This assessment sustains a key refrain of the effective professional code of conduct, policies and regulations that must be enforced within Westpac bank by considering the governance and ethical issues. Code of ethics is a guide of principles which are framed to assist business integrity, honesty and professional conduct. A code of ethics is also known as ethical code which incorporates diverse areas such as code of professional conduct, business ethics and employee code of conduct (Kelchner 2017). It is adopted by organisations in order to ensure that the members comprehend the difference between wrong and right by the application of understanding to their decisions.
It is basically a set of formulated statements for giving a better understanding of the organisation to employees in terms of employees' practices and ethical principles governing decisions and behaviour within the workplace. A code of conduct for Westpack bank is basically intended to ensure that the consistent and clear values are embedded within the organisational culture and the code of conduct is a depiction of a natural extension of its values. The following assessment lays emphasis on the issues in the corporate governance at Westpac Bank. It provides a snapshot of the code of ethics of the bank. The code of ethics specifically addresses discrimination, exploitation, corruption, whistleblower protection, fraudulent behaviour and dishonesty and enforcement.
Discrimination among the employees on the grounds of race, gender, sexuality, ethnic background or culture is prohibited in a workplace. It impacts employees’ performance as well as organisational productivity. In the year 2016, an Adelaide-based financial planner sued the bank for about $1 million after being informed by the regional manager that some clients would not want to work with an Indian banker. As per the reports released by the Australian Financial Review, the case was filed by Vikram Chopra against the regional manager Kristen Greber and the bank in the Federal Circuit Court (Adelaide Now 2019).
Chopra also raised his voice by stating that the bank that detracted on the decisions for promoting him because of his race and cultural background. He stated that after he moved to a new job role in the year 2014, replacing banker who was also from Indian descent, he was confirmed by his manager that the clients do not want to meet another Indian planner. He charged the company for paying his loss of earnings and around $40,000 for suffering, legal costs, interests and emotional pain (Adelaide Now 2019).
As a result of the multimillion-dollar lawsuit, the Federal Court proceedings between regional manager and Chopra settled with the consent of both parties. As a result of which, Greber was issued with a formal warning and was also asked to apologize. After this case, the organisation dealt with the scenario in an effective manner and ensured that the compliance with the regulatory requirements, applications and the voluntary codes of practices was confirmed. The organisation also stated that if someone fails to comply with the regulations of Westpac Group will safeguard that the employees face criminal sanctions and other serious consequences. However, there is a need for the firm to strengthen and promote diversity workplace policy and must acknowledge the importance of respecting and valuing the cultural differences and the need to diminish unlawful discrimination, harassment and bullying so that a competitive edge is sustained (McIlroy 2019).
Westpac needs to strictly adhere to the Disability discrimination act 1992, Sex Discrimination Act 1984, Age Discrimination Act 2004, Racial Discrimination Act 1975 And Australian Human Rights Commission Act 1986 so that the rights and respect of the employees are valued for making the workplace a better place to work. Considering the Chopra's case, Westpac bank's code of conduct must include issuing warnings against someone who treats another individual less favourably because of a certain protected attribute.
The LitePay, which is the consumer product allowing people to send small amounts of money to each other was taken into account by Australian Transaction Reports and Analysis Centre as the bank did not carry out proper due diligence of customers with repeated small payments to Southeast Asia (McIlroy 2019). Its one customer was also involved in transferring money to the Philippines and was arrested for child trafficking and exploitation. This brought the bank into the limelight for some serious allegations in the context of exploitation. As a result of this, the chief executive officer resigned and confirmed to pay about A$2.7 million to the business (McIlroy 2019).
As a result of the enquiry held, several charges were held against the bank such as for forging the loan documents, pushing the customers into unstable investments for completing the targets of the bonuses and charging for services that were not provided on time to the customers. The royal commission also stated that the regulators of the business were infective and there was no enforcement so that any sort of wrongdoings were not fuelled. Anti-slavery, immigration and human rights framework must be used by the firm to make sure that such exploitation-related activities are strictly administered.
The bank was also accused of exploitation when the Australian Transaction Reports and Analysis Centre confirmed a lawsuit on the bank by accusing it of breaching money laundering regulations. It allegedly stated that between the year 2013 and 2019, the bank did not report about more than $7.5 billion (Bloomberg 2019). This brings forward the picture of the bank’s breached financial system leading to corruption. The organisation was also accused in the year 2016 for mispricing a bond pricing formula (Fargher 2019). Furthermore, the bank also embarked on Project Embed Rapid, in which a critical overhaul of the derivative compliance obligations was done. These issues were not as highlighted as the other breaches but they clearly depict the organisation’s corrupted officers.
For dealing with such sorts of inappreciable activities, in Westpac, there is a need that the regulations directed under Safe Work Australia and the Migration Act 1958 are followed so that any sort of exploitation is prohibited which involve slavery, sexual servitude or forced labour. This incident also provides a picture of corrupted workplace setting as the financial record was not effectively recorded, henceforth, Westpac must establish a clear link between the head of government relations and industry affairs and the employees so that any type of fraud or corruption related practices are easily reported. Also, there is a need to direct guideline regarding corruption policy. Westpac must direct the ethical behaviour of zero tolerance for corruption and bribery and a strict alliance with the anti-bribery and corruption law in all the jurisdictions in which it operates.
The country's Anti Money Laundering Agency has lodged accusations against Westpac for breaching the law despite the clear lessons ordered by the Banking Royal Commissions. AUSTRAC, money laundering regulator also sought penalties against Westpac in the Federal Court regarding the same (Bloomberg 2019). This brings forward a picture of dishonesty and the fraudulent behaviour in the firm as a result of which the Australian Law Reform Commission also released the discussion paper regarding the corporate criminal responsibility. The bank was charged with a civil penalty and the bank had to pay a fine of A$700 million (The Conversation 2019). There is a need for Westpac to ensure that effective attribution rules are reinforced by using one single method for attributing responsibility. The Trade Parties Act 1974 must be embedded into the organisational code of conduct so that the traditional focus on the act of senior managers provides a welcoming consistency in terms of the law.
Whistleblower protections are enacted for protecting the federal employees for disclosing corruption, illegally of the Government or waste from any sort of adverse consequences in the context of the employment (Kelchner 2017). It provides protection to them for receiving any sort of demotion, replacement by another employee or reduced payments. Amanda Wood, a former anti-corruption officer of Westpac informed regulators in the year 2018 about the bank's inability to report regarding millions of international payments (Mail Online 2019). Being a compliance officer, she reported about the organisation's hierarchy supporting money and power more than the regulations. Being a whistleblower, she stated that the organisation was more worried about the reputational damage rather than trying to find the solution to the problem. Post the revelation of the scandal, Mrs Wood departed from the bank and the issue was investigated by the Australian Prudential Regulation Authority (Mail Online 2019).
In Westpac, in order to avoid cases in future, it must ensure that the compliance committee strictly administers operations. It is crucial that the whistleblower service is hosted by the external company. It will make it easier for individuals to make a report and have an opportunity and at the same time remain anonymous. The organisation must lay prominence on dealing with such cases sensitively and sharing information to only those who are required for the investigation purpose (Kelchner 2017). The current code of conduct does not deal with the whistleblower protection in an accurate custom hence, there is a need for the organisation to strictly adhere to the Whistleblower Protection Policy 1989, for protecting people who expose any kind of illegal and dishonest activities within the organisation. As a part of this, a team of supervisors can be employed in different departments so that a close track of ethical considerations is ensured.
Enforcement encapsulates the process of safeguarding the compliance with regulations, standards, laws, social norms and rules (Cardona et al. 2019). It is an integral component of the code of conduct as it ensures that compelling observance of compliance with the obligations is safeguarded. The Westpac transaction reporting systems were in the pitiable state in the year 2016, after WIB's head of compliance expressed concerns in terms of breach of enforcement of around 400000 foreign exchange transactions in the year 2016 which were not reported (Financial Review 2019). Also, the head reported that there is a need for compliance in terms of product risk assessments within the division.
There is a need for proper enforcement of the regulations and the code of conduct within the workplace so that any sort of glitches are eradicated in future. The organisation confirms that it complies with the Westpac group's internal policies (McIlroy 2019). It also states that if any sort of pitfalls is witnessed between the regulations and laws being applied in the policies and procedures, it is immediately reported and a higher standard of behaviour is enforced (Westpac 2020). However, it is not strictly being incorporated in the organisation. Westpac must ensure strict enforcement with the regulations outlined by Australian Prudential Regulation Authority which is an independent statutory authority supervising the institutions across the banking, superannuation and financial institutions.
This assessment has effectively laid prominence on the all-inclusive code of conduct that must be trailed within Westpac. The key ethical issues considered in the assessment are discrimination, exploitation, corruption, whistleblower protection, fraudulent behaviour and dishonesty and enforcement. Discrimination influences the employees’ performance as well as organisational profitability. The case of Adelaide-based financial planner suing the bank for about $1 million after being informed him being discriminated on the grounds of background is elaborated. The organizational internal managerial team was ineffective in dealing with the same. There is a need for effective non-tolerant policies for such practices in the bank.
Similarly the ineffective monitoring of LitePay and the customers sending the payments via the application and was indulged in child trafficking and exploitation. The organization must embed the Anti-slavery, immigration and human rights framework. For effective anti-corruption reporting, Westpac must strictly enforce anti-bribery and corruption law. The Trade Parties Act, 1974 must be embedded to deal with fraudulent behaviour. Employing departmental supervisors and Whistleblower Protection Policy 1989 in the firm is another tactic to improve the code of conduct. It can be inferred from the assessment that there is a strict need for Westpac to restructure its code of conduct and adhere to the Australian Prudential Regulation Authority’s regulations.
Bloomberg. 2019. Why Heads Are Rolling at Another Big Australian Bank.
Financial Review. 2019. How Westpac became ground zero for compliance breaches.
Westpac. 2020. Code of Conduct.
Mail Online. 2019. Dumped Westpac 'whistleblower' accuses bosses of being driven by 'status, money and power' at the expense of protecting their customers.
The Conversation. 2019. Westpac’s scandal highlights a system failing to deter corporate wrongdoing.
Adelaide Now. 2016. Adelaide man sues Westpac for $1 million over race discrimination.
McIlroy, J. 2019. Westpac scandal underlines coalition's hypocrisy on banks, unions. Green Left Weekly, (1247), p.7.
Fargher, I.K. 2019. How Westpac is alleged to have broken anti-money laundering laws 23 million times, 2.
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Kelchner, L. 2017. The importance of ethics in organizations. Accessed May, 10, p.2017.
Cardona, R.J., Rezaee, Z., Rivera-Ortiz, W. and Vega-Vilca, J.C. 2019. Regulatory Enforcement of Accounting Ethics in Puerto Rico. Journal of Business Ethics, pp.1-14.
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