MBA402 Governance, Ethics and Sustainability Assessment 2 Sample KBS
28 Jun 2020
MBA402GOVERNANCE, ETHICS AND SUSTAINABILITY
CODE OF ETHICS FOR WESTPAC BANK
TABLE OF CONTENTS
Code of Conduct 3
Dishonest and Fraudulent Behaviour 7
Whistleblower Protections. 9
Code of Conduct is essential for deciding on the approaches of an organization towards the market or stakeholders. The norms are developing the strategies of the organization to act in the market through following some ethical manner. In this regard, the code of conduct will be developed for Westpac Bank, Australia. The code of conduct in this regard will ensure the act of the employees and it will help to reflect on the daily operations of the bank. In addition, Code of conduct generation will help in the process to decide on the core values of the organization and will ensure the culture of work in Westpac Bank. The following code of conduct will be comprised of dishonest act, corruption, exploitation, discrimination, fraudulent behaviour and protection of whistleblower along with enforcement. Moreover, the rules regulations and principles of Westpac Code of Conduct will be highlighted.
Code of Conduct
The mission, principles and values of an organisation is well-depicted in a properly drafted company code of conduct, which is used for aligning the standards of professionalism to be maintained (Köhler, 2016). A well-drafted code of conduct initiates communication of values, which is ushering to foster within the entire organisation. In a company’s code of conduct, the corporate standards are enumerated, which helps in making the company reputed within its operational zone. Basically, in a conduct code, the rules, regulations, ethical aspects, and guidance that are to be followed by the employees are drafted. Considering the code of conduct of Westpac Bank, a framework for ethical operation and decision-making is scripted in the code of conduct.
Based on the case filed against the Westpac bank for failing to comply with the money-laundering laws for more than 23 million times between 2013-2019 (because of failure to report AUD$11 billion, the CEO of the bank had to resign along with paying out AUD$ 2.7 million from salary (Maiden, 2019). Chairman Lindsay Maxsted decided early retirement and director Ewen Couch deferred from re-election in the board (Fargher, 2019). The bank even shut down “LitePay” the low cost money transfer process immediately to prevent further mishaps in the future. Based on the allegations, the bank panicked in taking some decisions; however, in lieu of maintaining a balance between company codes and its working culture, the bank even took drastic steps in removing the top management position holders of the bank to maintain its image (Grieve, 2019).
The employees have already been cautioned by the management in respect to non-repetition of unethical activities and even the bank has decided to keep the employee bonuses on hold. Moreover, the company decided to hire external hires along with increase the number of staffs to detect and investigate about crimes and money laundering (Maiden, 2019).
Unfair treatment of an individual based on different prejudices is termed as discrimination and some of the most common discriminatory behaviours are age, gender, religion, race, disability, reassignment, pregnancy, gender-based orientation, marriage and other social norms (Vickers, 2016). Direct discrimination is referred when an individual is unfairly assumed about certain characteristics. Some of the most common examples are non-recruitment of aged people or women based on the assumptions that age or gender of an individual makes an individual unfit for certain position. Indirect discriminations are commonly expressed through policy, practices and way of behaving with certain individuals. However, an organisational policy aims to treat all employees equally. In actual basis, it is found to be disadvantageous for a particular individual whose personal attributes are legally safeguarded (Jones et al, 2017). Stretching working shifts might be disadvantageous for employees having families.
The following codes of conduct are to be initiated by Westpac bank in respect to discrimination:
No employees should be discriminated because of age, religion, ethnicity, disability, marital status or any other factors that might be discriminating
There should be a sense of respect among the employees
Equal employment opportunities in respect of avoiding discrimination
The company should closely monitor discriminating activities and should deal wisely in case of any complaint raised
If any employee is discriminated the other employees should extent support and ensure reporting the incident and employees should be non-tolerant towards discriminatory activities
Exploitation is referred to certain actions conducted by an individual or any group of individuals that are intended towards treating the colleagues or other individuals in an unfair manner for gaining self benefits at the workplace (Richard, 2019). A company’s basic code of conduct is expected to identify and rule out the actions or behaviours like long working hours, forced working in unhygienic environment, or gender-based exploitation. These issues must be addressed for effectively establishment of fair working environment and culture. Westpac Banks’ code of conduct for identifying and mitigating exploitation should possess the following norms:
The bank should take serious disciplinary actions on the employees in case of forcibly participating employees to work for elongated hours
The employees should have a proper platform to report any cases of exploitation at workplace by the reporting authorities
If found to be exploited, the management must take disciplinary action along with providing certain benefits to the employees being exploited
The management should be focussed towards creating a healthy working environment through developing an inclusive workplace
Employee health and well-being should be taken care of by the management
Employees are to be provided with the authority of informing exploitation to the top management
Early leaves, half days and other leave benefits are to be provided to the employees and top managers should ensure that employees are able to avail the stipulated holidays
Westpac Bank should be compliant towards the national and local working laws and implement an effective working environment. In case of any health issues caused at workplace, the bank should bear the medical costs
Banks are entitled towards dealing with public fund, therefore extra caution should be provided to prevent corruption. Corruption is termed as the dishonesty caused by an individual in order to gain illegitimate benefits (Reddy, 2019). Corruption has significant negative impact on the brand value of an organisation and eventually leads towards growing dissatisfaction and trust among the customers. Corruption leads towards creating financial and brand de-growth (Richard, 2019). Thus, in order to prevent corruption within the bank, Westpac needs to implement the following rules for maintaining reputation within the banking industry:
The bank should undertake monitoring activities to ensure that anti-corruption law is enforced
Strict disciplinary actions to be taken against the employees found t be involved in corruption
Anti-bribery assessments through conducting internal and third-party audits is necessary to raise awareness and detecting the ongoing corruption
Corruption evaluation strategies are to be changed or tested periodically to test its effectiveness in corruption detection
Best anti-corruption practices are to be implemented within the organisation
Employee (s) once found guilty of being involved in corruption or bribery should be immediately terminated
Gift-policy should be strict to prevent external influence on decision-making process within the bank
All employees must be answerable to the management in case of any dealing with third-parties
Dishonest and Fraudulent Behaviour
Pervasiveness is reflected when an organisation gets involved into dishonesty and in corporate context, dishonesty refers to the actions like theft, intentional misleading of information, embezzlement, or unethical behaviour display in organisations (Soehari and Budiningsih, 2017). Organisations have the tendency to be involved in perpetuating dishonesty, which might include unauthorised loan sanctioning, non-complaint to banking laws, cash embezzlement. For Westpac Bank, dishonesty has been linked because of intentional breaching of anti-money laundering laws, thus in order to prevent repetition of such actions, strong internal control and external audit process should be introduced (Grieve, 2019). Moreover, the bank can implement the following code of conduct in order to prevent dishonesty and fraudulent behaviour of employees:
Effective risk assessment and monitoring process should be initiated for identifying the possibilities of any dishonesty or fraudulent activities
Effective initiation of control measures to identify any fraud possibilities and instantly acting on it
Proper education and training should be provided to the employees to remain aware and refrain from dishonesty and employees should bring the management under notice in case of any such activities within the organisation
The assets and data of the bank must be secured along with limiting the access to certain employees only
Appropriate policies are to be framed for the purpose of management and retention of important documents
Appropriate auditing process should be initiated within the organisation through arranging periodic internal audits
Third-party auditing process should be implemented to evaluate the effectiveness of internal audit and control system against detection and prevention of fraudulent activities
In case any employee is found to be guilty of being involved in fraudulent activities, proper actions are to be initiated including financial penalisation or termination if required
The internal control process should be consisting of sudden verification subject to the banks’ decision
A whistle-blower is used to protect and safeguard resources of an organization from the illegal third party involvement. Based on Allen and Mair (2019), it has been determined that whistle-blower is considered as a group in the company that is involved to take legal action by the application of knowledge. Westpac Bank in this consequence to provide whistle-blower to take away employees from any kind of unwanted situation that causes illegal issues in the future. In the case of correct information processing, this facility is very much effective for Westpac Bank. Under Whistleblower Protections, Westpac Bank has to follow some principles to protect their information. The principles are given below,
Employees of the Westpac Bank are not allowed to send information from their Email id. Furthermore, complaints regarding information have to send to the Ombudsperson
Employees having involved aggrieved action is persecuted by the management authority as under Whistleblower Protections this kind of activity is considered as unethical
Bank cannot suggest or impose any undesirable penal action against the workers that are concerning the disclosure in good faith
Employees in the bank are allowed to disclose information through verbal discussion writing. Another mode of information sharing will considerable
Under enforcement, employees of the company are allowed to obey the policies and rules of the organization (Kleymenova and Tomy, 2019). Inappropriate behavior of the employee in the company is controlled and measured by law enforcement. In the case of Westpac Bank initiation has been taken in terms of enforcement where terminations take place if the employees misguide others or not follow organizational policies. Employees of the bank have to be accustomed to the code of conduct (Kleymenova and Tomy, 2019). Under the enforcement, the bank has undertakes some initiatives such as organizational policies, salary, non-payment policies, and suspension of the employees regarding any unethical practice. Some code of conducts of Westpac Bank is given below,
Suspension and termination will take place if the employees of Westpac Bank is not following code of conduct
In the case of revealing financial information and other information, legal action will take against the employees
Penalties will be imposed if an employee is unable to uphold the organizational code of conducts
In case of not meeting the target, deduction from the salary would take place.
Bank would ensure about all requirement of the employees
Thus, it is evident that corruption is considered as dishonest conduct from the end of people so that illicit benefits can be generated for the people. Lack of trust among employees and improper policy implementation from the end of top management can ensure generation of corruption in the organizational context. Criticism is an evident phenomenon from the end of market and people if an organization breaches the ethical behaviour. Westpac Bank has the possibility to generate a strong image in the banking industry with the Code of Conduct. Good relationship with the consumers and people associated with the organization can be generated with the help of ethical behaviours.
Allen, C.R. and Mair, D.N., 2019. Disclosure of Noncompliance with Laws and Regulations: What Whistleblower Protections Exist for CPAs?. The CPA Journal, 89(3), pp.30-35.