Corporate Governance and CSR Analysis: Westpac Banking Corporation

This presentation analyzes the corporate governance and corporate social responsibility (CSR) of Westpac Banking Corporation. It begins with an overview of the bank's current board structure, including the number of executives and the two-tier system, highlighting changes in board composition, such as retirements and new appointments. The presentation then discusses the consequences of these changes, including financial performance indicators like revenue, earnings, and cost-to-income ratio. It also delves into the insights gained from the director and executive committee's cooperation with the advisory board. The presentation further examines scandals faced by the organization, including issues with credit card limits and the bank bill swap rate, and their impact on stakeholders. The analysis includes the application of selected ASX guidelines, such as those related to laying solid foundations for management, acting ethically, respecting security holder rights, and managing risk. Finally, the presentation explores Carroll's philanthropic model, detailing Westpac's CSR activities, including the Westpac Bicentennial Foundation and other charitable programs.

CHANGES IN CORPORATE
GOVERNANCE AND CORPORATE
SOCIAL RESPONSIBILITY
WESTPAC BANKING CORPORATION

2
Current board structure and model
Overview
Number of MDs and
CEOs for different
segments
Diverse and
experienced Board
with Two-tier
structure

3
Current board structure and model
Overview
Millet-Reyes and Zhao (2010) also
pointed out that the Two-Tier
system has enabled the company
to encourage all stakeholders to
speak up when the thing goes
wrong.
None of the non-executive
officers are present on the
advisory panel; rather, the
executive members and the team
are given the accountability to
identify the loopholes through
direct communication with the
stakeholders.

4
Current board structure and model
Changes
Board structure has been
changed. After 10 years of
successful performance,
Elizabeth Bryan retired in
the Annual General
Meeting 2016.
In the FY 2017, new CEO
Nerida Caesar was
appointed to the Board. In
addition, Robert Elstone
also retired from the
Board in the FY 2017.

5
Current board structure and model
Consequences
Such changes have resulted
higher revenue and income.
Cash earnings have risen
by 2%
Cost to income ratio
became 42.2% in FY 2017
Earnings per share
increased by 2%
Liquidity and funding
position got improved
Overall loan grew by 3%

6
Current board structure and model
Insights
The Director and Executive
committee closely cooperate
with the advisory board and
chairman to develop the
business strategy and potential
planning to meet future goals.
Boo and Sharma (2008) are of
the opinion that a steady flow
of information between these
entities identifies the actual
gap between the risk
management and business
growth areas against the initial
set plans.

7
Current board structure and model
Insights
The company maintains
an environment for open
discussions and mutual
coordination.
Such environment may
enable the company to
make a steady flow of
information, which
drives the potential
growth (Kofman and
Murawski, 2015).

8
Scandals faced by the organisation
Despite ASIC’s repeated objection to the
extent of inquiry done before increasing the
credit card limit of some of the customer,
Westpac continued with the practice.
Westpac has issued more than 10,000 home
loans using automated Household
Expenditure Measure system, without an
actual evaluation of the customer’s declared
expenses.

9
Scandals faced by the organisation
The firm was alleged to sell products that
were priced in a manner to manipulate the
bank bill swap rate (BBSW) which is a
benchmark of interest rates in Australian
financial markets (Asic.gov.au, 2018).
The firm has disturbed the balance of finance
in all the occasions producing higher
revenues for themselves and causing more
harm to the customers and society (Lurdes
Neves, 2014).

10
Scandals faced by the organisation
Westpac has violated the Consequential
Utilitarian approach.
The stakes of different stakeholders had been
adversely affected.
Westpac has established a Stakeholder
Advisory Council to suggest guidance and
intuitions to its executives and the
sustainable leaders to enhance its functioning
opportunities in the operating marketplace.

11
Stakeholder Relationship

12
Selected ASX guidelines
Principle 1: Lay solid foundations for
management and oversight
Theory:
 The organization must establish a firm
structure of the board of directors,
executive officers, the departments and
supervisory committee.
 Such structure will provide a strong
foundation for management and
oversight.