Corporate Social Responsibility (CSR) can be defined as a management concept in which the environmental and social concerns are integrated by the companies in their business operations. CSR is the way in which a balance between the social, economic and environmental imperatives is achieved by a company along with addressing the expectations of the stakeholders and shareholders. The proper implementation of a CSR concept in a company brings a number of competitive advantages such as increased profits and sales, savings in operations cost, efficient base of human resource, improved reputation and brand image, better risk management processes and decision making and improved productivity (Schwartz, 2017).
This report focuses on the CSR activities and governance structure of National Australia Bank through the application of analytical framework such as Wartick and Cochrane’s Typology and Carroll’s Pyramid. The report also highlights how National Australia Bank responds to the expectations of key stakeholders along with the gaps in the espoused and realized performance on CSR.
National Australia Bank is considered to be one of the largest financial institutions in Australia in terms of customers, earnings and market capitalization. The bank has employed more than 30,000 employees for the serving its customers who are spread at more than 900 locations in Australia, New Zealand and all across the world. Being the largest business bank of Australia, it also works with small, medium and large businesses. The bank was formed in the year 1982 as National Commercial Banking Corporation of Australia Limited by the merger of Commercial Banking Company of Sydney and National Bank of Australasia. The resultant company was later renamed as National Australia Bank Limited. The Bank is included in the list of ASX Top- 100 companies as its stock meets the investment benchmarks and minimum volume.
The approach adopted by National Australia Bank for undertaking social responsibility is to make a sustainable and positive impact in the lives of their people, customers, communities, shareholders and environment. Such practices are adopted for the purpose of achieving their vision i.e. to become the most respected bank of Australia and New Zealand. They aim at creating a social impact along with building on corporate responsibility and strong foundations in philanthropy for leveraging the expertise and core assets in the creation of shared value.
The basic aim behind their activities is to keep their customers as their prime focus along with using their strength as a major employer, bank and community’s active member for making difference in these areas:
Resilience and Financial Inclusion- Assisting people in accessing affordable and fair financial services. They aim at helping Australian and New Zealanders to build financial resilience for recovering from financial shocks.
Environmental wellbeing- They address the opportunities and risks due to climate change that arise from transition to low- carbon communities. Overall their aim is to adopt a sustainable approach for the purpose of minimizing their environmental footprint in the management of their business along with providing assistance to the customers in doing the same.
Social Cohesion- National Australia Bank works with their partners for the purpose of addressing enormous issues of the society in order to build connected and stronger communities. This includes family and domestic violence, gender equality, supporting indigenous success along with the exploration of their role in affordable housing (Tai & Chuang, 2014).
Different corporate social responsibilities have been organized by Carroll as a four- layered pyramid model which is also known as pyramid of responsibilities. The different responsibilities mentioned in the pyramid are economic, legal, ethical and philanthropic.
The economic responsibilities of as an establishment are to become profitable, make strategic decisions and to minimize cost. In other words, a society requires the economic performance of an organization. The second layer comprise of the legal responsibilities required by the society. It includes expectations such as obeying the law. The next stage is of the ethical responsibilities which are expected but not required by the society. The ethical responsibilities require the organization to behave ethically by performing the acts which are fair and right for the organization and avoid harm. Philanthropic responsibilities are on the top of CRR pyramid of Carroll and require an organization to perform the role of a good corporate citizen by taking steps for improving the quality of life of the society (Radzi, Lee, Halim & Siwar, 2018).
National Australia Bank established its foundation with the fulfillment of its economic responsibilities. When it was able to generate sufficient profits with minimum costs then it headed towards other responsibilities. For fulfilling its legal responsibilities, National Australia Bank has set up an audit committee which is responsible for ensuring the compliances with the applicable laws, rules and regulations. The ethical responsibilities of the bank are aimed to be fulfilled by following five values along with the policies and odes formulated by them which guide them in their behavior and decision making. Such values include do the right thing, be bold, will to win, passion for customers and respect for people. Philanthropic responsibilities are aimed to be fulfilled by the bank by undertaking diversity and inclusion in the workplace along with the promotion of gender equality. It supports Indigenous Australians along with supporting the customers in staying safe from domestic and family violence and assisting in crisis and natural disasters.
The interpretation made by Carroll relating to CSR was advanced by Wartick and Cochran. Their model reflects the interaction between the process of social responsiveness, principles of social responsibility and policies that are developed for the purpose of addressing the social issues (Zucchella & Urban, 2014).
The application of this framework in the context of National Australia Bank provides that every attempt is made by the bank for bringing a positive change in the society and making Australia move forward. It has contributed $13.4 billion towards the financing activities that supports transition towards low carbon economy and address climate change. It has also contributed $44.6 million towards the development of the communities in the year 2017. It also provides hardship assistance to the customers and supports them in staying safe from family and domestic violence (National Australia Bank, 2016).
The governance structure of National Australia Bank comprises of the following parties which in turn assists in the enhancement of accountability to the stakeholders and shareholders, ensuring accurate and timely disclosure of material facts and maintaining business integrity and ethics.
Board of Directors- the board of National Australia Bank is capable of providing the overall strategic direction for the entire group along with representing and serving the interest of their shareholders by way of creating sustainable value. The board comprise of majority of independent non- executive directors having broad range of skills, expertise and experience from different backgrounds.
Board Committees- for the purpose of effectively carrying out the responsibilities, a number of committees have been established by the board such as risk committee, audit committee, remuneration committee, nomination committee.
Audit Committee- the board is supported by the audit committee for maintaining the internal control system of the National Australia Bank’s group along with ensuring the compliances with the applicable rules, laws and regulations. The audit committee is also responsible for applying the procedures and accounting standards that are designed for the purpose of safeguarding the assets of the organization and for the maintenance of integrity in reporting and external financial disclosure.
Risk Committee- the board is supported by the risk committee by way of overseeing the risk profile of the National Australia Bank along with making appropriate recommendations that are concerned with the future risk appetite and practices related to management of risk. The risk committee is responsible for reviewing the plans of management for mitigating risks, monitoring the implementation of the plans and operation of control systems and internal compliances.
Remuneration Committee- the remuneration committee performs the function of supporting the board by way of assessing and reviewing the remuneration practices and policies of the National Australia Bank. The committee also performs the annual assessment of the effectiveness of the policies in the support of their business strategy.
Nomination Committee- the nomination committee performs the function of supporting the board in monitoring its composition and size including succession planning for senior management and directors, evaluation of the performances of individual directors and board committees and overseeing the professional development program of the board.
National Australia Bank takes all possible steps for responding towards the expectations of the stakeholders. It strives to maintain a constructive and open dialogue with the stakeholders by considering it important for the business. This is their way of understanding the expectations of the community, identifying the issues and discovering the opportunities for bringing improvement. The key stakeholders of National Australia Bank include employees and contractors, customers, analysts, investors (fund managers, shareholders and superannuation funds), suppliers, regulators, government and industry bodies, broader community such as their community partners and non- government organizations (NGOs) and media.
For the purpose of responding towards the expectations of the key stakeholders, National Australia Bank has identified 7 major themes that are of prime importance to the stakeholders and it is aligned with their ability for delivering their strategy. It continuously consults with a number of stakeholders for improving their approach to modern slavery, human rights and improper land acquisition. Their approach for the engagement of the stakeholders has been set out in their Corporate Responsibility Policy which takes into account Stakeholder Engagement Standard AA1000. They interact with their stakeholders in a responsive, respectful, authentic and open manner in the issues relating to mutual importance. More than $ 500,000 has been contributed by the National Australia Bank in the form of donations for supporting the communities in their recovering from flooding, cyclones and other natural disasters (National Australia Bank, 2016).
There are some gaps in the espoused and realized performance on CSR by National Australia Bank. Their aim was to make a sustainable and positive contribution to the businesses, people and communities to whom the bank owes its success. The female representation on the board is only 39% which is required to be increased for attaining its perspective of maintaining gender equality in the workplace and the community. Moreover, among the 33,000 people employed by the bank, approximately 200 employees are Indigenous Australians. The figure is required to be increased for achieving the objective of creating a stronger community by way of supporting Indigenous success (Sethi, Martell & Demir, 2017).
The amount of small loans and facilities provided to be utilized in the villages is further required to be increased. More than 513,000 small loans have been granted since 2005 (National Australia Bank, 2016). The bank needs to understand that the granting of small loans have the capability of changing the entire scenario by contributing towards the individual development of the people in the society. However, there is still a need for contributing more towards the recovery of the communities from the trauma and fulfillment of their needs (Boulouta & Pitelis, 2014).
Conclusion
Therefore, it can be concluded that National Australia Bank aims at becoming a good corporate citizen by fulfilling its responsibilities towards the society. The CSR Activities of National Australia Bank include assisting people in recovering from financial shocks, addressing societal issues such as gender inequality, family and domestic violence and aims at supporting indigenous success. It also aims at addressing the risk of climate change and takes steps for minimizing their impact on the environment. The analytical frameworks such as Carroll’s Pyramid and Wartick and Cochrane’s Typology have been applied on the practices undertaken by National Australia Bank. The governance structure provides that various committees have been formulated for ensuring overall compliance. However, there are some gaps in the performance of CSR which are still required to be met.
References
Boulouta, I. and Pitelis, C.N., 2014. Who needs CSR? The impact of corporate social responsibility on national competitiveness. Journal of business ethics, 119(3), pp.349-364.
Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of corporate social responsibility, 1(1), p.3.
National Australia Bank. 2016. CORPORATE GOVERNANCE AT NAB 2016 Corporate Governance Statement, [Online]. Available at: https://www.nab.com.au/content/dam/nabrwd/About-Us/corporategovernance/2016-corporate-governance-statement.pdf [Accessed on: 15 June 2018].
Radzi, N.A.M., Lee, K.E., Halim, S.A. and Siwar, C., 2018. What Drives Them to Do CSR? Another Empirical Study of CSR Motives from the Perspective of the Internal and External Stakeholders. International Information Institute (Tokyo). Information, 21(3), pp.909-928.
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
Sethi, S.P., Martell, T.F. and Demir, M., 2017. An evaluation of the quality of corporate social responsibility reports by some of the world’s largest financial institutions. Journal of business ethics, 140(4), pp.787-805.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Zucchella, A. and Urban, S., 2014. Futures of the sustainable firm: An evolutionary perspective. Futures, 63, pp.86-100
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download