Handbook on Corporate Governance in Financial Institutions

Handbook on Corporate Governance in Financial Institutions

Research Handbooks in Business and Management series

Edited by Christine A. Mallin

The global financial crisis has led to more and more focus on corporate governance and financial institutions. There has been much coverage in the media about various corporate governance related issues in banks and other financial institutions, such as executive directors’ remuneration and bankers’ bonuses, board composition and board diversity. This engaging book, dedicated to the corporate governance of banks and other financial institutions, makes a timely and accessible contribution to the literature in this area. The chapters highlight many of the shortcomings of corporate governance which have led to financial scandals, whilst indicating areas where corporate governance can be strengthened and improved.

Chapter 8: Failure in corporate governance: financial planning and greed

Gail Pearson

Subjects: business and management, corporate governance, economics and finance, financial economics and regulation


The revelations of malpractice in a financial planning arm of one of Australia’s oldest banks led to an unprecedented public apology, further government enquiries and calls for a Royal Commission. This raises questions about the way in which large financial institutions ensure compliance with the law, and how financial advice is provided. It has highlighted tension between revenue streams from customers and advice for customers, and gaps between the rhetoric of governance and its practices. It also points to shortcomings in interactions between the corporate regulator and large financial institutions. This is one part of an unfinished story of how Australia is bringing accountability to organizations that deal in other people’s money. The relevant entities are Commonwealth Financial Planning Limited (CFPL) which reported through Colonial First State (CFS) to the Commonwealth Bank of Australia (CBA).

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