Corporate Governance and Business Ethics: An Analytical Report

This report provides a comprehensive analysis of corporate governance and business ethics, exploring their interconnectedness and significance in the business environment. It defines corporate governance as the system that controls and directs business entities, and business ethics as the moral principles guiding business operations. The report then delves into the specifics of two ASX principles: acting ethically and responsibly, and making timely and balanced disclosures. It evaluates these principles in the context of the Commonwealth Bank (CommBank), examining how the bank aligns its practices with these guidelines. The report highlights CommBank's commitment to corporate responsibility and its initiatives in education, innovation, and fair business operations. The report also identifies the principles within CommBank's corporate governance statement. The conclusion emphasizes the importance of ethical working patterns, recommending the implementation of strict ethical approaches, models, and monitoring teams to ensure compliance with corporate governance principles. The report uses relevant references to support its claims.

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Corporate Governance and Business Ethics
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Corporate Governance and Business Ethics
Executive summary
From the executed analysis it has been summarized that corporate governance is a
system which comprises of norms, operations, and procedures, through which the business
entities are controlled and operated. The below-presented report involves the principles of
corporate governance statement and which are required to be followed by each and every
business corporation. Moreover, evaluation of same principles has been done in the analysis.

Corporate Governance and Business Ethics
Contents
Introduction................................................................................................................................4
Corporate governance and its relation to business ethics...........................................................4
Corporate governance.............................................................................................................4
Business ethics........................................................................................................................4
Relation to corporate governance and business ethics...........................................................5
Explanation of two ASX principles...........................................................................................5
Principle 3 Act ethically and responsibly...............................................................................6
Principle 5 Make timely and balanced disclosure..................................................................6
Evaluation of Commonwealth....................................................................................................6
Introduction of the company..................................................................................................6
Evaluation of principle 3........................................................................................................7
Evaluation of principle 5........................................................................................................7
Finding principles in accounting company’s corporate governance statement.........................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8

Corporate Governance and Business Ethics
Introduction
The concept of corporate governance has been considered as the management and
arrangement of norms, standards, regulations and the practices, coordinating and controlling
the business corporation. The term can also be referred as the description of the framework of
the rule and relationships systems and procedures and these are the guidelines by which the
authorities control and coordinate the corporation (Tricker, & Tricker, 2015). Corporate
governance fundamentally incorporates changing the premiums of an association's various
accomplices, for instance, financial specialists, organization, customers, suppliers, loan
specialists, government and the gathering. Business ethics (generally called corporate ethics)
are a kind of associated ethics or master ethics that investigations moral norms and good or
good issues that rise in a business area. It can be implemented in all the parts of the business
coordinate and is germane to the lead of individuals and entire affiliations. In the below-
mentioned report, discussion is based on the corporate governance as well as business ethics.
Along with this demonstration on ASX, principles have been executed.
Corporate governance and its relation to business ethics
Corporate governance
The corporate administration is the systems, mechanism, and bonds by which the
business corporation are management and assisted. The organizational structures and the
limits prescribed determine the dissemination of rights and accountability among various
individuals in the agreements, for instance, the managerial superiors, directors, team-leaders,
investors, controllers, and all other partners, assimilate the assumptions and procedures for
settling on choices in corporate affairs (Idowu, Zu & Gupta, 2013).
Business ethics
The concept of business ethics are the frameworks and the guidelines which are
prescribed or are expected to be followed by the business corporation. The business ethics
tends the business entity to understand the difference between what is right and what is
wrong. Large portions of these qualities are never again taken after. Therefore, there is no
certain ethical compass to control pioneers through complex situations about what is correct
or off-base (ArAs, 2016).
Business ethics are the direct that a business sticks to in its ordinary dealings with the world.
The ethics of a particular business can be unique. They apply not only to how the business
teams up with the world all around, yet moreover to their one-on-one dealings with a lone
customer. To a couple of individuals, associations are possessed with benefitting, and that is
the essential concern. It could be called free venture in its purest shape. Benefitting is not
wrong in itself (Gitman, Juchau & Flanagan, 2015). It is simply the way in which a few
organizations act that raises the subject of moral conduct.
Relation to corporate governance and business ethics
Business morals and corporate administration are two noteworthy components that
affect an organizations working and functionalities. Business morals speak to the qualities,
standards or attributes that an organization takes after when directing business in the
economy. The connection amongst morals and administration originates from an association's

Corporate Governance and Business Ethics
proprietor or official supervisors, who make the administration and choose which moral
standards workers will take after.
Business morals regularly take after a standardizing hypothesis. This hypothesis
expresses that people and firms will take after moral rule that are ordinarily found in the
public eye, thus the term regularizing, or standard, morals. Three regularizing ethics
hypotheses incorporate investor, partner, and social contract speculations (Larcker & Tayan,
2015). The investor moral hypothesis expresses that an organization ought to make a
connection between business morals and corporate administration that spotlights on investors.
Supervisors will utilize procedures and exercises that progress or increment the speculations
of investors.
Another moral hypothesis is the social contract hypothesis. This hypothesis
concentrates on organizations that enhance the general welfare of society. Investors might be
less eager to put cash into an organization that takes after this moral hypothesis, as investors
may lose cash to causes or different advantages that are outside of the organization's ordinary
working setting. To make financial specialists completely mindful of the organization's social
contract hypothesis of morals, entrepreneurs, administrators, and board individuals will
regularly incorporate this data in the corporate administration.
Another connection between business morals and corporate administration is an
organization's statement of purpose. The statement of purpose plainly traces an organization's
arranged standard of perfection for working in the business condition (Effross, 2014). This
statement of purpose can concentrate more on a social part of the operations as opposed to a
benefit thought process to reimburse investors. In these sorts of organizations, investors will
put resources into the organization since they put stock in the organization and want to see
the organization prevail in its social mission.
Explanation of two ASX principles
The term ASX has been referred to the largest securities exchange in Australia which
was established in 2006. This securities exchange has been established as the outcome of the
merger of the Australian Stock Exchange and the Sydney Features Exchange (m.asx 2017).
ASX is a publicly-traded corporation and is also traded on its own exchange. Contemporary
means of exchange are been executed within the corporation for trading and also stock and
derivatives are traded within the association. Moreover, co-regulation itself with the
Australian Securities and Investment Commission has been done.
Principle 3 Act ethically and responsibly
The reputation of any of the business entity is one of the most valuable assets and it
should not be violated (Bain & Band, 2016). The stakeholders and the investors have a great
expectation regarding the ethical and responsible behavior of the listed corporation. There is
only one recommendation which has been stated and is required for the entity to act
accordingly:
 The presence of a code of conduct is essential for the directors, seniors managerial
authorities and other employees.
 Disclosure of the code or the summary should be done.

Corporate Governance and Business Ethics
Contradicting the above-mentioned statements, the modified version of 2010 encompasses
the below-presented facts:
 The business operations executed should be maintaining the confidence in the
corporation’s integrity (asx 2017).
 Legal obligations and the reasonable expectations of the clients and the stakeholders
should take into account by the business practices.
 Moreover, it has also been stated that responsibility and accountability of the
individuals for reporting and monitoring reports of unethical operations.
Principle 5 Make timely and balanced disclosure
On the basis of the survey, it has been stated that the listed corporations are required
to make timely and balanced disclosures. And on the basis of the amended report of 2010, the
entities are required to promote timely and balanced disclosures of all material matters which
are related to the firm. But further in 2014 version the term “material” has been omitted. The
modified version states that all the listed organizations are required to make timely and
balanced disclosures of all matter associated that a reasonable individual would expect to
have a material effect on the value of the securities (investor.austal 2016). The below
mentioned are the recommendations which a listed corporation should:
 The corporation should have a policy in written form which should comply with its
continuous disclosure obligations under the norms of listing.
 Disclose that approach or rundown of the same
Evaluation of Commonwealth
Introduction of the company
Province has been positioned as one of the main banks in Australia and is likewise the
main supplier of coordinated budgetary administrations. These administrations involves the
retail, premium, business and institutional saving money, administration of assets,
superannuation, insurance, wander and offer broking things and organizations. The business
entity has also been considered as one of the recognized brand name in the Australian
financial services sector (Commbank 2017). The business entity has been focusing the
corporate responsibility plans in driving positive changes by developing education,
innovation, and fair business operations. Moreover, the corporation has eight initiatives
which are aligned with these focused areas, which are presenting and dictating the
commitment of the establishment of sustainable long term values.
Evaluation of principle 3
As mentioned above in the principle the business entities are required to operate
ethically and responsibly. This will aid the entity in enhancing the image, as it is the most
valuable assets (Commbank 2017). This will enable the corporation to build strong relations
with the stakeholders which have been considered as one of the significant components in the
success and growth of the entity. As stated in the principle presence of the code of conduct is
essential for the management and all other individuals, as it sets the guidelines for the social
norms and religious regulations and proper practices. This will enable the corporation in
minimization of the errors or unfair practices which in-turn will develop goodwill. Moreover,

Corporate Governance and Business Ethics
legal obligations and the reasonable expectations of the stakeholders should take into account
by the business practices which will be proven beneficial in long run.
Evaluation of principle 5
On the basis of the survey, it has been determined that the listed corporations are
required to make timely and balanced disclosures. This will be enabling the stakeholders and
the investors about the fair practices and the policies under which the entity is operating the
business activities. This will also aid the entity in building confidence and trust amongst the
stakeholders and which will be proven beneficial for the image of the corporations. For
instance, a clear and timely disclosure of all the policies and the plans done by the
CommBank will encourage the investors to invest more amounts in the corporation.
Finding principles in accounting company’s corporate governance statement
As observed from the Commbank corporate governance statement the Principle 3 i.e. acting
ethically and responsibly has been mentioned in the “Statement of Professional practice”.
And Principle 5 .i.e. timely and balanced disclosures have been described in “Workplace
Responsibilities, Behaviours, and Compliances”.
Conclusion
In the limelight of the above executed analysis, it has been inferred that corporate
governance which is the mechanism of the norms, practices, and procedures through which
corporation is controlled and directed. The concept has been considered as very much
significant for balancing the interest of all the stakeholders of the company. The corporate
governance statement can be improved by executing the business operations and activities as
per the stated guidelines in the statement.
Recommendation
 From the above executed analysis it can be concluded that the business entity should
focus on ethical working patterns and for which there should be implementation of
some strict approaches and models concerning to ethical working.
 Also the entity can develop a monitoring team for keeping an eye on the practices and
the operations executed within the organization. This team should be liable of
ensuring the work as per the principles and guidelines stated in the corporate
governance statement.

Corporate Governance and Business Ethics
References
ArAs, G. 2016. A handbook of corporate governance and social responsibility. CRC Press.
asx, 2017, Corporate governance principles and recommendations, Assessed on 19th August
2017, .
Bain, N., & Band, D. 2016. Winning ways through corporate governance. Springer.
Commbank, 2017, Corporate Governance, Assessed on 19th August 2017, .
Commbank, 2017, About CommBank, Assessed on 19th August 2017, .
Effross, W. 2014. Corporate Governance: Principles and Practice. Wolters Kluwer Law &
Business.
Gitman, L. J., Juchau, R., & Flanagan, J. 2015. Principles of managerial finance. Pearson
Higher Education AU.
Idowu, S. O., Zu, L., & Gupta, A. D. 2013. Encyclopedia of corporate social
responsibility (Vol. 21). N. Capaldi (Ed.). New York: Springer.
investor.austal, 2016, Principle 5: Make timely and balanced disclosure, Assessed on 19th
August 2017, .
Larcker, D., & Tayan, B. 2015. Corporate governance matters: A closer look at
organizational choices and their consequences. Pearson Education.
m.asx, 2017, About ASX, Assessed on 19th August 2017, .
Tricker, R. B., & Tricker, R. I. 2015. Corporate governance: Principles, policies, and
practices. Oxford University Press, USA.

Corporate Governance and Business Ethics