Corporate Governance For National Australia Bank

Governance of Organization

Discuss about the Corporate Governance for National Australia Bank.

The Corporate Governance rules are considered as the important aspect of an organization. The NBA (National Bank of Australia) is considered as the organization which is defined in the report for an appropriate discussion. The NBA is considered as the renowned banking structure in Australia and deals in various financial and the banking aspects. The bank believes in the investment aspects and tries to provide the appropriate services to the customers with the various options. The NBA is considered as the public identity and helps in providing the various different types of the product and services to the people, who are availing the facilities related to it. There are various issues related to the bank, which are defined on the public level and for managing these aspects, the appropriate corporate governance rules are taken into consideration. From the past few years, due to increase in the competition and the involvement of other small & big banks in the same field, the banking sector is facing the problems in a wide range. For managing the flow of the work and to make it more synchronized, the Corporate governance rules are being defined and implemented. These corporate governance rules may vary according to the different countries and organizations (MyShareTrading Team, 2013).

For defining the corporate governance rules in an appropriate manner, the organization which is taken into consideration is the National Australia Bank (NAB) which is helpful in defining the major issues defined in public. The further description and the related rules of the governance are provided in the report defined below. The major steps which are covered in the report relates to the governance of the organization in which the major standards and the rules are being identified for the corporate governance. Apart from this, the critical review related to the corporate governance is defined which is followed by the recommendations and the conclusion section (Cameron, 2014).

The organization’s strong position and the stable identity are maintained due to the help of the corporate governance. The corporate governance will be helpful in providing the suitable aspects related to the organizational management and also helps in providing the suitability standards to the higher escalation to manage the coordination between the stakeholders and the organization as well. The feature like transparency, fairness, appropriate coordination, and many other aspects are taken into consideration (World Bank Group, 2016). The corporate governance is also identified for maintaining the equilibrium between the organization and the stakeholders by following the appropriate rules & set of protocol for the improvement.

Critical Review

The policies, principle and the standards followed by the corporate governance in every organization are quite similar and helps in providing the assistance to the organization to achieve the target related to the smooth running and appropriate flow of the process. The good corporate governance features always try to improve the efficiency and working aspects of the organization. There are some standards which are specified by the government and some of the standards specified are defined by the organization itself (PJSC Enel Russia, 2015).

The corporate governance rules in an organization is required to be developed in an appropriate manner and the specific code of the corporate behavior is being identified on the initial level. In reviewing the organization and to identify the working methodology related to it, the most appropriate standards which are helpful in the suitable processing are defined below.

The accountability is considered as the most appropriate feature which is helpful in managing all the legal and formal aspects related to the organization. By the help of this, the accountability and the process can be managed as per the requirement of the organization. Apart from this, fairing is the other aspect which is helpful in providing the equal rights to all the employees in the appropriate manner (National Australia Bank, 2014). The third aspect relates to the transparency in which the transparent laws and the legal decisions are provided to the employees in all the possible manners. The basic aim of the corporate governance is to provide the legal assistance, so it is essential to manage all the perspectives in an appropriate manner. Other than this, the transparency aspects also provide the financial conditions, environmental aspects and free access to the ownership and management. Finally, the responsibility is the aspect which is helpful in managing all the perspectives of the organization.

The corporate governance also helps in solving the issues related to the stakeholders. The management of the stakeholders is managed with the help of the corporate governance. The above defined standards are appropriate for the existing condition because by using these aspects, it becomes easier to manage the major corporate governance rules related to the organization. In the current scenario, the NBA is taken into consideration and along with that, the subsidiaries & the current stakeholders are also identified on the wide level (National Australia Bank Limited, 2016).

All these elements are considered as the relevant and most appropriate in contrast of the NBA because they are helpful in showing the actual picture of the organization. The different elements which are identified for the corporate governance are helpful in reviewing the major aspects and also tries to identify the appropriate equilibrium among the situations which are arising in the organization. These elements are considered as important because with these elements, the corporate governance aspects of the NBA are clarified and the chances for an improvement in the existing structure can also increase simultaneously. Apart from this, the elements also assists in identifying the appropriate priorities related to the corporate governance.

 It is appropriate to use them because with these elements, the basic review and the current scenario related to the corporate governance can be identified on the initial level. It is also defined in the various articles and the journals that various issues and the problems are generating in the NBA on the frequent level. So, to manage all these issues as per the ASX guidelines and with the help of the specific corporate governance principle, the elements are considered as the major supporting procedures (Jain, 2007).

So, by considering all these perspectives, it is quite clear that the elements are considered as the major crucial and the coordination & transparency among them can only able to provide the suitable output and help in managing the corporate governance of the organization. The successful implementation of the corporate governance can be done with the help of these elements only.

By considering all the qualities and the basic protocols related to the corporate governance principles, it is quite clear that to manage the equilibrium and the appropriate coordination among the stakeholders and the organization, it is essential to follow the rules defined by the corporate governance. The organization is always in the good books of the customers and the investors, but sometimes due to some of the major issues, the bank also has to face the issues related the corporate governance. These issues are defined in the articles and the annual reports of the organization. In one of the article, the head and the former chief of the organization clearly defines that the organization is facing the major issues related to the debt and the other issues in the organization. The media disclose the progress report, but with that, the major debt issues are also identified for the NAB. For overcoming all these aspects and to manage the corporate governance policies of the organization, the specific rules and regulations are designed to handle the situation of the organization and the employee also tries to follow the same protocol as far as possible. The basic rules related to the corporate governance are defined through the ASX principle. The ASX is the legal organization which is meant for defining the appropriate rules and the protocols for the specific organizations. With the standard aspects which are derived from the above paragraphs on the international level, the specific principles of the organization are also defined on the wide level. The individual discussion of each aspect is defined below to state the importance of the corporate governance in the organization. The simple chart is shown below to mention the basic elements of the Corporate Governance in the NAB.

The corporate governance standards are mainly defined by the managers or the higher authorities of the organization. The board of directors of the NAB are mainly defined for making the ASX principle. The highly intelligent and the authorized team are defined for making the corporate governance rules in the appropriate way. The board of directors is categorized into various sections, but the most appropriate ratio is that the members should not be less than 5 and not more than 14. The total number of boards of directors is divided as per the division shown below: –

• Three independent non-executive directors (Ms. McBride, David Armstrong and Peeyush Gupta).
• Two non- executive directors
• Two executive directors for the retirement
• One executive director of the appointments
• Many other directors and the executives can be hired time to time as per the requirement of the organization.

These team members of the board of directors helps in managing the major aspects related to the corporate governance in all the possible ways and also provides the suitable assistance. The directors and the other executives specifically also follow the definite tenure to manage their job profiles and after completion of this tenure, they again have to follow the specific rules and regulations for the further processing (McConnell, 2016). Similarly, the directors and the executives of the organization are also following their specific tenure which can be 5, 7 and 9 years. The selection of the tenure may be done as per the rules defined according to the organization. In fact, the board of directors can able to present their independent views by following the ASX principles as well.

To manage the corporate governance in the NBA, the specific committees are defined for the appropriate management. To make the corporate governance successful, the committees are divided into various sections which are named as the audit committee, risk committee, remuneration committee, information committee and the information technology committee. All these committees possess their specific areas of specialization and try to solve the issues which are commonly or rarely occurring in the organization. Other than this, the committee also helps in developing the systematic approach in an appropriate and sequential manner (Dochas, 2011).

The committee and the members related to it possess different duties and also provides the appropriate aspects for the development of the organization (i.e NBA). The different responsibilities which are carried under the corporate governance are solving of the issues in an appropriate manner in the organization, arrangement of the suitable board meetings, appropriate induction and continuing the appropriate process of the coordination, planning the succession of the current aspects and the resolving of the conflicts in an appropriate manner. By all these aspects, the operations related to the corporate governance can be solved and the suitable output can easily be generated.

The responsibilities which are mainly focused on the corporate governance are the different types of arrangement related to the remunerations, the accessing to the management, the requirements related to the shareholdings and the other related aspects which are carried out in the form of the responsibilities. These responsibilities are helpful in assisting the clients in all the possible manner.

Apart from this, the tools and techniques are also specified for the corporate governance. There are specific methodology and tools designed for checking the accuracy of the current corporate governance rules. These tools and techniques are named as the matrix, graphs and tables, formation of the list to manage the task and many others (Jain & Thomson, 2007). These techniques provide the output on the individual level and also provide the suitable assistance.

The critical aspect of the corporate governance defined by the NBA is that it is quite difficult to manage the coordination among the stakeholders and the organization. As the board of directors have their independent views and the decision making power, so they take decisions as per their own requirement. The formation of the committees and the groups related to it are also not appropriate as per the requirement. For sustaining the better opportunities in the corporate governance principle, the committee should also be organized in a well-defined manner. The support and the appropriate guidance provided by the organization are quite improved, but as the issues in the basic structures are created, so it is essential to manage the basic aspects to manage the smooth processing of the current structure.

Conclusion

The corporate governance is an aspect which is considered as the strongest pillar or the growth and development aspect of the organization. The studies depicted above clearly shows that due to the impact of the corporate governance, the well-defined strategic approaches can be identified, but simultaneously the negative impact of the process can create issues related to the sustainability and stability. For the discussion in the report NBA takes into consideration, but the other organizations are also using the appropriate rules and regulations related to the corporate governance on a wider level. To improve the major aspects related to the corporate governance, it is essential to follow some of the recommendations defined below.

By analyzing the aspects related to the corporate governance and by confirming the major aspects related to it, the scenario provides the different types of frames by which the complete picture can be analyzed. By using the corporate governance, the organization (NBA) can able to manage the sustainability on the large scale. It is recommended that the Australian bank has to be more precise and transparent in the decision making system. By the help of this, the results can be generated in the well-defined manner. It is also recommended that the strategic approach is well suited in comparison to the random strategic aspects. The well planned strategic approach will be helpful in generating the suitable output and the management of the organization can also be identified in an appropriate manner.

As we know that change is the law of nature so, if the appropriate changes are not recommended then it will create the growth in the constant form. It is also recommended that according to the current changes and continuously changing environment, the appropriate changes should also commence so that the smooth working of the corporate governance can be managed.

References

Cameron, A., 2014. Corporate Governance Principles and Recommendations: ASX Corporate Governance Council, Available at: https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf

Dochas, 2011. Corporate governance assessment tool, Available at: https://www.dochas.ie/Shared/Files/4/dochas-assessment-tool-v3-writable.pdf

Jain, A., 2007. Corporate Governance, Board Responsibilities, and Financial Performance: The National Bank of Australia. Corporate Governance, Board Responsibilities, and Financial Performance: The National Bank of Australia, 02 April, 6(2).

Jain, A. & Thomson, D., 2007. Corporate Governance, Board Responsibilities, and Financial Performance: The National Bank of Australia. Corporate Governance, Board Responsibilities, and Financial Performance: The National Bank of Australia, April.

McConnell, P., 2016. National Australia Bank – 30 years of strategy failure. National Australia Bank – 30 years of strategy failure, 23 February.

MyShareTrading Team, 2013. Australian Publicly Listed Companies on the Australian Sharemarket (ASX). Australian Publicly Listed Companies on the Australian Sharemarket (ASX).

National Australia Bank Limited, 2016. National Australia Bank Ltd. code of conduct. National Australia Bank Ltd. code of conduct.

National Australia Bank, 2014. Corporate governance: Annual Financial Report: NAB, Available at: https://www.nab.com.au/content/dam/nabrwd/About-Us/corporate-governance-statement.pdf

PJSC Enel Russia, 2015. Principles of Corporate Governance. Principles of Corporate Governance.

World Bank Group, 2016. About Corporate Governance. About Corporate Governance, Available at: https://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Corporate+Governance.