An Analysis of Corporate Governance in the Crown Resort Scandal

This essay delves into the corporate governance failures of Crown Resort, examining the scandal that arose from its alleged links to Asian crime gangs and its expansion into the Chinese market. The analysis focuses on the role and independence of the Board of Directors, particularly the practice of having an executive chairman who also serves as CEO. The essay argues for power decentralization, advocating for an independent chairman. It explores the importance of transparency, ethical business practices, and the impact of globalization on corporate governance. The case study highlights the significance of corporate governance in ensuring sustainable business practices, accountability, and the development of brand image. The essay references newspaper articles, peer-reviewed journals, and empirical evidence to support its arguments, concluding that strong corporate governance is crucial for ethical and sustainable business practices.

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Corporate governance is identified as one of the important aspect that can shape the
sustainable business practice for an organisation. There is surely an ethical consideration
associated with the corporate governance. In this regard, focusing on the senior executives and
the Board of Directors have a great influence on the ethical business practice of an organisation.
According to Dimopoulos and Wagner (2016) the Board of Directors is entitled to oversee the
governance and management of a company and monitor the performance of the senior
management. This is the general perception regarding the role and function of Board of Directors
in Corporate Governance. In other words, Levit and Malenko (2016) pointed out that the role of
the Board of Directors is to review and approve the significant corporate actions. Therefore, the
entire control and monitoring practice of an enterprise is vested on its Board of Directors.
In case of Crown Resort, the organisation was alleged to have link with Asian Crime
Gangs. The report of McKenzie, Toscano and Tobin (2019) pointed out that it was after the
casino giant tried to expand its reach to Chinese market in 2013. The scandal started questioning
the function and motive of Crown Resort and sceptical about the organisational structure that had
to have an influence over this unethical business practice. As a repercussion of this event, the
corporate governance framework of the organisation along with its organisational hierarchy had
come into the radar of the corporate governance experts. They found out some anomalies into the
profile of Board member where the organisation had a tradition of appointing its CEO as the
Chairman of the Board (Hatch 2019). Therefore, a pertinent question arises about the power
decentralisation or autonomy of the premier of the organisation. This research is trying to
establish an important argument on behalf of the power decentralisation where the Chairman
should be independent and does not have any position in the executive team.

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This event was highly articulated into leading international newspapers like The Age,
Sydney Morning Herald and 60 Minutes (Hatch 2019). There are number of important factors
that made this event as one of the important incident in the history of corporate business practice.
One of the important aspects is about the transparency of the organisational structure and its
importance in current business practice. On the other hand, the decentralisation of power is
identified as one of the important aspect that the argument tried to reinvigorate. Finally, the
ethical business practice in terms of corporate governance is also under the scrutiny of the
argument (García-Sánchez, Rodríguez-Domínguez and Frías-Aceituno 2015). Therefore, it can
be argued that there are three important facets that the argument is trying to make in order to
understand the current business practice by the business organisation.
There is definitely an obvious role of the negative impact of globalisation on current
business practice. According to Singh, D. and Delios (2017) the role of globalisation brings
enormous power in the hand of the private organisations where they can exploit the business
environment by expanding their omnipotent power all around the world. As a result of that the
domestic standards and regulations are not enough to restrict the dominance of private
organisations in current business scenario. In response to this, the ethical standard and
perspectives are also changing shapes and try to magnify the malpractices of private enterprises
from the glance of morality and sustainability measures (Ferrero‐Ferrero, Fernández‐Izquierdo
and Muñoz‐Torres 2015). It becomes a responsibility of the big corporations to consider moral
and ethical business practice so that they can survive in the long run. Increasing awareness
among the customers and clients is also a paramount aspect that the current business morality
and ethical standards are trying to add in its perspective. Henceforth, a collaborative approach

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can be seen in current business scenario where the business organisations and the consumers are
equally responded for making a sustainable business approach.
Corporate governance is considered to be one of the important aspect for sustainable
business practice for the organisations. The corporate governance practice within an organisation
is primary formulated by the organisational decision making by the management. Therefore,
transparent organisational structure is imperative for establishing effective corporate governance
framework. In case of Crown Resort, the Board of Directors and the executive team both are
controlled by non-independent member. However, from the research of Hatch (2019) it can be
stated that non-independent Chairman is not new for business enterprises. Notable Australian
Companies like Harvey Norman, TPG Telecom and Seven Group have executive chairman
(Hatch 2019). It means these companies are following a different organisational structure where
the CEO of the organisation holds the designation of Chairman in the Board of Directors.
Therefore, the purpose and motive of the executives and the Chairman is certainly play
significant role in order to bring better practice of Corporate Governance.
The fraudulency and mischievous business practice of Crown raised suspicion about the
function of its operation. The case was on 2016 when the federal police of Australia received a
security alert about a fugitive who was going to board on a luxury private jet at Coolangatta
Airport (McKenzie, Toscano and Tobin 2019). The passenger was Tom Zhou, a Crown Resort
casino high roller operative also popular as a renowned Gambler. The story also had a number of
layers where the political and criminal links cannot be overlooked. Zhou was intended to meet a
high profile personality within jet named Ming Chai. This person had no popularity in Australia
but belonged to the most powerful family in his homeland China. Ming Chai was the cousin of
Chinese President Xi Jinping (Hatch 2019). The report revealed that one of the important aspect

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of the presence of Ming Chai was developing the Chinese influence in Australia. It was
considered to be a threat to the Australian sovereignty. As an interesting fact, the leaked
corporate data of Australia showed that there was an amicable relationship between Zhou and
James Packer who had the majority of share of Crown. James Packer played the dual role of
CEO and Chairman from 2007 to 2015 (McKenzie, Toscano and Tobin 2019). As a result of that
it became a serious accusation against the Crown CEO that he had linkage with Chinese criminal
gangs. Subsequently the independence or autonomy of the Crown board was under the radar and
many experts felt that it was important for an organisation like Crown to separate its Board of
Directors from the executive body. Transparency and ethical business practices are identified as
the most important aspect that has to be followed by Crown in order to establish its Corporate
Governance framework. In addition to this, the entire Board of Directors team is under review
because of the disputes that the Board members were convicted with. For instance, Andrew
Demetriou and Helen Coonan were disputed because of their former profession. It made the
entire organisational structure of Crown futile to make corporate governance as the core of
organisational practice.
According to the research of Hong, Li and Minor (2016) it can be stated that good
corporate governance is identified as one of important aspect for accountability of the
organisation. It will help for the organisation to establish a strong social responsibility practice.
As Lau, Lu and Liang (2016) stated that the role of the organisation is to set adequate measure
for establishing social responsibly so that it will deliver better market orientation for the business
organisation Apart from that indifference on the part of the shareholders is also associated with
the role of corporate governance. It is essential for the business organisation to facilitate better
corporate governance practice so that the business can be continued effectively. Moreover,

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developing the brand image and values is also depended on corporate governance so that it will
maximise number of customers. For Crown also establishing a better corporate governance is
essential to facilitate better and proactive business orientation.
The above understanding certainly has a number of important aspect to discuss in terms
of the significance of corporate governance, understanding the implication of board of directors
in corporate governance and the importance of ethical business practices. Based on this
understanding, this essay finds out a strong correlation between the corporate governance
framework and the role of board of directors to shape ethical business practice. In course of the
discussion, choosing the case study of Crown resort scandal provides a close resemblance with
the corporate governance practice in business enterprises and its importance. First of all a clear
focus fixes on summarising the major argument of the newspaper article regarding the Crown
Resort Scandal. The outline clearly discussed that decentralisation of power is a key aspect that
strengthens the practice of corporate governance. Besides this, with the help of peer journals and
empirical evidences this essay tries to develop an ideal image of the corporate governance where
control over the organisation and focusing on the moral and ethical business practices are going
side by side. As a matter of fact, it is inarguably be cleared that corporate governance is a
pertinent aspect for the business organisations to not only set better organisational practice but
also ensure its survival in the competitive market. Therefore, it can be concluded that corporate
governance is definitely an important aspect for the business organisations that can guide the
company towards ethical and sustainable business practice.

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