Dissertation on Governance and Ethical Dilemma: Lloyds Bank Case Study

This dissertation explores governance and ethical dilemmas within Lloyds Bank, a major commercial bank operating in England and Wales. The study investigates the ethical issues faced by the bank, including information discrepancies, customer service challenges, and financial practices impacting customer satisfaction. The research aims to understand these issues, analyze existing policies, and assess their impact on customers. The methodology involves an interpretive research philosophy and an inductive approach, utilizing secondary data sources such as books, journals, and articles. The dissertation is structured to include an introduction, literature review, methodology, data analysis, and conclusions with recommendations for improving ethical practices and corporate governance within Lloyds Bank. The study seeks to provide insights into the significance of ethical codes in the financial sector and propose strategies to meet both corporate and ethical requirements, ultimately enhancing customer satisfaction and trust.

DISSERTATION ON GOVERNANCE AND ETHICAL
DILEMMA: A CASE STUDY ON LLOYDS BANKS

TABLE OF CONTENTS
Proposal............................................................................................................................................3
Background of study....................................................................................................................3
Rational for choosing the topic....................................................................................................3
Aim..............................................................................................................................................3
Objectives....................................................................................................................................4
Research Question.......................................................................................................................4
Literature Review.........................................................................................................................4
Research methods........................................................................................................................5
Gantt chart....................................................................................................................................5
Chapter 1- Introduction....................................................................................................................7
Background of study....................................................................................................................7
Rationale of the study..................................................................................................................7
Research aim and objectives........................................................................................................7
Research Question.......................................................................................................................8
Potential Significance .................................................................................................................8
Research structure........................................................................................................................8
Chapter 2 – Literature Review.......................................................................................................10
Chapter 3- Research Methodology................................................................................................14
Chapter 4- Data Analysis...............................................................................................................16
Chapter 5- Conclusion and Recommendation...............................................................................20
Conclusion.................................................................................................................................20
Recommendations......................................................................................................................20
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References......................................................................................................................................21
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PROPOSAL
Background of study
There are many organizations that deliver their customers with similar services. Main aim
of any firm is to gain maximum profit. However, this is only possible when firm understand the
requirement of customers and provided them services accordingly (West, Murray and Péault,
2014). Banks play vital role in provide proper support to general public so that they will be able
to satisfy their requirements. There are various type of ethical issues that are faced by employees
due to the services that are being provided to customers. In this context, customers prefer to get
services as quick as possible and in order to deliver proper services employees perform all the
steps that customers have to perform. Similarly, there are many other ethical issues that are faced
by employees. In order to reduce the impact of these different type of policies and practices that
are helpful enough to make sure that customers and employees get proper services.
In order to cover the research, Lloyds Bank is take into consideration. This is a
commercial bank and has research across Wales and England. This firm aim at delivering their
customers with high quality services. However, there are certain ethical issues that are faced by
cited firm in which it includes lack of information by employees, time saving by customers, etc.
Rational for choosing the topic
Different type of issues are faced by employees in which to make sure that customers
make use of their services, there are ethical dilemmas. Rational of the research is that there are
many policies and practices that are being followed but due to some of the situations of
conditions, employees face issues related to ethics (Banks, Armstrong and Moore, 2013). In this
context, it becomes difficult to maintain the system that are being followed by bankers. In this
context, it is important to make sure that all the employees with the bank should have proper
information so that they will be able to deliver proper services to customers and without getting
affected by ethical issues. This type of aspect is possible when all the policies are proper
governed by the management and are strictly followed by employees.
Aim
“To investigate the areas where governance and ethical dilemma could arise: A study on Lloyds
Bank”
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Objectives
 To understand issues related to ethical aspects in Banks
 To analyse the policies and practices undertaken to meet ethical needs of banks
 To understand the impact of ethical dilemma on customer's needs and satisfaction
 To recommend strategies and practices to meet corporate and ethical requirements of
banks.
Research Question
 What are the issues related to ethical aspects in Banks?
 What are the policies and practices undertaken to meet ethical needs of banks?
 What is the impact of ethical dilemma on customer's needs and satisfaction?
Literature Review
According to De Rham and Villard, (2014) aim of bank is to make sure that proper
services are being provided to customers. There are many banks that aim at getting customers
who are willing to invest their money. There are different type of ethical issues in which one of
the issues is not providing proper information to customers. There are certain rate of interest that
are provided to customers as per the investment made by them. Customers do not have proper
information and to raise the involvement of customers, bankers do not provide the proper
information about the interest rate that actually will be provided. This is a type of unethical
aspect in which customers make their invest in order to get higher returns and that is not there
(Bagus and Howden, 2013). Another type of ethical issues that, when a customer is willing to get
loan, then it is important for banker to get all the required information from customers. In order
to do so, it is essential to visit their home and clarify all the required information so that loan can
be provided. However, there are unethical practices that is being followed in which bankers may
not visit their home in stud they will get other relevant sources to get information. This is a type
of unethical practices that are being followed. Due to this, the information will not be appropriate
and this is a type of ethical issues that is being faced within the banks. As per Belal, Abdelsalam
and Nizamee, (2015) there are certain main accounting shown on the books of banks in order to
earn profits. There are certain rate of interest that is taken by banks from The London Interbank
Offered Rate (LIBOR). Further, bank will provide certain rate of interest to people but the rate
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shown to customers is high so that more people will invest on it. For this purpose, management
will make sure that changes are made in the accounts that are being maintained by them (Ibrahim
and Yaya, 2016).
Research methods
This is an important part in research in order to make sure that all the information
collected is in an effective manner. There are certain methods and approaches are included in this
and they are as follows:
Research philosophy: There are two different type of philosophies. Among which in the
present research, investigator will make use of interpretevism. This provides suitable justification
for the problem of investigation.
Research approach: These are of two time, in which inductive research approach will be
selected and it will enable to conduct the research from general top specific.
Research design: Descriptive research design will be used as it can be utilized effectively
to response the questions that are includes what, how, where, etc.
Data collection: Secondary source will be used in order to collect information. In this
context, investigator will make use of books, journals, articles, etc.
Data analysis: Qualitative technique will be used in order to present the data and to come
up with an appropriate outcome.
Gantt chart
Key Activities
Week
1
Week
2 & 3
Week
4
Week
5
Week
6
Week
7
Week
8 & 9
Week 10 Week 11
Preparation of
Introduction
Literature Review
Collection of
Secondary
Information
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Examination of the
Collected Data
Research Design
Research
Methodology
Acquiring Primary
Data
Analysing Primary
and Secondary
Data
Conclusion and
Recommendations
Completion of
Leftover Work
Revision and Draft
Final Submission
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CHAPTER 1- INTRODUCTION
Background of study
Finance is the essential aspect of the trade, commerce and industries. In the globalized era
banking sector has become the important par of modern businesses. Ethical values are essential
part of commercial enterprise and one has to follow these ethical code of practices (Lunshof,
Church and Prainsack, 2014). At the time of turmoil or in the crisis situation financial authorities
have to bring re-adjustments and re-regulations waves in their system. Regulators find out the
causes of ethical issues and accordingly they establish new laws and regulations to ethically run
their operations. Authorities make continuous supervision of the potential market in order to
avoid repetition of mistakes.
Present study is based on the case study of Lloyds Bank which is the British commercial
bank. It has many branches in England and Wales (Uy and Naval, 2017). It offers full range of
financial services to depositors and other customers. It is authorized by the prudential regulation
authority and regulated by financial conduct authority. Research will discuss the issues related to
ethical aspects in Banks. It will look upon the policies and practices undertaken to meet ethical
needs of financial institutes (Wilson-Clay and Gribble, 2013). Impact of ethical dilemma on
customer's needs and satisfaction will be described in this study.
Rationale of the study
Banking sector is suffering from the ethical dilemmas, there are many areas where ethical
issues and governance can arise in the financial sector. Present study will provide in depth
knowledge about ethical issues and corporate governance (Choudhury and et.al, 2014). As
banking sector contributes tremendous in the economic development of the country so with the
help of this service standards of banks and its impact on the consumers can be analyses
significantly with this study. This research will contribute well in the literature. Research will
also provide strategies and practices that can support in meeting corporate and ethical
requirements of banks.
Research aim and objectives
Aim:
“To investigate the areas where governance and ethical dilemma could arise: A study on Lloyds
Bank.”
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Objectives:
 To understand issues related to ethical aspects in Banking sector.
 To analyse the policies and practices undertaken to meet ethical needs of Lloyds Bank.
 To understand the impact of ethical dilemma on customer's needs and satisfaction
 To recommend strategies and practices to meet corporate and ethical requirements of
Lloyds Bank.
Research Question
 What are the main issues in the banking sector related to ethical dilemmas?
 What are the policies and practices that can help in meeting ethical needs of banks?
 Does ethical dilemma impact negatively on the customer's needs and satisfaction?
 Which strategies can help to meet the corporate and ethical requirements of financial
institutes?
Potential Significance
It has been noticed that present research is very important for the corporate world and for
the country that can help in understanding the significance of ethical code of practices and
standards in the financial sector. By having proper knowledge about the field regulators can find
out causes and can bring effective regulations in the system that can help in meeting the needs of
customers or depositors. This study can support in guiding the banks so that they can enhance sat
satisfaction level of their depositors and stakeholders.
Research structure Chapter1-Introduction: It is the initial phase of dissertation that gives detail about the
subject matter. Aims and objective of the study are presented to that research can be done
in a systematic manner. Rationale of the study is discussed which is very important for
the entire study. Chapter 2- Literature Review: As objective of the research is to understand issues related
to ethical aspects and impact of ethical dilemma on customer's needs and satisfaction so
in this chapter in depth discussion is done on these topics. Chapter 3 – Research Methodology: It is one of the essential part of whole dissertation
and supports in providing better knowledge about the subject matter. Secondary data
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collection method is used by the scholar that is the great tool that can help in
accomplishing the goal of the study. Chapter 4- data analyses: It is tool which can help in collecting the data from the relevant
sources and analyzing them significantly. Data is analyzed with the help of thematic
analyses in his study.
 Chapter 5- Conclusion and Recommendation: It is the last phase of the dissertation in
which whole study is being summarized here. In addition to this, recommendation is
being provided in relation to strategies and practices to meet corporate and ethical
requirements of Lloyds Bank.
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CHAPTER 2 – LITERATURE REVIEW
Introduction
In the next chapter comes after introduction of the study. It is one of the essential part of
dissertation that helps in accomplishing the objectives of the entire research. In this chapter
researcher has used the secondary data so that aim of the research can be achieved (Choudhury
and et.al, 2014). There are several aspects of arising ethical dilemmas in banking sector such as
establishing guilt, insufficient expertise, cutting corners etc. prudential regulation authority is the
governed body that is responsible for the prudential regulations and supervision of financial
institutes in the United Kingdom. On the same subject many researchers have conducted their
study. Thus, literature review will help in identifying the gap between current study and previous
researches on the topic.
Issues related to ethical aspects in Banking sector
According to Stecker, 2014 global financial system is facing the crises that has forced the
regulators to formulate new regulations and policies that can address the problems and can help
in minimizing the ethical issues in the banking sector (Stecker, 2014). Researcher has discussed
that in the year of 2009 most of the banks were concentrating on the selling of cross sell products
to great extent. There were many financial institutes that have sold more than 10 million PPI
policies (Payment protection insurance) to their personal loan customers. Depositors or
borrowers were expecting to get high return on their investments. But bankers were focusing on
getting the short term benefit in the form of commission. Banks were not paying attention on the
consumers whether the product is suitable for them or not. That is the ethical issue in the banks
and that has forced the Financial Service Authority (FSA) to warn the bankers on this. As per the
view of Shields and et.al, 2015 in the year of 2012 chief executive of Lloyds described that PPI
scandal is completely unacceptable and mis-selling of the products can not be tolerated in the
organization furthermore (Shields and et.al, 2015). It is major problem in the banking industry
and has evidence that sales culture of the banking industry needs to be changed by the regulators
immediately otherwise it can create ethical dilemmas in the industry.
Isidro and Sobral, 2015 has argued that LIBOR (The London Inter bank offered rate) is
the essential part of the banking sector (Sobral, 2015). In this, banks have to concentrate on the
interest rate and have to lend money to the borrower on the actual rate of interest. False report
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preparation and lending money to consumers at higher rate of interest is another ethical issue in
the financial sector. It was noticed that many bankers were preparing false reports in order to
enhance their profit. Manipulating of data is considered as fraud and arise ethical dilemma in the
banking sector.
As per the view of Vos and Boelens, 2014 cutting corners is one of the major ethical
issues in the banking industry (Vos and Boelens, 2014). As many times customers come in the
banks to take loans, they present their document in front of bankers and respect for granting
specific amount of loan. Before sanction the amount, bankers have to investigate the case and
properties of the borrower. In such situation if the employee has no time at that time then they
call their relatives or friends those who live near to the place of borrower and ask their detail
with them rather than self investigating the case. It is called tempting that is completely unethical
and it may cause loss of renewal to the bank. It is ethical issue that may arise in the banking
sector which has forced the regulators to bring some special regulations that can help in reducing
such type of issues.
According to Bagus and Howden, 2013 public condemnation is the major ethical aspect
in the banking sector. Researcher has discussed that poor culture is the main problems in the
modern banking sector (Bagus and Howden, 2013). Most of the banks and senior managers of
financial institutes have corrupt behavior. They do not follow ethical code of conducts in the
workplace. They do not discuss the products with the customers and they take their sign on the
legal form at without giving them complete information. That in unethical behavior. They just do
it just to get high commission on the selling of products. Industry is needed serious cultural
changes in their banks, corporate profit is the secondary aspect bankers have to pay first attention
on corporate social responsibility Regulatory bodies have to make such norms that can help in
minimizing such type of ethical corrupt behavior in the banking sector.
From theoretical perspective, Agency theory can be applied here which states that banks
have to hire the agents for executing their work. In the financial institutes, managers act like a
agent. Higher authorities motivate them so that management staff perform their work
significantly. That can help in increasing trust of the depositors. According to Arcas-Lario,
Martín-Ugedo and Mínguez-Vera, 2014 agency theory states that principal and agents both
needed to be self motivated (Arcas-Lario, Martín-Ugedo and Mínguez-Vera, 2014). If both are
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