The Australian Wheat Board scandal in 2005 is a situation where the board was exposed to be paying kickbacks to the Iraq government during the reign of Saddam Hussein so that it could get the lucrative wheat contract in Iraqi government (Sarpal, 2014, p. 95). The Australian Wheat Board members acted contrary to the laws of Australia and the United Nations laws. Therefore, the practice by the Australian Wheat Board has since brought a question of the effects of the corporate culture on the corporate governance practices not only of the Australian Wheat Board but also of the other corporate companies and businesses within Australia (Mouselli & Hussainey, 2018, p. 453).
Elshandidy & Neri (2014, p. 331) have defined corporate culture has the behaviours and the beliefs that determine how the management of a certain company its employees relate and interact with one another. The corporate culture can be described in terms of the principles governing a corporation, the setup of the business’s office, how to tackle competition, hiring decisions, turnover, dressing code, and how to treat clients in an organisation.
Corporate culture can affect corporate governance practice either morally or immorally depending on the corporate culture an organisation is following as illustrated by Sharma & Khanna (2014, p. 14) in their research. There are two types of corporate culture according to Griffin et al. (2014) they include healthy and weak corporate cultures. The former Australian Wheat Board members went against corporate culture of the Australian Wheat Board hence, they paid for contracts in Iraq. Therefore they had weak corporate culture in the organisation during their tenure.
Healthy corporate culture can increase the reputation of Australian Wheat Board. If the current leaders of Australian Wheat Board are following healthy corporate culture in their daily activities the reputation of the organisation will be back and the 2005 scandal will forgotten (Schiehll, Ahmadjian & Filatotchev, 2014, p. 179). Second effect of healthy corporate culture on the governance of Australian Wheat Board is that the productivity will increase hence; the corporation will enjoy long term shareholder value.
Lastly healthy corporate culture will make the employees trust the management of Australian Wheat Board and their customers will be more loyal to the board. Therefore, Australian Wheat Board will increase its profits and Australians will value the board very much. However, poor or weak corporate culture can impact the Australian Wheat Board negatively. According to Sarpal (2014, p. 95) weak corporate culture can make the leaders of the corporation have bad conduct and the board can suffer anther scandal.
Second, the corporation can experience financial loss and poor performance which may lead to its downfall. Kumar & Zattoni (2014, p. 294) therefore, urge the managers of corporations not only the Australian Wheat Board management but also all other companies to encourage healthy corporate culture within the organisations they are working in.
ONE of the financial services companies addressed in the FSRC (2018)
The Financial Services Royal Commission (2018) has addressed a number of issues of misconduct by the financial institutions of Australia (Schiehll, Ahmadjian & Filatotchev, 2014, p. 179). The commission has addresses the alleged bribery by the Top Australian banks. The commission discovered that the banks were taking bribes from customers so that they could give the customers loans.
The commission has also found out that the staff had been taking bribes from their customers for years and some of the stuffs were sucked in 201 (Mouselli & Hussainey, 2018, p. 453)5. One of the financial services companies that the Financial Services Royal Commission (2018) is National Australian bank. The matter is still in the hands Financial Services Royal Commission (2018) and reports will submitted to His Excellency General Honourable Sir Peter Cosgrove AK MC (Retd), Commonwealth of Australia Governor-General of the not late that 30th September 2018.
Principles of the ASX Principles
ASX Corporate Governance Council is an organisation that has been mandated by the Australian government to look into the governance of corporations in Australia. There six principles that are part of ASX Principles which could have been used by the Australian Wheat Board of management to avoid the scandals that happened in 2005 and 2006 (Schiehll, Ahmadjian & Filatotchev, 2014, p. 179). Anon (2018, p. 293), has outlined the six principle which include accountability, transparency, sound decision making, policies and procedures, responsibility and fairness. Sharma & Khanna (2014, p. 14) define accountably as the situation where a person or a leader know the purpose of the business and he or she must be accountable for his or her actions.
Therefore, Accountability according to Han, Lee & Song (2014, p. 482) could have discouraged the management from engaging in illegal behaviours because it could have helped them realise the goals, mission, values and the visions of the organisation. Transparency is where all the activities of a corporation are done in transparent and unquestionable manner through releasing reports about the organisation’s activities regularly. The management of Australian Wheat Board could have not engaged in illegal activities if they could have been publishing all their activities transparently through a manual report. If the Australian Wheat Board managing body could have made their decisions soundly, they could have not paid the Iraq government for the contract.
They could have conducted market analysis and customer surveys to see how they could win the supply of grain tender legally. Policies and procedures drive how the corporations should be run (Elshandidy & Neri, 2014, p. 331). Australian Wheat Board could have used the policies and procedures on how to get contracts instead of using illegal means. The principle of responsibility is where every member of the board is given his or her own responsibility and roles, therefore, if any problem occurs, the persons will suffers and take responsibility. Australian Wheat Board could have avoided the scandal if they were only fair in their daily operations (Mouselli & Hussainey, 2018, p. 453).
They did not want to play fair when fighting to get the contract to supply grains in Iraq therefore, they bribed the Saddam Hussein’ government to get the contract. The principles outlined ASX Corporate Governance Council can help the corporate governors to adopt good corporate governance. Zahra (2014, p. 77) did research and found out that most of the governors ignored the principles that have been put in place to govern and monitor their daily activities in their various corporations. ASX Corporate Governance Council has outlined good corporate principles that the former Australian Wheat Board of managers could have followed to avoid the scandal.
Part 2
Does Compliance with a Written Code of Conducts guaranty Ethical behaviour of Corporate Officers
There are various written code of ethics to govern the corporate officer in Australia, they include, the Corporations Law, the ASX Principles, The code of conducts for corporate governors and professional accountants. According to Marie L’Huillier (2014, p. 300) these laws ensures that all the people involved in corporate businesses conduct their businesses with conformity of the law. However, the question for this discussion is if compliance with these laws will make the corporate officers have good ethics when transacting their business in corporations.
Before entering deep into the discussion, the knowledge of the concept compliance is important. Mohanty (2018, P. 265), has defined compliance has the act in which a person is working, living and conducting his or her activities in accordance with the set rules or regulations. To understand how compliance with code of ethics and other laws in place promote good behaviour we must know what are these codes and their importance.
Written Code of Conducts for Corporate Businesses in Australia
Written codes of conducts are documents that the legislature of Australia has put in place to guide all the corporate officers on how to conduct themselves when on duty (Wang, 2018, p. 252). The laws have also described policies and procedures through which all corporate officers should follow when executing corporate duties or activities. The Australia government has put down some code of conducts that must be followed by all corporate officers.
The laws include the Corporations Law, the ASX Principles, and the code of conducts for corporate governors and professional accountants (Elshandidy & Neri, 2014, p. 331). All these written code emphasis on good morals and good behaviour when conducting corporate activities. Code of ethics ethical principles that should guide all stakeholders in the corporate societies, commitment to the corporation’s purpose, missions, and visions and it advocates for respect for all in the work place.
The code of ethics advocates for the following in all corporate societies; first, all the Australian corporate officers should respect each other and respect the functions of other workers (Mouselli & Hussainey, 2018, p. 453). Second, the code of ethics advocate for equal treatment and fairness within the working space in the corporate societies (Elshandidy & Neri, 2014, p. 331). Third, all the officers must be accountable for their actions and they should know that if they mess there are consequences. Fourth, the corporate officers should make sound decisions ethically without involving personal feelings and they must also involve other people during decision making process.
Fifth, they should act in accordance with all legal requirements to avoid breaking laws. Sixth, the corporate officers should act in a responsible manner, in other words they should be responsible for their actions. Last but not least, the corporate officers should always be fair in whatever they do. So if the corporate officers comply with all that the written codes are advocating for their moral standards will raise rapidly and their ethical behaviour will be admirable (Licht, 2016). The paper has looked at the importance of written code of conducts to further justify that the compliance with a Written Code of Conducts guaranty Ethical behaviour of Corporate Officers.
Importance of Written Code of Conducts
Code of conducts has numerous importance in the corporate setup. Licht (2016) suggested the following two importance of code of ethics they include; one, code of conduct prevents unjust behaviour in the corporate environment. A good code of ethics does not allow the employees or the corporate officers to treat their fellow colleagues, junior officer and customers unfairly.
Ginena (2012, p. 86) says that if the corporate comply and work in accordance with the code of ethics, their moral standards will increase hence, they will have good ethical behaviour. In this context, they will treat all corporate stakeholders equally and fairly without favouring anybody. Secondly, code of ethics promotes goodness among the officers in a corporate society. Therefore, if the officers comply with the code of conducts, they will be good to other and not harm them. Goodness improves ethical behaviour among the corporate officers; therefore, they should comply with the codes of conducts (Kumar & Zattoni, 2013, p. 437).
Kumar & Zattoni (2013, p. 437), also outlined some two importance of code of ethics to support the discussion. The codes include one; the codes make the corporate officer responsible for their actions. If an officer know his or her responsibilities and know that if he or she goes against his or her roles the officer will be solely responsible for his actions (Licht, 2016).
Being responsible is also a way of improving the ethical behaviour, so if the officers comply they will be responsible (Ginena, 2012, p. 86). The second importance is that code of ethics makes people accountable for their decisions. Hence, they will do what is required because they know they must explain the source of their decisions (Kumar & Zattoni, 2013, p. 437). By discussing the importance of the code of ethics, the paper has answered the argument that compliance with the written laws grantees good ethical behaviours.
Conclusion
Corporate culture is vital in determining the corporate governance of managements in organisations in Australia. A good corporate culture in an organisation ensures that the board of governors of the organisations are exercising healthy corporate governance. If the former board of governors of Australian Wheat Board had encouraged healthy corporate culture within the organisation, they would have not engaged in illegal activities. Compliance with the written code of ethics ensures that the corporate officers have good ethical behaviour has discussed above.
References
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