University Name: MGT604 Case Study of the Commonwealth Bank

This report examines the Commonwealth Bank of Australia (CBA), a multinational bank facing significant challenges. It analyzes internal governance failures, including corruption and deficient risk management, which have led to external threats and market failures. The report highlights issues such as the removal of the CEO, management weaknesses, and failures in audit and risk committees. It also discusses external threats, including the sharing of customer information and knowledge of illegal activities. To address these issues, the report suggests strategic changes, including eliminating corruption, assessing and preparing for risks, implementing anti-corruption programs, measuring policy impacts, and improving stakeholder communication. The analysis emphasizes the need for transparency, ethical practices, and proactive risk management to regain market confidence and improve the bank's strategic position.

Running head: COMMONWEALTH BANK
COMMONWEALTH BANK
Name of the Student:
Name of the University:
Author Note:

1COMMONWEALTH BANK
This presentation will be covering the problems faced by one of the most important
banks of Australia namely the Commonwealth Bank of Australia that has been facing
different types of issues in last few years and trying to cope up with these challenges stock
the Commonwealth Bank of Australia is multinational Bank that has the businesses across
Asia, New Zealand, Australia, the United States along with the United Kingdom. For more
than a centry the organization has successfully operated in the financial and banking sector of
the country. The financial services that this Bank provides include business and institutional
banking, retail, fund management, insurance, superannuation, investment and broking
services. it is the largest Australian listed company which has the branch like ok a SBI bank,
Common Wealth securities, Common Wealth insurance, Bankwest and colonial first state
investment.
The threats of Commonwealth Bank of Australia is constantly curbing the power of
the organization to act freely. The upper class authorities are completely corrupted leading to
increase the threat for intrusion of fraud third parties other than the stakeholders. Therefore
the threat of theft, cases of money laundering and insurance problems are increasing. This is
the reason why the bank authority has removed its chief executive and hired Katherine
Livingston in the new chair. These internal problems is giving the third party to take full
advantage to exploit information and finance from this organization. As the internal
governance is completely ruined therefore, the company is failing to face the economic
changes in the country and international markets.
The Australian Prudential regulation authority has identified egregious management
weakness within the bank in the last few years. Therefore the board has asked the former
chairman to return 40% of his fees from previous financial year (Hutchens, 2019). The threat
of this organisation is mainly internal because the reports published has referred to audit and
risk committees’ failure for providing appropriate governance. In such case the leadership

2COMMONWEALTH BANK
was deficient at its highest level. The main issue is the management actually does not pay
sufficient attention to the risks are the Complaints against the auditing issues. The priority e
of such cases where to low which made the information flow excessively massage. In
opposing the reports against this Bank the management has taken approach which was
excessively legalistic as well as defensive but there was no success in taking non-financial
risks sufficiently. There is no step taken when the customers are dissatisfied with the service
and incident of online money theft has become regular problem with this back. Finally the
risk also comes from irresponsible nature of the executive committee. the senior executives of
this Bank take responsibilities for the business but do not ask for feedback from the
customers for the employees at lower level. This other reasons why the external threats are
also coming for Commonwealth Bank of Australia which is referring that the organisation
has knowledge of terrorist activity and other illegal processes like sharing personal
information of the customers with third party (Afr.com 2019). All these Threads have lead
the organisation to face failure in the international market by giving leverage to the other
competitors.
In order to solve this type of issue the strategies need to be changed which will make
policies more transparent to the stakeholders (Zamaletdinov et al., 2016). the first and
foremost action the company must take decisions for eliminating corruption and make an
anti-corruption part with the employees who are not associated with the accused managers .
these people will be e creating an anti-corruption organisational culture and policies which
will be followed in every department of the bank. Secondly the authority can assess the risks
and be prepare for those because whenever there will be strategic change or leadership
change in the organisation there will be a confusion at every level. There can be a huge
number of employee turnover and the existing suppliers may leave the organization. In such
case the company must have zero tolerance policy on the bribery and corruption. Thirdly, the

3COMMONWEALTH BANK
authority must implement anti-corruption programs integral throughout this company this
will include the value chain and every brand associated with it. Fourthly, dirty
Commonwealth Bank of Australia must measure the impact of this anti-corruption policies so
that it can identify what is actually working and what section need more focus. Finally the
communication with the stakeholders and most importantly the employees and customers will
be giving positive results. through proper communication system the stakeholders will be
understanding the initiatives for or eliminating corruption in the internal environment of
Commonwealth Bank of Australia.

4COMMONWEALTH BANK
References:
Afr.com. (2019). How Commonwealth Bank got itself into such a mess. Retrieved 21 July
2019, from https://www.afr.com/news/economy/cbas-ordeal-does-australia-a-service-
20180502-h0zizj
Hutchens, G. (2019). The biggest banking scandal is that everyone knew – but still did
nothing. Retrieved 21 July 2019, from
https://www.theguardian.com/australia-news/2018/nov/24/the-biggest-banking-
scandal-is-that-everyone-knew-but-still-did-nothing
Zamaletdinov, R. R., Yudina, N. P., Lavrentyeva, E. I., Savva, L. I., & Pugacheva, N. B.
(2016). Practical Recommendations on the Improvement of the Effectiveness of Anti-
corruption Policy in Universities. International Review of Management and
Marketing, 6(2), 390-396.