Analysis of Corporate Social Responsibility and Governance Editorial

This assignment presents an analysis of two editorials concerning corporate social responsibility (CSR) and governance, particularly in the context of the Westpac Bank scandal. The first editorial, written for the Australian Financial Review, critiques the bank's handling of money laundering allegations, the CEO's departure, and the ethical concerns arising from the remuneration of executives despite poor performance and regulatory breaches. The second editorial, intended for the Courier Mail, presents a contrasting viewpoint, emphasizing the bank's commitment to governance, its response to the allegations, and its efforts to address the issues. The analysis highlights the different perspectives on the same case, the stakeholders involved, and the impact of the issues on them. The assignment also emphasizes the importance of research in understanding the business environment and constructing cohesive arguments from different viewpoints.

Management
Corporate Social Responsibility and Governance

Editorial for Australian Financial Review
In midst of the globalisation and complex business activities, corporate social
responsibility holds prime significance because of the varied range of stakeholder groups.
One of the renowned organisations of Australia has recently faced the allegations of money
laundering breaches of 23 million in numbers and a full inquiry has been launched by the
Australian Prudential Regulation Authority. The significant point to be noted is that as the as
the Chief Executive Officer of the company Brian Hartzer departed from the company in
December, not only he was given 12 months’ notice period, but also would be paid salary for
the said notice period. This act raises serious ethical concerns on the lines that the concerned
breaches were in relation to the children sexual assault and exploitation, and money was
being transferred to Philippines in the failure of audit of transactions. It would not be wrong
to state that the ignorance as purported above lead to such heinous crimes go undetected in
the society and thus, is a serious failure of the corporate social responsibility on the part of
the organisation (Hall & Carey, 2019). In the words of the regulatory authority AUSTRAC,
the above mentioned regulatory breach is due to the indifferent attitude of the senior leaders
of the organisation and the inadequacy of the oversight responsibilities, which is the prime
duty of the management of any enterprise. The fact that the shareholders also favoured the
exit the exit of the top governing individuals in the form of the votes highlight that it is the
duty of the senior executives of the corporates to own accountability for the illegitimate acts
of the organisations under their leadership.
In addition to the corporate governance issues stated above, it is vital to highlight the
fact that in spite of the money laundering allegations and the profitability levels felling down
by 16 percent in the concerned year, Mr. Hartzer was entitled to the remuneration of more
than $ 5 million. This raises yet another serious ethical concerns in the form to the fact that as
the CEO of the company like above continue are highly remunerated in spite of irregular
functioning of the companies, the CEO tend to loss their sense of responsibility and
vulnerability to the performance of the entity they are leading. Hence, it would not be wrong
to state that as the CEOs are highly compensated and the other stakeholders of the company
suffer in contrast, the perceptions of the CEOs like above is that they are not likely to be
exposed to losses out of the business. Thus, it can be stated that there has been an overall
failure of the risk and governance within the entity and grave concerns are raised regarding
the functioning of the corporates.

Editorial for the Courier Mail
The entity Westpac Bank continues to remain the country’s one of the most renowned
organisations and is recently in news for the Chief Executive Officer of the company stepping
down in midst of the money laundering allegations. It is important to highlight that the
decision of stepping out has been on the lines of the abidance of the voting mandate as
extended by the shareholders of the company and has nothing to do with the breaches of the
accountability on the part of the senior executives of the company. The company and the
board of directors are fully committed to their responsibilities of governance and oversight.
In the words of the Chairman of the entity Lindsay Maxsted, the board of the
company understands its responsibility and is “truly sorry” for the extreme allegations of the
prudential regulatory authority (Vercoe, 2019). It is additionally vital to note that the
company has responded to the allegations by instituting an independent enquiry and it has
been stated by the Chairman of the company that the board is fully dedicated to the fixation
of the alleged issues. The independent enquiry initiated by the independent experts would aid
the entity in the reviewing of the efforts of the company in the legal compliances of the
counter-terrorism and anti-money laundering financing laws. Further to note, the entity is also
in talks with the varied community groups to examine the further steps that can be taken to
address the issues of the child exploitation in society. In the words of Hartzer, the
organisation has improved considerably over the past few years in varied areas such as the
risk assessment and the resources have improved substantially for the management of such
issues. Further, the changes have been made in the leadership in financial crime, in the form
of the new Chief risk officer in the company (Morgan & Janda 2019). In previous instances
of the committed leadership, the CEO Brian Hartzer had supported the statement extended by
the Banking Royal Commission that it is important to manage the non-financial risks of the
businesses, as prudently as the financial risks, which highlights the overall business culture of
the entity (Eyers, 2019). The entity is combined to fix the human and technical failings in the
international funds transfer instructions reporting, that led to such questionable transfers of
the funds.
Thus, the above discussions lead to the conclusion that the company has been
dedicated in the maintenance of the organisational culture and would take necessary steps to
address the allegations by the regulatory authorities.

References
Eyers, J. (2019). Westpac CEO Brian Hartzer backs Kenneth Hayne on bank culture reform.
Retrieved from: https://www.afr.com/companies/financial-services/westpac-ceo-
brian-hartzer-backs-kenneth-hayne-on-bank-culture-reform-20190208-h1b1ah
Hall, J. & Carey, A. (2019). Westpac’s bizarre leaked comments slammed as ‘unbelievable
and unforgivable’ Retrieved from:
https://www.news.com.au/finance/business/banking/westpac-ceo-brian-hartzers-
bizarre-staff-email-in-wake-of-child-exploitation-scandal-revealed/news-story/
eea13d7c683a32debca85ffeb6e13842
Morgan, E. & Janda, M. (2019). Can Westpac's Brian Hartzer survive the human
consequences of money laundering? Retrieved from:
https://www.abc.net.au/news/2019-11-21/westpac-hartzer-austrac-money-laundering-
analysis/11724092
Vercoe, P. (2019). Australia’s Westpac Bank Apologizes for Money Laundering, Links to
Child Abuse Funds. Retrieved from:
https://www.insurancejournal.com/news/international/2019/11/22/549280.htm