Executive Risk Briefing: Financial Ethics and Sustainability Report

This presentation, prepared for an Operational Risk Manager role at Gringotts Financial Services, addresses key operational risk issues. The first part of the presentation analyzes ethical misconduct in the financial services industry, referencing the Royal Commission and using the AMP case as an example of ethical breaches, including fees for services not provided, dishonesty, and prioritizing short-term profits. The second part focuses on corporate sustainability reporting, defining its role in communicating environmental, social, and economic impacts. It highlights key areas like ethics, business conduct, and environmental protection, while acknowledging the challenges of sustainability reporting. The presentation aims to provide a prescriptive approach to ethical decision-making and to encourage the adoption of corporate sustainability reporting.

EXECUTIVE RISK
BRIEFING
Presenter Name
6 September 2019

Corporate Ethics News
• In the past few decades, trend towards ethical misconduct has been increased,
which has created huge challenge for the regulatory body.
• In the business organization, ethical issues are the situation in which the person
or the organization has to choose between the alternative, which is evaluated as
ethical or unethical.
• The issue of ethics occurs when the given scenario or the activity has created the
conflict with the moral principles of the society.
• Sometimes, these conflicts are dangerous legally because some of alternatives for
solving the issues might breaches the particular law. Moreover, there is other
situation, which generates negative reactions from the third parties.
• In this respects, the Royal Commission have created the heightened awareness of
associated risks with the ethical misconduct in the industry of financial services
(Bevan and Yung 2015).

Corporate Ethics News
• The commission was established to reveal in media
regarding greed culture within several financial
institutions of Australia.
• The recent news on AMP, is one of the good examples of
ethical issues.
• The news of AMP brutal conduct sparks all for the probe
has attracted NSW parliament attention that was urged
for the investigations that whether the actions of the
company over the financial advisors have breached the
laws against the unfair contracts (Lin, Li and Bu 2015).

Corporate Ethics News
• AMP is the financial services company in the Australia as well as
New Zealand that provides superannuation and the investments
products, financial advices, banking products and insurance.
• It is one of the biggest name that is used synonymously with the
financial planning in the Australia for decades.
• The company was having serious breaches of the duty towards
clients that includes fees for not providing service, remediating
of the clients, dishonesty to the advisors, keeping clients in the
expensive, failure for reprimanding the dishonest advisers as
well as having inappropriate legacy platforms as well as
products (Australian Financial Review. 2019).

Corporate Ethics News
• The leaders of AMP has consciously chose for prioritizing the
short-term profits of the company at the expenses of the best
interests of the client as well as compliance with laws.
• The shares prices of AMP has lost sixth of its value by wiping
out the amount of $2.1 billion off the market capitalizations
of the firm because of its exposure of serious flaws in their
governance, culture as well as accountability.
• Hence, this misconduct by AMP has let their company down,
shareholders own as well as community down because the
failure of the board for disclosing the issues of governance
(Honig et al. 2014).

Corporate Sustainability Reporting
• The corporate sustainability report is the report that is published by the
company about the environmental, social as well as economical impacts
that are caused by their everyday activities.
• It is the key platform to communicate the performance as well as impacts
of the sustainability, whether it is positive or negative.
• The aim of corporate sustainability is to create the long-term value for the
stakeholders through implementing the strategy of the business, which
focuses on the environmental, social, cultural, ethical as well as economic
dimensions for doing the business.
• The value of the sustainability reporting helps in ensuring that the
organizations considers their impacts on the issues of sustainability and
helps to enable that it is being transparent about opportunities as well as
risks they are facing (Kerr, Rouse and de Villiers 2015).

Corporate Sustainability Reporting
• The main examples of the corporate sustainability reporting includes, ethics and business conduct,
people, society, climate change as well as protection of the environment.
• In the ethics and conduct, company values of the accountability, integrity as well as respect
underpins the way business is done. They are being committed for behaving ethically for being
transparent.
• The global workforce of the company is foundation of business. Providing the people with the safe
and the healthy working environment supports their well being as well as promotes the diverse and
inclusive culture that is vital for maintaining competitive advantages.
• The company commits to make the positive contribution to quality of the life as well as resilience of
the communities, where it has presence.
• The company manages as well as minimizes the greenhouse gas emissions, builds the resilience to
the portfolio of risks of climate change, works of building community, operational as well as
ecosystem resilience to physical impacts of the climate change.
• The company focuses on the mitigation as well as minimizing of the impact on the water,
biodiversity, air quality and land as well as works with the stakeholders on the effective solutions for
complete challenges of environments (Wu et al. 2015).

Corporate Sustainability Reporting
•The sustainability is not seen as only green issues rather the view has
been changed.
•The companies from every sectors are confronted and are adapting to
the ranges of the disruptive forces that includes urbanization,
globalizations, intense competition for the raw material and others, which
are challenging the models of the business while forcing the companies
of being more accountable as well as transparent towards stakeholders.
•Sustainability reporting helps in mitigating the negative impact of the
environment, social as well as governance impacts.
•It helps in improving the reputations and the brand loyalty. Moreover, it
enables the external stakeholders for understanding the true value as
well as tangible and the intangible assets (Pérez López Moreno Romero‐ ‐
and Barkemeyer 2015).

Corporate Sustainability Reporting
• There are several important issues in the corporate sustainability
reporting.
• It is impossible for the business organizations to get success without
having environmental sustainability. It is one on the major challenge
or higher growth economy.
• The improvement in the sustainability demands lot of the
organizational efforts of gathering as well as monitoring the data,
which makes it expensive, challenging as well as time consuming.
• The increase in the reporting of the companies’ results into just tick
on the check list that means the company is not sure regarding how
to report itself. The question arises that whether they should be
check list effort or value creation (Choi and Yu 2014).

References
• Australian Financial Review. 2019. AMP’s 'brutal' conduct sparks call for probe. [online] Available at:
https://www.afr.com/companies/financial-services/amp-s-brutal-conduct-sparks-call-for-probe-20190822-p52jmy [Accessed 1 Sep.
2019].
• Bevan, E.A. and Yung, P., 2015. Implementation of corporate social responsibility in Australian construction SMEs. Engineering,
Construction and Architectural Management, 22(3), pp.295-311.
• Lin, P.T., Li, B. and Bu, D., 2015. The relationship between corporate governance and community engagement: Evidence from the
Australian mining companies. Resources Policy, 43, pp.28-39.
• Honig, B., Lampel, J., Siegel, D. and Drnevich, P., 2014. Ethics in the production and dissemination of management research:
Institutional failure or individual fallibility?. Journal of Management Studies, 51(1), pp.118-142.
• Choi, Y. and Yu, Y., 2014. The influence of perceived corporate sustainability practices on employees and organizational
performance. Sustainability, 6(1), pp.348-364.
• Pérez López, D., Moreno Romero, A. and Barkemeyer, R., 2015. Exploring the relationship between sustainability reporting and‐ ‐
sustainability management practices. Business Strategy and the Environment, 24(8), pp.720-734.
• Wu, L., Subramanian, N., Abdulrahman, M., Liu, C., Lai, K.H. and Pawar, K., 2015. The impact of integrated practices of lean, green,
and social management systems on firm sustainability performance—evidence from Chinese fashion auto-parts
suppliers. Sustainability, 7(4), pp.3838-3858.
• Kerr, J., Rouse, P. and de Villiers, C., 2015. Sustainability reporting integrated into management control systems. Pacific Accounting
Review, 27(2), pp.189-207.
• Link of News Article- https
://www.afr.com/companies/financial-services/amp-s-brutal-conduct-sparks-call-for-probe-20190822-p52jmy