Executive Summary

Analyzing the Recent Scandals

The Risk associated due to the recent events

• Reputation risk - This is the risk that is associated with the reputational loss, also losses the shareholder confidence and also create and also damages the public trust. In the case of the Westpac scandals, the company has to face reputational damages as their conduct or practices are not aligned with their standards or expectations when it comes to communication, regulatory bodies, or of the key shareholders. The reputational damage could have an adverse impact on the financial condition of the company, furthermore, they could provide their competitors with an opportunity where they can get an edge over the Westpac (Frost, 2020)

Models/tools used to identify risk impact/likelihood of an event

Many tools have been used to identify the risk and their likelihood when it comes to a certain event, in our case we will be using the Risk matrix tool to analyze the impact of the money laundering and child pedophile scandal. A risk matrix is a matrix that is used so that they could assess the risk and at the same time will help in analyzing the level of the risk by considering the probability as well as the likelihood against the consequences, through this simple mechanism, helps in increasing the visibility when it comes to risk and also helps in taking better decisions.

Risk Control

• They also will also aim towards meeting compliance and regulatory obligations.

• Make sure that they have adequate control over the excessive risk or those areas where they are undue at the risk concentration (Lannin, 2020).

Board risk awareness impacts on conformance and performance

According to law and practicality, the notion would be continued to support the proposition that the board should not indulge in day-to-day risk management (Westpac Group, 2020). However, the emphasis should be put on board directors by taking their oversight role, they could satisfy themselves that the risk management procedures, as well as the policies, have been designed and implemented by either risk manager or senior executives and all consistent with not only with company strategy but also with the risk appetite, however, a director needs to make sure these policies, as well as the procedure, are functioning as they are intended to be and accordingly necessary steps should be facilitated to support the appropriate risk awareness, that could escalate and goes beyond the companies appetite. It is important that the board are aware of the type as well as the magnitude of the risks that have emerged in the company and there should be a proper engagement towards the senior executive, CEO, and board of directors about the risk. Besides that, the rules and responsibilities that are occurring in different board committees who are looking for a specific categorization of risk should be properly reviewed and taken as a whole. In this place and the board's oversight function should be properly coordinated as well as should be comprehended (Westpac Group, 2020). The ability of the board or the committee should help them in performing the oversight role. However, it depends upon the relationship as well as the continuous love information that take place between directors, senior executive management, and top-level management, in case if the director feels that they are not getting educated information then, in that case, they should be proactive for seeking more information about the issue. As high quality timely and credible information is considered to be the prominent foundation on which effective responsive decisions could be made by the board. In the case of Westpac, they follow a three-line approach to aware of the board about the risk. The boards are placed at third-line their work at this stage is to conduct an independent assurance group audit is conducted in which it evaluates and provide opinion on the efficiency and adequacy of both first and second-line risk management techniques and approaches and they are also responsible for tracking remediation progress, as the main aim is to provide brief information to the board and the senior executives regarding the Westpac group governance, their internal controls and risk management so that it could be properly conveyed that everything is working efficiently (Westpac Group, 2020).

Recommendations

The board should be able to remote an effective will dialogue for the management, to make sure the appropriate resources are supporting the management system. In the above section, we have seen that risk management should be tailored according to the organization. in general, the effectiveness management should be capable enough to identify all the material risks that are associated with the company and this should be done promptly. the second step is to implement the appropriate risk strategies that are considered to be responsive when it comes to the risk profile of the company, it should also be aligned with its business strategies, and should threshold the risk tolerance. the third crucial step is to integrate the risk and risk management in such a way that it turns into strategy development and accordingly the business should make the decision throughout the company. Lastly, there should be an adequate transmission of high-quality unnecessary information with the respect to the material risk to the key stakeholders and the board of directors as well as the relevant committees so that immediate action could be taken without escalating the risk (WESTPAC GROUP, 2017).

• Analyzing the risk policies: it is important to review all the risk and procedure that have been adopted by the management, it should also consider the procedure that is used for reporting the matters to the appropriate key shareholder, board, and committees to make are sure they are appropriate as well as effective.

References

Barbaschow, A., 2020. Westpac Blames Technology And Human Error For Anti-Money Laundering Failings | Zdnet. [online] ZDNet. Available at: <https://www.zdnet.com/article/westpac-blames-technology-and-human-error-for-anti-money-laundering-failings/> [Accessed 8 December 2020].

Westpac Group, 2020. Risk Management. [online] Westpac.com.au. Available at: <https://www.westpac.com.au/about-westpac/westpac-group/corporate-governance/risk-management/> [Accessed 8 December 2020].

WESTPAC GROUP, 2017. WESTPAC GROUP CORPORATE GOVERNANCE STATEMENT. [online] Westpac.com.au. Available at: <https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/2017_Westpac_Corporate_Governance_Statement.pdf> [Accessed 8 December 2020].