Guest Lecture Session in KFA Business School
2019-05-17Guest Lecture Session in KFA Business School
As part of this month's Guest Lecture Session, MBA fourth semester students of KFA Business School got the opportunity to attend the lecture by the Risk and Compliance Manager of a Bank in Australia.
The key points that were discussed in the session are as follows:
A. New Australian Banking Association’s Banking Code of Practice & Ethics
The new Banking Code of Practice (“Code”) will come into effect on 1st July 2019 and will replace the 2013 version of the Code. The Code will introduce new measures to protect consumer interests, increase transparency and accountability and build trust and confidence in banks. All member banks of the Australian Banking Association with a retail presence in Australia, must sign up to the Code as a condition of their ABA membership. This mandatory requirement is in contrast to the 2013 version where adoption was purely voluntary.
The guiding Principles underpinning the Code are:
1. Trust and confidence
2. Integrity
3. Service
4. Transparency and accountability
Customers, investors, employees and communities expect the behaviour of banks to meet high ethical standards, backed up by the right internal culture and practices
B. This Code comes in response to a 2018 findings from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry have indicated a negative culture within Banks, amid allegations of fraud, deception, and money laundering, among various other crimes. Two such issues were mentioned.
1. Environmental Scandals
Major Australian banks were known to be financing and profiting from activities destructive to the Great Barrier Reef.
Australia's big four banks are leading lenders to the massive expansion in coal and gas shipments through the Great Barrier Reef, contradicting their own pledges to curb carbon emissions and preserve sensitive environmental areas.
In late 2014, it was revealed that “one prominent bank was advising Indian coal miner Adani on its proposed development in Queensland's Galilee basin."
2. Insurance division scandals
It was reported alleged systemic issues about the insurance divisions. A claimant who suffered a heart attack and nearly died had his claim declined based on an outdated medical definition in his insurance policy. The company admitted it was a bad judgement.
B. Case of CBA:
CBA want to be 'the ethical bank'
David Turner, CBA chairman declared on November 17, 2015 declared, “We will be the ethical bank, the bank others look up to for honesty, transparency, decency, good management, openness.”
The revised values adopted by CBA are more action-oriented and accountable, for eg:
- We do what is right
- We are accountable
- We are dedicated to service
- We pursue excellence
- We get things done
The Policies and practices are implemented in the sectors of Governance, Social, and Environment and Climate
While taking any ethical decision, the staffs of the bank have been trained to adopt the ‘Should We?’ rather than ‘Can We? Test. This framework will guide directors, executives and employees alike through the "Can we? Should we?" decisions they face every day.
Overall, it was a very fruitful session and added abundant values to the learning of MBA fourth semester students of KFA Business School.
