Article Review: NAB's Corporate Governance and Leadership Issues

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This report provides an in-depth review of an article concerning the corporate governance challenges faced by the National Australia Bank (NAB) following the financial crisis. The article highlights issues related to culture, leadership, and the importance of rebuilding the bank's reputation after significant financial fallouts. The review discusses the impact of the CEO's resignation in 2019, the role of the media, and the significance of corporate governance in maintaining customer trust and organizational stability. It emphasizes the need for transparency, accountability, and a strong corporate culture to overcome challenges and improve operational performance. The report further analyzes the importance of leadership and the steps taken to restore the bank's image, including the appointment of a new CEO, and concludes by highlighting the long-term implications of corporate governance issues on NAB's operations and customer relations. The report uses various references to support the discussion.
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Running head: ARTICLE REVIEW
ARTICLE REVIEW
Name of the Student
Name of the University
Author Note
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1ARTICLE REVIEW
Outline and summary of arguments in the article
The article is based on the National Australia Bank or NAB that has been facing
corporate governance issues and has been trying to implement damage control based methods.
The financial fallouts that have taken place in the industry and their impact on the bank have also
been discussed by the authors in the article. The issues that have been discussed in the article are
also related to the challenges based on trust, reputation and culture. The resignation that had been
placed by the CEO of the bank in the year 2019 and the reasons behind this decision are also an
important part of the discussion that is made in the article (Ryan 2019).
The global financial crisis that had taken place in the country is a major part of the
arguments that are made in the article. The arguments are also based on the steps that are taken
by NAB in order to restore the culture and reputation of the organization. Leadership and culture
based issues are a major aspect related to the development of arguments in the article. The bank
had also tried to rebuild its reputation by bringing back the CEO Mr. McEwans who had
resigned due to the issues that had taken place in its operations due to the financial crisis
(Aguilera, Judge and Terjesen 2018). The global search that had been made for the post of CEO
had resulted in the appointment of Anthony Healy who was business head of National Australia
Bank. The appointment of Mr. McEwans as the CEO of NAB had been able to start a new era in
the operations of the organization. The most significant argument that has been provided with
highest importance in the article is mainly based on the development of the reputation of a bank
after the issues that have taken place in the operations (Akbar et al. 2016).
Importance of the discussions to be made based on the article
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2ARTICLE REVIEW
The challenges and issues that have taken place in the operations of an organization like
National Australia Bank are mainly based on the culture and the proper development of
corporate governance as well. It is considered to be highly important for the media to report
about these issues for the purpose of understanding the ways by which the organizations can
maintain their position in various industries. The arguments are also considered to be necessary
in order to develop the various corporate governance based activities for the purpose of
developing a reputation of the organizations (Ryan 2019).
The issues related to corporate governance that are faced by the organizations have a
major impact on the customer base that has been developed as well. The image and reputation of
the organization are able to play a major role in the position that is developed in the minds of the
consumers. The damage that is caused to the reputation of the organization has an impact on the
operations and profitability levels that are gained as well (Hussain, Rigoni and Orij 2018). The
medium term or long term based impact that is caused on the reputation of various organization
needs to be reduced with the steps that are taken by the organizations in order to improve the
operations. The media is able to play a major role in the proper re-development of reputation and
image of the organizations that are developed in various industries. The type of image that is
developed by the organizations is dependent totally on the reports that are provided by the media
(Aguilera, Judge and Terjesen 2018).
Discussion based on corporate governance issues and the importance
Corporate governance can be defined as the combination of the processes, rules or the
laws that help in the operations of various business organizations. The proper operations,
regulation and control of business are also possible with the proper development of corporate
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3ARTICLE REVIEW
governance. The term also encompasses various internal as well as external factors that have an
impact on interests of the stakeholders of the company that include customers, shareholders,
government regulators, management and suppliers (Armstrong et al. 2015).
Corporate governance is considered to be important factor that is able to increase the
accountability levels of the organization. The company can avoid major disasters with the help of
proper implementation of corporate governance. The ownership structure of the organization is
considered to be an important aspect that is affected in a huge manner by corporate governance
(Larcker and Tayan 2015). The employees are able to understand the importance of social
responsibility with the help of various corporate governance related activities that are performed
by the organizations. The scams, frauds and corrupt practices that take place in the various
organizations in modern business environment can be faced with the help of proper corporate
governance (Hussain, Rigoni and Orij 2018).
The issues that have been faced by National Australia Bank were also based on the
corporate governance activities that are performed by the organization. The major corporate
governance issue that was faced by National Australia Bank is related to the lack of transparency
in the organization. The culture that had been formed within the bank is considered to be a major
factor that is able to influence the image of the organization. Lack of trust and reputation within
the National Australia Bank and the employees is an important issue that can be considered in
order to understand the corporate governance activities (Lins, Servaes and Tamayo 2017).
The leadership and culture in National Australia had been condemned and this had also
been able to hurt the reputation of the organization. Another major corporate governance issue
that can be identified in the article is mainly based on the lack of accountability of the employees
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4ARTICLE REVIEW
of the organization. The transformation of the culture and operations of National Australia Bank
had not been supported in a huge manner by the employees of the organization. The challenges
related to re-development of the culture are considered to be an important aspect of the corporate
governance activities of the organization (Malik and Makhdoom 2016).
The Government had ownership of National Australia Bank and the improvement of the
culture and leadership of the organization is an important part of the proper implementation of
corporate governance. The accountability of the employees of National Australia Bank is
considered to be a major factor that has an impact on the reputation of the organization. The
employees were not able to maintain their accountability levels in order to maintain the trust of
the customers on the organization (Rasheed and Nisar 2018).
Concluding by providing the opinions based on corporate governance issues
The corporate governance issues that have been raised in the article with respect to the
operations of National Australia Bank after the financial crisis had taken place in the country.
The challenges that were faced by the organization were mainly based on the lack of proper
culture and leadership. The employees and management of the organization had faced major
levels of issues based on the ways by which corporate governance can be implemented in
National Australia Bank. The operations of National Australia Bank are also dependent on the
support that is provided by the employees and their collaboration with the management of the
organization as well (Siddiqui 2015).
The transformation of culture and operations of National Australia Bank would have been
possible only with the position that is maintained by Ross McEwan in the organization. The lack
of accountability in the organization is also considered to be a major aspect that is able to affect
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5ARTICLE REVIEW
the operations of National Australia Bank. Corporate governance and the lack of its proper
implementation have a major impact on the levels of operations that are developed by NAB. The
pay that was provided to the CEO of National Australia Bank had been able to play a major role
in the development of the operations of the bank (Tricker and Tricker 2015).
The time that is required to repair the damage that had been caused to the reputation of
the organization is also quite huge. The critical era that had been faced by National Australia
Bank can be managed with the support that is provided by the management of the organization.
The Bank had also tried to improve the trust that the customers have on the operations and the
services that are provided to them as well. The trust of the customers is considered to be an
important factor that has an impact on the reputation that is built by an organization in the
industry (Wang et al. 2015). National Australia Bank has also tried to develop the trust of
customers in its services in order to maintain the operations for a long term. The appointment of
an external leader is also a right step that had been taken by the organization in order to gain a
fresh look. The improvement of the culture of NAB is also possible with the new look that is
provided by the leader.
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6ARTICLE REVIEW
References
Aguilera, R.V., Judge, W.Q. and Terjesen, S.A., 2018. Corporate governance deviance. Academy
of Management Review, 43(1), pp.87-109.
Akbar, S., Poletti-Hughes, J., El-Faitouri, R. and Shah, S.Z.A., 2016. More on the relationship
between corporate governance and firm performance in the UK: Evidence from the application
of generalized method of moments estimation. Research in International Business and Finance,
38, pp.417-429.
Armstrong, C.S., Blouin, J.L., Jagolinzer, A.D. and Larcker, D.F., 2015. Corporate governance,
incentives, and tax avoidance. Journal of Accounting and Economics, 60(1), pp.1-17.
Hussain, N., Rigoni, U. and Orij, R.P., 2018. Corporate governance and sustainability
performance: Analysis of triple bottom line performance. Journal of Business Ethics, 149(2),
pp.411-432.
Larcker, D. and Tayan, B., 2015. Corporate governance matters: A closer look at organizational
choices and their consequences. Pearson education.
Lins, K.V., Servaes, H. and Tamayo, A., 2017. Social capital, trust, and firm performance: The
value of corporate social responsibility during the financial crisis. The Journal of Finance, 72(4),
pp.1785-1824.
Malik, M.S. and Makhdoom, D.D., 2016. Does corporate governance beget firm performance in
fortune global 500 companies?. Corporate Governance, 16(4), pp.747-764.
Rasheed, A. and Nisar, Z., 2018. A Review of Corporate Governance and Firm Performance.
Journal of Research in Administrative Sciences (ISSN: 2664-2433), 7(2), pp.14-24.
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Ryan, P. 2019. NAB appoints RBS boss Ross McEwan as CEO after five-month search. [online]
ABC News. Available at: https://www.abc.net.au/news/2019-07-19/nab-appoints-ross-mcewan-
as-ceo/11324616 [Accessed 26 Aug. 2019].
Siddiqui, S.S., 2015. The association between corporate governance and firm performance–a
meta-analysis. International Journal of Accounting and Information Management, 23(3), pp.218-
237.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices.
Oxford University Press, USA.
Wang, D.H.M., Chen, P.H., Yu, T.H.K. and Hsiao, C.Y., 2015. The effects of corporate social
responsibility on brand equity and firm performance. Journal of business research, 68(11),
pp.2232-2236.
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