BFX3999 case Study PDF

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Role of finance in shaping society...

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Ethics refers to the adoption and promotion of integrity, fairness, justice, truthfulness, respect, and honesty in the personal and professional aspects of life. Ethical behaviour is not a duty or responsibility of a single person in the corporate world, and it has to be performed by each and every level in the organisation for an ethically successful organisation. Ethics is about doing the rightful. Unethical behaviour should not be performed even if it is lawful to do so. Ethical behaviour should be kept above all the internal as well as external stakeholders. An organisation should act in the best interest of the shareholders within the limits of ethical conducts. Why care about ethics Ethics should be prioritised as it promotes different positive characteristics for the organisation. Ethics brings sustainability to the organisation with the change in the financial environment dynamics, and stakeholders prioritise the organisations having a good ethical reputation in the financial market. Ethics is one of the factors to bring sustainability within the organisation and promotes the financial market. The financial market is one of the riskiest markets, with a lot of default risks or frauds. The financial system, along with the imposition of good ethical behaviour, promotes trust between counterparties and attracts new entrants in the financial market a well. Ethics also proves to be a great pillar in structuring a good team, productivity, and leadership as it builds confidence and loyalty in the internal operations. The increasing significance of ethics has added value to the law as well, and the best practice is said to be the which is ethical and lawful. It is not necessary that a lawful decision is ethical. Therefore an activity should be best performed under ethical as well as lawful code of conduct. Ethical practices involve a lot of costs and sometimes puts the individual or organisation at the worst consequences, but overall it improves the reputation of the market, organisations, and individuals. Hence, performing ethical behaviour and delivering ethical thinking and practices is beneficial for all the factors associated. There are different concepts of Bruner that can be implemented: In order to be a good person with great moral values and respect for ethical practices, if I face an ethical dilemma at work in my career, I would do try and make the decision in the most effective and ethical manner for a rebalancing of the ethics at my work. I believe in the concept of utilitarianism of doing good to most of the people and harming the least. Therefore, I would

do a thorough evaluation of the dilemma and use a decision-making model to decide under the limitation of the ethics and do the rightful thing providing justice and encouraging adoption of ethics, values and good morals. I would try to be a person who encourages good ethical culture and working environment. If I did anything wrong from my end, I would accept that mistake and face up the consequences. My decision making would involve all the stakeholders involved, different decision opportunities available, the best decision to be implemented, and measures consequences of the decision implemented. AMP admits lying to ASIC Key ethical issues The ethical issues involve AMP limited involved in fraudulent activity of charging its customers for the services that it does not provide. Ahead of this, the company made a lot of falsified statements to ASIC about its unethical and unlawful activity. Into the investigation, it was found that some of the company's advisors were having compliance concerns and were also engaged in illegal, dishonest, fraudulent, incompetent, and negligent behaviours. The advisors were also seen as not contacting the clients and collecting commissions from clients by changing products. All these behaviours are against the CFA code of conduct. Breach of CFA code of conducts There were different code and standards breached in this misconduct: 

Knowledge of the law: Even after knowing the unlawful activities, the company has not stopped the misconducts.

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Misconduct: The company and advisors were involved in misconduct of fraud, charging clients unnecessarily, and collecting commissions unethically.

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Loyalty, prudence, and care: The company has not acted in the best interest of the clients.

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Responsibility of supervisors: The managers have not kept a keen view of the activities of the advisors.

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Independence and objectivity: The fee and commission charged had compromised the independence and objectivity of the members of the organisation.

Ahead of this, the company has kept self-interest above the client's well being by not acting with integrity, diligence, competence, and an ethical way. The company has not encouraged ethical behaviour, and has not complied with regulatory authorities, and also lied about its practices to ASIC. 'Misled and deceived': poor culture root of misconduct, commission told Key ethical issues 

Around 469 cases of misconducts related to responsible lending laws in car loan and credit card business.

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55 cases of mortgage frauds.

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Managers were taking a bribe to approve loans, which are not even affordable or usable.

Breach of CFA code of conducts 

Knowledge of the law: CBA has not complied with the applicable regulatory authorities.

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Independence and objectivity: The managers of the company followed unethical practices of bribe and brought misconducts in their activities.

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Misrepresentation: The company misrepresented information in order to enable the loans, which were not possible otherwise.

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Misconduct: The complete case relates to fraud and dishonesty that affected the integrity of the organisation.

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Responsibility of supervisors: The top management has failed to stop fraudulent activities and misconduct.

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Loyalty Prudence and care: The company has not acted in the best interest of the clients by enabling non-useful and affordable loans.

Bribe and unlawful loans are completely against ethics and laws. Such practices not only affects the organisation but also hinders the trust, integrity, and belief in the industry of the internal as well as external stakeholders associated....