The code of conduct and ethics play a very important role in an organization and directly affect the performance of the economy as a whole. The issue becomes grave wherein bigger companies are involved which can single handedly make situation worse and make the economy come to a standstill as in the case of Commonwealth Bank. The money laundering scandals at Commonwealth Bank has brought Australia’s booming financial sector to a standstill and fate looms over them. It is found that due to malafide intentions of top executives of the bank and their selfish interests, there were big ticket sized remittances made to other parts of the world forming part of bogus transactions (Rezaee, 2019). While the top executives were involved, the bank’s processes were breached and transactions for certain client groups were done with half eye closed and also did not justified the bank’s internal screening processes. The issue came to notice only after an act of blackmailing got highlighted from certain groups in Africa region and thus the scandal was busted with such top executives being under scrutiny and arrested (Singh, 2020).
The code of conduct and ethics are the defining set of rules and principles that make san organization unique and stand apart from each other (Waweru, 2020). In today’s modern day businesses, it is equally important to carry on a correct and legal business as the awareness levels are high among consumers and laws being very strict. Thus it is in the interest of a business to have robust system of code of conduct and work ethics which needs to be mandatorily followed by all the staff and vendors, contractors and top executives as well.
Being in banking sector, the code of conduct and ethical principles of the Commonwealth Bank should be clear and unambiguous as it deals in financial segment wherein an act of negligence could prove too costly to rectify (Moriarty, 2019). Broadly speaking the ethical code for the bank should be based on the fact that it should follow the prevailing laws and regulations of the country and also keep applicable guidelines of international organizations and governing bodies in mind. Further, it should be a strict mandate to work within the boundaries of ethical code framework of the bank so that there is no scope for negligence or misconduct by any of the staff (Munteanu, 2020).
One of the other major ethical code is stopping discrimination at work place. Evil practices like appreciating someone close to you, discriminating others on basis of their caste, colour, creed, ethnicity and sex were a thing of past but still in modern days we find some managers doing such discriminations and thus make workplace and atmosphere suffocating for the discriminate lot. The world around there are strict laws which classify such discrimantion as an offecne and thus it is in the interest of the companies to be very stringent on such parameter as the company would run into legal troubles and lose time and money besides risking its reputation and disturbing team work. Henc eit is important to pay attention to such ethical code (Islam, 2019).
the private jobs are stressful and it is found many a times that the staff close to the manager gets promotion early despite other deserving candidates are left behind. Such a practice brings negativity in the team and team spirit gets diminished and the favoured staff gtes bigger and bigger in role and staure while the deserving employees ultimately ahd to leave the organization thus creating a void in work performance (Nalukenge, 2019).
For the Commonwealth bank, there should be very strict guidelines for managers practicing discrimination and an internal enquiry be setup for detecting any complaints and take actions and give feedback. It is required to have an open and free culture at the bank so that the staff could work freely and perform better.
The exploitation of employee at workplace is a very grave act and is committed in many offices especially in the private setup. Due to holding powerful positions, a manager often gets involved in employee exploitation or does something which would make an employee feel exploited and could be seen and felt. The exploitation could be basis manipulating staff, playing with their emotions, making undue advantage of their situation and need for a job (Nalukenge, 2020). A women faces a lot of discrimination as she is exploited for sexual favors at workplace in order to have an easy ride and promotion. Similarly there could be situation wherein an employee is made to work harder and harder while majority others live a relaxed life. Such an act is a deliberate step by the manger wherein he troubles an employee so much that he/she is forced to resign or shift teams.
A bad manager can exploit the team in many ways and due to the fact that he is the face of the team to top management or the higher ups, he could exploit a staff and vent out his frustration or dislike towards him and still has his way as the staff would not be heard in the system and would ultimately leave the organization (ElGammal, 2018).
For a banking company, exploitation could lead to serious issues as it is quite possible that an aggrieved staff is confronting the manager over his unjustified decisions which are not in line with bank’s polices and ethics but is forced to harassment and exploitation by the manager as a measure of punishment for not obeying the manager thus the bank should have a zero tolerance policy towards employee exploitation and proper incidence management reporting systems.
Corruption is an illegal activity that is driven by certain motives such as selfish reasons to make more money in a short span of time or gain power leaving other deserving candidates behind by luring the concerned signatory or official and making him part of the crime as well. It is to be noted that everyone involved in causing an act of corruption is an accused, punishable under the provisions of the law (Adhariani, 2017). Thus it is important to have strict policies and monitoring mechanisms to understand the potential areas where corruption could be practiced by employees and strengthen the same. In a banking system, corruption is rampant in the sense that certain top level employees have the power to wreak havoc by their corrupt intentions and only one transaction can change the fate of the bank. History is full of such examples wherein a CEO had favored companies of their relatives and granted loans using their special discretionary powers and later they had become non-performing assets. A corrupt practice at a bank like Commonwealth has depleted it of its capital and lost investors’ money and had dent on its reputation and creditability. Corruption could be in the form of monetary benefits or non-monetary benefits and have vested selfish motives for prosperity through corrupt means. Everywhere in the world governments and companies have rated corruption as an evil and has put rules and regulations, internal policies to pronounce corruption as an offence under law (Boatright, 2017).
There are multiple cases of corrupt practices in a bank and one very common example is processing of a transaction involving remittances against services wherein proper due diligence is not done and remittance is made. Though maybe of small value, a series of such investments could eventually lead to a big amount of money being remitted to facilitate a client and get some money in return.
Banking and financial sector is too prone to face corrupt practices and thus it is all the more important for them to be good at policy making and implementation and supervision of transactions so that they could detect early signals of corrupt practices. Thus code of conduct for corruption should be rigid and made to understood by each and every staff despite of their position. It should also be clearly spelt that any corrupt staff would be liable to be charged as per appropriate offence under law of land and be punished as per provisions of criminal act. It is to be noted that proper whistle blower policy should be made so that an employee who observes something dubious could approach to team who can secretly supervise the individuals suspects in corrupt means.
Although similar to corruption, a fraud is an act of dishonesty and could be because of reasons other than personal gains as well. In the banking sector, data privacy is of utmost importance and sharing of information or insider trading is a crime. Still we see many people getting involved in insider trading tip offs to their relatives, friends just to gain some attention within their circle (Adhariani, 2018). An act of fraud is also very damaging to a company and is an offence punishable under provisions of law. In the case of Commonwealth Bank, any sort of tip off or sharing of internal information about a big deal could make the bank in trouble an losses thus it important for the bank to lay down proper policies and code of conduct measures so that the staff is well aware of the bank’s stand on such acts and the possible punishments the staff could have to face (Boatright, 2017).
An employee involved in data leakage and insider trading is a big threat to the organization and can potentially lead to loss of fortune to the bank. Certain big deals have limited staff involved in it and the information is with very few individuals and thus it is important for them to act within the polices of the bank (Adhariani, 2018).
Commonwealth bank needs to have robust systems and policies in place wherein the staff does not gets involved in any fraudulent activities at first place and are really concerned if any one tries to do the same as it would be a risk to the bank and all the employees in general as the bank stands to lose money, the growth of all staff would be at stake (Adhariani, 2018). Thus each and every employee should be at vigil and make every effort to stop or report an activity of fraud or probable suspicion at an early stage.
Code of conduct and ethics at workplace are of paramount importance. These are the set of values that each and every employee needs to abide to and prove their commitment to the organizational principles form time to time. As they serve best interest of the organization if customized according to the business and risks management wish to take, on a general note, they are made to ensure that the employees follow certain rules and regulations and exhibit a behavior which could be within the boundaries of extant rules and laws of the state and also need to consider applicable international organization and jurisdictions. In the case of Commonwealth Bank, it is important to have very strict and stringent crystal clear code of conduct and ethics policy as it is a bank and chances of fraud and corruption are highest in its line of business. The bank should make it amply clear that an accused would not be treated with respect and kindness, rather he /she would be liable to be dealt with the provisions of law and could face imprisonment as well. These parameters are required to ensure that staff not even in their dreams can think of committing a fraud or any other act of violation of code of conduct and work ethics as prescribed to them by the bank. Despite all these measures, there could be abuse of power by which certain section of people conspires against the bank and thus there should be appropriate whistleblower policy and channels to whom an employee could voice out their concern without letting their identity out and such department work secretly and supervises such staff and employees and does a root cause analysis and submit their findings for necessary action by the management. Thus code of conduct and ethical polices are the framework which can help an organization survive and sustain and ensure they are free from selfish minded staff which might cause trouble to their operation in due course of time.
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Boatright, J. R. (2017). Ethics and corporate governance: Justifying the role of shareholder. The Blackwell guide to business ethics, 38-60.
ElGammal, W., El-Kassar, A. N., & Messarra, L. C. (2018). Corporate ethics, governance and social responsibility in MENA countries. Management Decision.
Furlotti, K., & Mazza, T. (2020). Code of ethics and workers' communication policies: The role of corporate governance. Corporate Social Responsibility and Environmental Management.
Islam, K. A., & Barghouthi, O. A. (2017). Corporate Governance: An Islamic Institution Perspective. International Journal of Islamic Banking and Finance Research, 1(1), 29-32.
Moriarty, J. (2019). Business ethics. Oxford University Press.
Munteanu, I., Grigorescu, A., Condrea, E., & Pelinescu, E. (2020). Convergent Insights for Sustainable Development and Ethical Cohesion: An Empirical Study on Corporate Governance in Romanian Public Entities. Sustainability, 12(7), 2990.
Nalukenge, I., Nkundabanyanga, S. K., & Ntayi, J. M. (2018). Corporate governance, ethics, internal controls and compliance with IFRS. Journal of Financial Reporting and Accounting.
Rashid, A. (2018). The influence of corporate governance practices on corporate social responsibility reporting. Social Responsibility Journal.
Rezaee, Z. (2019). Business Sustainability, Corporate Governance, and Organizational Ethics. John Wiley & Sons.
Singh, S. K., & Gaur, S. S. (2020). Corporate growth, sustainability and business ethics in twenty-first century. Journal of Management and Governance, 1.
Waweru, N. (2020). Business ethics disclosure and corporate governance in Sub-Saharan Africa (SSA). International Journal of Accounting & Information Management.
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