Principles of Finance: CBA's Ethics, CSR, and Financial Decisions

This essay critically evaluates the financial practices and decisions of the Commonwealth Bank of Australia (CBA), particularly focusing on its insurance arm, CommInsure, and its involvement in unethical activities such as misusing medical reports and denying legitimate claims. The analysis is conducted through the lens of Corporate Social Responsibility (CSR) principles, ethical theories, and sustainability considerations. The essay identifies breaches of ethical principles like beneficence, least harm, respect for autonomy, and justice, and discusses these violations in the context of deontological and utilitarian ethical frameworks. It also examines whether sustainability and socially responsible outcomes matter to CBA, referencing the company's stated vision and initiatives, while concluding that the study helps in understanding CBA's practices and financial decisions bearing in mind the ethical principles of the firm.

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Accounting and Finance
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Table of Contents
Introduction................................................................................................................................2
Body...........................................................................................................................................2
Critical evaluation of practices of CBA and financial decisions...............................................2
Discussion whether sustainability and socially responsible outcomes matter for CBA............4
Identification of ethical principles breached by CBA................................................................4
Discussion of ethical violations with reference to relevant ethical theories..............................5
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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Introduction
The current study elucidates in detail about ethics and corporate social responsibility that
refer to accountability of a corporation for the impacts of its decisions on society with
reference to the operations of the firm CommInsue. CommInsue is the insurance arm of the
firm Commonwealth Bank of Australia that was involved in diverse deceitful exercises
namely misusing of medical reports counting deleting files and compelling doctors to later
their opinions so that the claims of the clients can be rejected, altering definition of disease,
delaying payouts and many others. In this regard, the study at hand thereby intends to
examine ethical principles and financial decisions of the firm Commonwealth Bank (CBA).
In addition to this, this study also has the intent to assess whether sustainability as well as
socially responsible outcomes matter for the firm CBA and identify violations of CBA.
Moving further, the study also intends to discuss elaborately ethical violations with
orientation to particular theories.
Body
Critical evaluation of practices of CBA and financial decisions
As regards CSR practice of the firm Commonwealth Bank (CBA), the group declared new
vision developed for excelling at securing and augmenting the overall financial well being of
individuals, businesses as well as communities. Essentially, the new vision also develops
customer centric culture and intends to get better and persistently improve in all the
operations undertaken. Corporate Social Principle of the company CBA is outlined in the
pecuniary report of the firm as a group strategy as well as sustainability approach. The
sustainability strategic framework concentrates on five different areas, upholds the vision and
generation of enduring value for the customers, individuals, shareholders along with wider
community (Schwartz 2017).
The sustainable framework includes the following:
Sustainable business practices take in exercises of strong governance, instituted
management systems, accountable procurement along with transparent reporting (Tai and
Chuang 2014)

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Accountable Financial Services of CBA undertakes a responsible tactic for the provision of
various financial products as well as services.
Engaged as well as Talented People of CBA lure develop and retain different, engaged as
well as talented workforce.
Community Contribution as well as Action carries out impactful contributions to the
societies by means of mutually beneficial partnerships (Carroll 2015)
Policy of Environmental Stewardship helps CBA to become more proactive in enumerating
and lessening overall environmental footprint and deliver smart and effective solution to aid
the customers as well as employees lessen their own (Bhattacharya et al. 2017)
Analysis of pecuniary reports published by the company Commonwealth Bank (CBA)
reveals the fact that the Group delivers funds to over and above 2 million owners of home.
Particularly, disburses interest payments to over and above 11 million retail saving as well as
transaction account holders (Tran 2018).
With approximately 52000 individuals, the annual payroll expends of the group is more than
$5 billion. Essentially, the group necessarily returns around 75% of the earned profits to in
excess of 800000 Australians who necessarily hold the shares directly together with millions
more who essentially hold these by means of superannuation funds (Tran 2018).
In essence, the group also disbursed in excess of $3 billion in taxes in the financial year,
thereby making the company CBA the fourth largest payer of tax. In addition to this, the
group also directly aids over 200 grassroots community corporations. This exerts a positive
influence on overall health as well as wellbeing of the youths of Australia (Vertigans and
Idowu 2017). Furthermore, the group also presented a wide array of programs on
development of financial literacy to over and above 280000 students across the nation.
Discussion whether sustainability and socially responsible outcomes matter for CBA
Sustainability along with social responsibility is said to really matters for the company CBA.
This is evident from the new vision of the company that is extremely customer centric and
has the intention to continually get better in everything the company does. The management
of the firm intends to evolve particularly the corporate strategy and continue to embrace the
significance of Environmental, Social as well as Governance (ESG) contemplations in a

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swiftly transforming operating environment (Cheng et al. 2014). In addition to this, it is
evident from initiatives of the firm that sustainability as well as socially responsible results
really matter for the firm. For instance, the company has achieved the target of 20% reduction
in carbon; company has ranked 1 in customer satisfaction in different areas of business,
participated in around 3520 primary school banking programs and many others. In addition to
this, it can be observed that
Identification of ethical principles breached by CBA
The ethical violations of the firm Commonwealth Bank (CBA) can be analysed from the
latest scandals that engulfed the bank particularly the insurance business of the corporation.
In addition to this, the insurance arm of the company that is the CommInsue primarily entered
into unethical practices of undertaking deceitful exercises. This included misusing of medical
reports, deleting several files and compelling doctors to change their opinions for rejecting
the claims of the clients. The management of the firm in this way intended to reduce the
payouts in terms of claims of the client although the clients diligently paid the premiums.
Essentially, there are extraordinary substantiations that are identified and uncovered in this
regard that can help in supporting the unethical treatment by the business unit (Saeidi et al.
2015). In itself, there are also allegations of different claim managers who necessarily were
cherry picking various doctors for getting prognoses they want. In this way, doctors were
persuaded to alter their opinions. Fundamentally, these unethical practices added to the
trauma of the sick as well as suffering customers.
The ethical principles that are necessarily breached at the firm include the following:
Beneficence: This ethical principle essentially guides various decision makers to do what is
correct as well as good. In this case, to do good necessarily makes ethical perspective and
probable solutions to an ethical dilemma (Korschun et al. 2014). In particular, this principle
is also associated to principle of utility and this talk about the need to generate largest ratio of
good over evil in the entire world. The management of the firm CBA have failed to do good
to the claimants who have diligently paid premiums for years. Therefore, this principle is said
to have been violated.
Least Harm: This ethical principle mentions that least harm handles situations in which no
option appears beneficial. However, in this regard, decision makers intend to select to
undertake activities that would do the least harm and things that mete out harm to the fewest

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people (Dias et al. 2018). As such, this ethical principle is also violated in this regard as the
insurance unit of CBA have meted out tremendous harm to the insurance claimants by
obtaining fraudulent ways.
Respect and reverence for autonomy: This specific principle mentions that decision making
have the need to concentrate on permitting people to be autonomous and to be able to make
decisions that are applicable to their lives (Wang et al. 2016). Therefore, individuals have the
need to maintain control their lives as much as possible as they are the only people who
entirely understand their own lifestyle.
Justice: The ethical principle of justice talks about the need to concentrate on activities that
are to some extent fair to the ones engaged. This refers to the fact that ethical decisions have
the need to be consistent with the specific ethical themes (Wang et al. 2016). In case of CBA,
this principle has also been breached as the insurance wing of the firm have failed to remain
fair. By ways of unfair means, management of the corporation has rejected claims in order to
avert huge payouts.
Discussion of ethical violations with reference to relevant ethical theories
The deontological themes of ethics that are applied for decision making stresses on ethical
dilemmas that are significant and directs towards most ethically appropriate resolution.
Ethical concerns in insurance corporations include utilitarianism and deontology. The
former perspective concentrates on greater good or collective, whilst the latter concentrates
on personal duties. Basically, insurance businesses of the Commonwealth Bank have
breached the ethical principle of utilitarianism as they have failed to do good and deceitfully
violate the rights of claimants. Again, individual customer alternatively is to some extent
deontological. They necessarily take into account needs as the first as well as foremost
concern with no pertinent interest outside the policy of insurance. There are several concerns
that take place when providers of insurance fail to comprehend these areas of concern,
undertaking practices that ignore personal objections (Carroll and Buchholtz 2014).
Therefore, this is an area where rules/principles are violated for the corporation. Even for
legal, personal or else humanitarian causes, ethics cannot be ignored. In ethical themes
founded on rights, the specific rights instituted by a community can be protected and given
highest priority. In this case rights are necessarily considered ethically appropriate and valid
as large population endorses the same. This theory is also violated in the case of CBA.

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Conclusion
The ethical violations with orientation to ethical themes relevant to the current case are
explained in this study. In conclusion, it can be said that the current study helps in
understanding the practices of CBA and financial decisions bearing in mind the ethical
principles of the firm. Also, the study also aids in comprehending whether sustainability and
socially responsible outcomes really matter for CBA and identifies ethical principles that are
breached by CBA. Moving further, the study at hand also explicates in detail about ethical
violations with reference to relevant ethical theories.

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References
Bhattacharya, C.B., Korschun, D., Sen, S. and Routledge, H., 2017. Corporate social
responsibility. Journal of International Law, 26(2).
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and
stakeholder management. Nelson Education.
Carroll, A.B., 2015. Corporate social responsibility. Organizational dynamics, 44(2), pp.87-
96.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to
finance. Strategic Management Journal, 35(1), pp.1-23.
Dias, A., Rodrigues, L.L., Craig, R. and Neves, M.E., 2018. Corporate social responsibility
disclosure in small and medium-sized entities and large companies. Social Responsibility
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Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility,
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Marketing, 78(3), pp.20-37.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate
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Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Tran, B., 2018. Corporate social responsibility. In Encyclopedia of Information Science and
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Vertigans, S. and Idowu, S.O., 2017. Corporate Social Responsibility. Springer International
Publishing:.

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Wang, H., Tong, L., Takeuchi, R. and George, G., 2016. Corporate social responsibility: An
overview and new research directions thematic issue on corporate social
responsibility. Academy of Management Journal, 59(2), pp.534-544.