. Economic Modelling, 72, pp.1-7.
Moriarty, J., 2019. Business ethics. Oxford University Press.
Sahar, E., Zulkifli, N. and Zakaria, Z., 2018. Corporate governance integration with
sustainability: a systematic literature review. Corporate Governance: The international
journal of business in society.
Sierra-Garcia and et.al 2018. Empirical analysis of non-financial reporting by Spanish
companies. Administrative Sciences. 8(3). p.29.
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1004.
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Zaman, and et.al 2022. Corporate governance meets corporate social responsibility: Mai,
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Zhou, Z. and et.al., 2018. Corporate social responsibility excites ‘exponential’positive employee
engagement: The Matthew effect in CSR and sustainable policy. Corporate Social
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