The paper provides a brief information about the business operations and actions of AMP which is one of the largest wealth management firm. Further, it elucidates that how the company is able to achieve long-term mission and vision after considering corporate governance and ethics. The deficiencies related to corporate governance and ethics have been evaluated in the task briefly. These deficiencies may also impact on the practices and operations of AMP in the global market. Aside this, it outlines innovative strategies and policies that helping in protecting the whistleblowers largely. Here is the discussion about CSR activities and ethics that also play a major role in boosting profitability. At the end, some strategies have been implemented to avoid and detect scandal and issues.
Corporate governance is considered a base for every company because it helps in carrying out business activities efficiently. Here is the discussion about the role, significance, and issues of corporate governance and ethics that are being encountered by AMP company while exercising business internationally. AMP is a wealth management organization that provides financial and advisory services to customers in the world. It explains that how the firm manages and handles the various issues related to corporate governance and ethics. The paper also outlines innovative strategies and mechanisms that help to protect whistleblowers along with this it discusses that how strategies and mechanisms provide ample of benefits to the stakeholders in the competitive market. More detail of this paper has been drawn below.
AMP is a wealth management Corporation that offers services and solutions across investment management, financial device, banking, retirement income, life insurance, self-managed superannuation and investing (Linkedin, 2018). The corporation has a long history in supporting ample of customers managed and handles their finances and attains their goals and objectives. In today’s modern world, the company is leading independent wealth management Corporation in New Zealand and Australia helping more than four million customers in the global market. AMP was incorporated in 1848 having headquartered in Sydney, Australia. Along with this, the company is listed on in New Zealand and Australia stock exchange. It is reported that AMP is the biggest shareholder registers with most significant shareholder living in New Zealand and Australia. The corporation was demerged its UK activities and operations in 2003 and created the Henderson group. It is stated that the company has a partner with around 55,000 organizations to offer good services to the customers across the world. AMP has approx 750,000 shareholders and 100,000 customers in the market (AMP, 2018). AMP also hires and retains the workers with appropriate attributes and skill set for the employment. Along with this, the company fosters a good and strong relationship with employees to ensure a high retention rate, incentives and remuneration packages in the competitive market (AMP, 2018).
Corporate governance is a platform, procedure, and relations by which corporations are managed and controlled. On the other hand, ethics refers to the principles and rules that govern an individual behavior, actions or conducting an activity and operation (Benn & Dunphy, 2013). AMP has committed to excellence in corporate governance, which is a significant part for the long term sustainability and performance of the firm. AMP Corporation has given a commitment to ESG and it is the accountable investing amount by launching a new decision making structure or framework. In ethical consideration, the firm is responsible for the effective and unique investment management. A new and innovative framework has been incorporated into the company’s existing environmental, social and governance (ESG) and responsible investment philosophy that is implemented across the globe. The firm has managed and dealt with various ethical issues as part of its ESG analysis and by rendering responsible investment choices to the customers (Benn & Dunphy, 2013). In today’s era, the company is facing ample of issues in the system of ethics and corporate governance that have been drawn below.
Efficiency of the rules and principles in raising governance standards is questionable: It is noted that governance arrangements did not manage and operate to protect the firm. Let’s focus at the financial sector in Australia those rules and principles have not been of the slightest and effective value at all (AMP, 2017). Excessive focus on non-core management issue is one of the biggest deficiencies at AMP which may put impact on the shareholder value and worth. It is stated that principles and rules had led to directors being swamped by hundreds of pages of board paper and they do not have time to debate significant strategic issues and challenges. It is further noted that obedience to the rules and principles was ineffective and inadequate in eliminating governance failures at AMP and other corporations (Edmans, 2012).
Committee structure and framework does not ensure stronger outputs. It is stated principles and rules had led to directors being flooded by CEO and they do not have adequate time to debate significant strategic issues or challenges. The obedience to the rules and principles was inadequate and ineffective in eliminating governance failures at AMP and other organizations (Minterellison, 2018). It is further shown that remuneration systems and procedures employed by AMP failed to provide remuneration packages and incentives to the employees. Performance evaluation of directors is another deficiency at AMP that could affect directly the performance and efficiency of the workers. Unexpected fall in the share price just because of the corporate governance issues also impact on the financial position of the firm. AMP further fails to meet the fundamental tenants of corporate governance. The transparency issue is being dealt by the company while implementing the business activities internationally. Transparency refers to the openness which indicates the organization’s relationship with its workers (Adams, 2017).
Apart from the corporate governance issues, the company also faces various ethical issues that adversely impact on the productivity and performance of the employees in the global market. It is analyzed that the code of conduct is a set of rules, regulations, and policies explaining the social norms, responsibilities, religious and proper practices for an individual and group. It has been seen that there are a tremendous deficiencies in the ethical system of AMP thus, the company has to face various issues in the market while functioning. The ethical issues may also affect the interests and rights of the stakeholders internationally. Diversity is one of the major concerns hence the company faces various challenges while working (Norwani, Zam & Chek, 2011).
The company is unable to maintain diversity at the workplace due to lack of training programs and sessions. Maximizing and enhancing the value of each worker’s contribution is a key factor in the company’s success and growth. The most significant and fundamental ethical issue that AMP faces is trust and integrity. Due to trust and ethical issue, the firm is failed to maintain a good and strong relationship with customers while rendering the services to them. Along with this, it states that the company has failed to make strict rules, policies, and legislation through which the workers perform tasks and duties in a hassle-free manner. Therefore, it quite complex for the top management and board adhere the corporate governance and ethical policies. The ethical and corporate governance issues further may affect the worth and value of the stakeholders in the global market (Mutch & Aitken, 2009).
It has been noted from the various analysis that AMP does not focus on the culture and working environment. As a result, it affects the performance and working capacity of the workers adversely. Chanticleer discovered the bad situation of AMP whistleblower that affected the growth and targets of the firm in a large extent (Cunningham, 2010). The people who worked in the company super division between 2014 to 2016 was disturbed to seek the employee openly and effectively talking about methods and techniques that could be used to get around the rules, legislation and policies designed to end commissions and general advise and separate personal. There are various events in which the firm has found unashamedly lying to corporate governance and ethics. It is investigated that AMP is unable to provide lucrative perks and incentives to the employees thus; it may affect the growth and progress of the company adversely (Eatough, Rebellato & Grieg, 2013).
Along with this, the company charges high fees from the customers that highly influence the brand image of the company in the international market. There are ample of AMP customers who have never got any advice and suggestion from the company but they have been taken fees for it. It was one of the biggest brewing financial scandals for AMP which largely affected the position of the company in the global market. The remediation costs of this scandal are quite impossible to calculate. The firm has accepted that it has charged around 15,000 customers $4.7 million in adviser fees and further the financial planner then had left the company and not been replaced later (Ward, 2018). The board of director and management teams do not follow the code of conducts and ethics, therefore, they could fail to fulfill the needs and demands of the customers. Due to the lack of proper policies and strategies, the board of director and managers are unable to act effectively and ethically.
It is noted that board of director of AMP limited and management team is committed to a whistleblower program that promotes, supports and protects the responsible reporting of wrongdoing such as misconduct, fraud, misbehavior, and questionable accounting. The professionalism, integrity, and honesty are being considered by the company to protect the whistleblower. In today’s modern world, the company is measuring various standards, policies, and approaches to eliminate the various issues and challenges while functioning (Simha & Cullen, 2012). The teams and managers at AMP focus on the collaboration and communication at the workplace while performing roles and responsibilities effectively. Employee engagement, employee experience, and employee effectiveness are three pillars of the corporate culture at AMP. The innovative policies and standards that have been set by AMP help to protect the value and rights of the stakeholders.
The company takes constructive feedback and reviews from the customers while rendering the services to them. It is analyzed that culture is a leading and biggest level that any company has to drive performance and productivity. The employees are empowered to work effectively and independently and make unique decisions that are exercised by core values and culture. With effective commitment and collaboration to reporting wrongdoing and misconduct, the company will continue to develop and enhance a supportive working environment and culture which aligns various strong and unique values (Reuters, 2018). The commitment further helps to prevent loss and harm caused by the illegal, unethical and irresponsible act. If the employees are not feeling comfortable and safe reporting the misconduct and wrongdoing then they can call and report to the top management and board of director. This call would be independent who will bring challenge and information to prompt attention while keeping this information and facts confidential. It is noted that the whistleblower policy should be uploaded on the organization’s website apart from this the constitution of the whistleblower (Waples & Culbertson, 2011).
It states that the company is maintaining transparency in the workplace to generate more revenue and returns. It states that the firm also focuses on the diversity to attract a maximum number of clients in the market. It will help to protect the company from a whistleblower and along with this; it is helpful to make a favorable culture and atmosphere at the workplace. Strong culture further helps in preventing misconduct and wrongful act in the organization. It is noted that the firm constantly charging high fees from the clients that could affect the financial image and reputation of AMP in the global market. After the various research, it is analyzed that all these mechanisms are not sufficient to protect the various stakeholders (Australian Institute of company directors, 2018).
It is noted that AMP Corporation has failed to fulfill the corporate social responsibility and code of conducts at the workplace. Therefore, various strategies have been implemented to handle and prevent the above mentioned scandal that are discussed below.
After analyzing and evaluating the above case study, it is observed that the company like AMP should not have done the misconduct and misbehavior with employees because it hampers the image and brand reputation in a large extent. It has been learned from the above-discussed case study that organization should focus on the corporate social responsibilities, sustainability, and corporate governance to run the business in an effective manner. This will further help the firm to cope up and strive with competitors in the international market. It is observed that scandals are not good for any company because it hampers the profitability and image of the organization adversely. To be a leader and attain high profitability, the company needs to focus on corporate governance and whistleblower policies. A knowledge and information about corporate governance, CSR and ethics have been gathered from the above case study.
Conclusion
It is concluded from the above-mentioned study strong corporate governance and ethics help in maximizing and boosting the profitability and attracting the ample of clients in the global market. AMP is one of the leading wealth management companies that provide enormous retail and financial services to customers around the globe. It is further stated that AMP needs to focus on training and ethics to improve and enhance the initiatives and activities internationally. The above-mentioned analysis indicates that the company was not followed a unique and effective culture and further it was not focused on the corporate governance. As a result, various consequences and issues were faced by the firm. All these issues and challenges also affect the progress and profitability of AMP Company in today’s global market. It is further noted that the firm is making attractive and unique policies to handle and eliminate the issues related whistle blowers and poor corporate governance issues.
References
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Eatough, G., Rebellato, D., & Grieg, D. (2013). The Suspect Culture Book. Oberon Books.
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Linkedin.,(2018). About us[Online], Retrieved from https://in.linkedin.com/company/amp
Minterellison.,(2018). Corporate governance stock take: AMP chair David Murray’s comments have sparked broader debate [Online], Retrieved from https://www.minterellison.com/articles/amp-chair-david-murray-critiqueasx-corporate-governance-principles-and-recommendations
Mutch, N., & Aitken, R. (2009). Being fair and being seen to be fair: Corporate reputation and CSR partnerships. Australasian Marketing Journal (AMJ), 17(2), 92-98.
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