MARKING ASSIGNMENT GUIDE & CASE STUDY GUIDELINES

Student Name	Number

 

Criteria	Grades					Comments
(Weighting)	Fail <50%	Pass 50-59%	Credit Pass 60-69%	Distinction 70-79%	High Distinction 80-100%
Understanding and communication of key business issues(4)
Discussion of detailed findings and recommendations (4)
Ability to identify key strategic issues (4)
Workable and innovative solutions to key strategic issues (4)
Format and readability of report (4)
Score:               /20

 Overall feedback:

CASE STUDY GUIDELINES

Case Study Objectives:

• To examine how C S R initiatives can serve as a vehicle for developing overall business goals.

To judge the value of C S R and determineits place in today’s business operations.

Questions to explore:

1. Whatis the purpose of business?

2. Should companies become involved in CorporateSocial Responsibility? Provide reasons and other working examples.

3. Whatother CorporateSocialResponsibilityinitiativescould BankWestundertake? Provide a short justification for each initiative.

4. IsCorporateSocial Responsibilityin banking a viable business strategyor is it justa fad? Adopt a critical approach here-question the whole concept of CSR.

To help you think about these broad headings:

ENVIRONMENT

• Develop a company-wide environmentalpolicy?
• Conducta company-wide environmentalrisk assessment?

Think of more along these lines

 

WORKPLACE

• Undertakea pay equitiesinvestigationtodetermineifmen and women working in thesame role atthebank receive thesame pay.

MARKETPLACE

• EstablishBankWestas an arranger offinanceforrenewable or ‘green’energy projectsin Australia.

COMMUNITY

• Build theprofileoftheFoundationby settingup a program where staff can provide approved pro-bono work tosupportFoundationpartners eg ITcan help build a website;marketingcan help writea marketing plan;legal can read over some contracts…

IsCorporateSocialResponsibilityinbankingaviablebusinessstrategyorisitjust afad?

 

BankWestis preparing toinvest$38 million over 5 years intoCSR witha directreturnofonly $28.2million.Thisrepresentsa loss tothebottomline. However,theindirectbenefitsare estimatedtogenerate$103.6million and it is in thisarea thattheBank believes itwill profit.

 

Banking on Corporate Social Responsibility

in Australia: CaseStudy

BES3500

CaseStudy

BankingonCorporate Social Responsibility

inAustralia: CaseStudy

AmandaRayner,BankWest’sHeadofStrategy,hadjustfinishedhermeetingwiththe ManagingDirector,JackSilvertonandwasheadingbacktoheroffice. Ithadbeena longsessionbutitwasimportanttheywerebothclearonhowBankWest’snew CorporateSocialResponsibilitystrategywouldberolledout. JacksawtheCSR

initiativeascentraltoBankWest’songoingdevelopmentofitsexternalbrandandcoreto itsinternalcultureandemployeevalueproposition. JackknewthatCSRwasalsoa priorityforitsparentcompany,theCommonwealthBankofAustralia,oneofAustralia’s bigfourbanks,whichhadacquiredBankWestinDecember2008. Thiswasjustbefore JackhadbecomeManagingDirectorinJanuary2009,havingpreviouslyheldsenior positionsattheCommonwealthBank.

JackandAmandahadagreedthatCSRwasaboutconfiguringBankWest’sprinciples, policies,processes,practicesandprogramstoachievesomesocialgoodbeyond BankWest’sinterests. Itneededtobeanapproachthatcreatedvalueandpositively impactedthefourkeyCSRactivityareasof

• community
• marketplace
• environment
• workplace.

TheyhaddiscussedtheneedfortheBanktohaveadedicatedgovernancestructurein placetosteertheagenda,embedtheagreedapproachintothelinesofbusinessand managerisk,auditing,decision-making,measurementandfunding. Amandahad outlinedhowshesawthestrategywouldmeetcommercial,legalandpublic expectationsandensuretheBankbehavedethically. Jackhadstressedthatfocusing oncommunityinvolvementandbuildingmeaningfulrelationshipswiththerestofsociety wasparamountaswasensuringthatCSRwasintegratedintotheBank’sday-to-day business.

 

InfinalisingtheBankWestapproachtoCSR,AmandaandJackhadspentquitesome timetalkingaboutBankWest’shistoryandhowthatcurrentlypositionedthe organisation. AmandahadbeenwithBankWestsince1997,twoCEOsprior,soshe wasabletosupplyalotofdetail. AmandahadexplainedthatBankWesthadbeen establishedin1895asagovernment-ownedagriculturalbankwithinWesternAustralia tohelpdevelopthefarmingindustry. In1911therewasanexpansionofactivityasit becameamortgagebank. In1945,theBankbecameafulltradingbankandwas

renamedtheRuralandIndustriesBankofWesternAustralia.In1994theBankchanged itsnametoBankofWesternAustraliaLtdwithatradingnameofBankWestandtookon anewcorporateidentityandliverytoclearlyidentifytheBankwithWesternAustraliaas awhole. In1995,afteralmost100yearsundergovernmentownership,BankWestwas

100%acquiredbytheBankofScotland,a300yearoldmajorUKbank. In1996

BankWestlistedontheAustralianStockExchangeasapubliccompanyandupto50%

ofthesharesweremadeavailableforpeopletopurchase.

 

In1997anewerainBankWestbeganwiththeappointmentofaManagingDirector, TomBooth,whocamefromtheNationalAustraliaBank,Australia’slargestbank. Tom setaboutdevelopinganewwayofworkingwithintheBankandfocusedondelivering superiorvaluetocustomers,creatinganexcitingandrewardingenvironmentforstaff andincreasingwealthforshareholders. Heintroducedasetofcorevaluescalled

GuidingPrinciplesandpromotedtheseasthewaytodobusiness. Duringhistenurehe oversawarangeofCSRpracticesincludingsponsorshipofcommunityandsporting groups,institutionofemployeeprogramslikeInvestorsinPeople,andtriplebottomline (people,profits,planet)reporting. InMay2003,HBOSplc,formedthrougha2001 mergerofBankofScotlandandtheUKHalifaxBank,acquiredalltheoutstanding

sharesinBankWest.On26August2003theFederalCourtofAustraliaapprovedthe

shareschemeandtradinginBankWestsharesontheAustralianStockExchange ceased,therebysignifyingtheendingofanotherphaseoftheiconicWesternAustralian financialservicesinstitution. TomremainedasBankWest’sManagingDirectoruntilmid

2004atwhichpointanewCEOtookoverthereins.

 

TheHBOSAustraliaCEO,DougWentworth,tookuphispositioninJuly2004having cometothepositionfromWestpac,oneofAustralia’sbigfourbanks. Hehad responsibilityfortheHBOSAustraliaGroup,whichincludedBankWest,StAndrew’s Insurance,CapitalFinance,andBOSInternational. Dougledthedrivetoreplicatethe HBOSUKparentcompany’strackrecordofofferingcompetitive,value-for-moneyand customer-focusedsolutionsforthebenefitofAustraliancustomers. HBOSUKhadan establishedrecordofCSRwithinitiativessuchas

• Foundationforprovidingdonationstodesignatedcauses
• Staffvolunteeringprogramtosupportcommunitynot-for-profits
• Paperrecycling
• Improvedaccessibilitytoproductsforthedisadvantaged
• Peoplemeasuretoincreasestaffengagement
• Communitysponsorships
• Socialandenvironmentalriskmanagement

MindfulofHBOSUK’scommitmenttoCSR,Dougbegantoincorporatetheseintothe differentHBOSAustraliabusinesseswithvaryingdegreesofsuccess. Engaginghis DivisionalHeadswassometimesachallengeastheywereoftenunconvincedofthe costsversusbenefitsofparticularinitiatives.

HBOSAustralia’sinterestinCSRtookabitofabackseatastheimpactoftheworld creditcrunchresultingfromtheFebruary2007collapseoftheUSsub-primeloanmarket begantospread. InAugust2007HBOSUK’s wholesalelendingstartedtodryup leavingHBOS witha“fundinggap”of£198billioncausedbytheir£456billioninloans

tocustomersand£258billionindepositsfromcustomers.Innormalcircumstances HBOSwouldraisethismoneyinthewholesalemoneymarkets,butthecreditcrunch, wasmakingitincreasinglydifficult. Overthenextfewmonthsfinancialviabilitybecame thekeyfocusforHBOSUKresultingintheirannouncementon31July2008ofaprofit fallof51%. On18September2008TSBLloyds,amajorUKbankingentity,tookover allHBOSoperations,includingHBOSAustralia. On8October2008the CommonwealthBankofAustraliaboughtBankWestfor$2.1billionwiththesale

becomingfinalisedon19December2008. TheHBOSAustraliaCEO,DougWentworth,

remainedwiththeorganisationuntilJackSilvertontookoverasManagingDirectorof

BankWeston6Jan2009.

AsJackandAmandahaddiscussed,havingspentthelasttwoyearsworkingthrough theGlobalFinancialCrisisissuesandthemergingwiththeCommonwealthBank,now wasagoodtimetoemphasiseBankWest’scontributionstoCorporateSocial Responsibility. Itwasalsoawaytocounteractthecurrent‘bankbashing’thatwas happeninginAustralia,whichhadbeeninflamedbythemajorbanksraisingtheirloan interestratesabovetherisessetbytheReserveBank. Amandaknewthatallbank activitieswereunderthemediaspotlightandthatgoodnewsstorieswereimportant.

Onceshereachedheroffice,Amandasetaboutgatheringhermaterialforhernext meetingwiththeHeadsofeachBankWestDivision. Shethoughtabouthowshewould handlethequestionssheknewtheDivisionalHeadswouldraise

• HowwouldcustomersviewBankWest’smorepublicmoveintoCSR?
• WouldcustomersconsidertheBank’sCSRapproachaspartofalong-term businessstrategy,orwouldtheyseeitmerelyasamarketinggimmick?
• WhatwerethebenefitsofaCSRpolicy?
• Howmuchinvestmentdidthisstrategyrequire?
• Wouldadoptingsocio-environmentalstandardsmeanthey’dloseclientsand dealsiftheyoperatedinsectorssuchasasbestos,fishharvestingortimber felling?
• WhatwouldhappeniftheCSRpolicyputfinancialresultsatrisk?

AmandacheckedhernotesonthebenefitsofBankWestbecomingmoreactiveinCSR

andtheriskimpactofchangingnothing

• Benefits

o  Improvedsocialimpact

o  Positiveenvironmentalimpact

o  Improvedstaffsatisfactionandmorale

o  Reducedstaffturnover

o  Improvedproductivity

o  Improvedcustomersatisfaction

o  Improvedbrandequity/reputation

o  Reducedcosts

o  Improvedrevenues

• Riskofchangingnothing

o  GrowthwillbearisktoCBA’sstandingandreputation

o  Parentalpressuretoact

o  Legislativepressure

o  Negativepublicity

o  Slowergrowth

o  Long-termreputationaldamage

o  Trailingcompetitors

o  Increasedturnover/HRcosts

SatisfiedtherewasacompellingargumentforfocusingonCSR,Amandareviewedthe materialsheandherteamhadspentthelastsixmonthscompiling(seeExhibits)and feltsureshewouldbeabletoprovidetheDivisionalHeadswiththeanswers. Shewas confidentthatshecouldconvincethemthatCSRwouldaidBankWest’ssuccess.

Exhibit1:BankWestCSRCostsandBenefits

AgoodCSRstrategy needstocombinethreekeyelementstobesuccessful

VALUE

SUSTAINABILITY

APPROACH

“…corporationsrecognisethatsustainablebusiness operationandthussustainablefinancialperformancearedependantonbuildingandmaintainingthetrustandrespectofthecommunity,andinthevastmajorityofcases,actaccordingly…”

–InstituteofCharteredAccountants,Australia

Exhibit2:BankWestCSRValue

WecancreatesignificantvaluethroughimprovedCorporateSocialResponsibility

StaffEngagement

CommunityImpact

EnvironmentalImpact

Attract&RetainStaff/ ImproveProductivity/ BoostSatisfaction&Morale

AttractandRetain Customersand Colleagues

LowerEnergy Consumption

&WasteOutput

LowerRecruitmentCosts/HigherRevenuesperFTE/LowerPersonnelCosts

HigherRevenue

Supportfor“BestPeople”

Lower EnergyCosts

Workplace

Community

CREATING

VALUE

Environment

$

Marketplace                  $

“ForeverydollarinvestedinCSR,wewillmakethreedollarsback!”

PhilHodkinson

CBA

GroupFinance

Director

2

Exhibit3:CSRStrategy

ASustainableCSRStrategyhas threekeycomponents

Investment

Governance

Structure

Measurement

&Reporting

“Asstewardsofshareholderinterests,boardsshouldbe focusedonthe long-­‐term sustainability

ofthefirmratherthanonthemarketnoise”-­‐ Al Gore,NobelPeacePrizeWinner 2007

3

Exhibit4:BankWestCSRCostsandBenefits

 

Year	2011	2012	2013	2014	2015	TOTAL
Investment	$3.0m	$5.0m	$10.0m	$10.0m	$10.0m	$38.0m
%Revenue	0.14%	0.20%	0.32%	0.26%	0.22%	0.23%
Direct Benefits	NIL	$4.6m	$8.4m	$7.0m	$8.2m	$28.2m
Indirect Benefits	NIL	$16.7m	$17.2m	$19.8m	$21.7m	$75.4m
TOTAL BENEFITS	NIL	$21.3m	$25.6m	$26.8m	$29.9m	$103.6m

Exhibit5:ANZ’sapproachtoCSR

Aspiresto bea Global LeaderinCSR

Community– “EarningCommunityTrust”

•    Achieve    60    000    hours    of    staff volunteering •    Achieve 15%    participation    in    workplace giving •    Work with    Indigenous    organisations    and    other    stakeholders    to    develop    and    implement    a    Reconciliation    Action    Plan •    Political Donations	Marketplace– “PuttingCustomersFirst” •    To become    a    role    model    of    how    successful    corporations    work    with    and    behave    toward    staff •    Develop and    implement    social    management    policies    for    Forestry,    Mining    and    Energy    for    the    Institutional    Business •    Stakeholder forums •    Public    policy-­‐making    process •    Enable 1500    people    to    participate      in    “Saver    Plus”    in    2011 •    Responsible Lending
Environment– “ManagingEnvironmentalImpactandSupplyChain” •     Working with    suppliers    to    minimise    the    environmental    consequences    of    business operations •     Involved in    discussions    with    clients    about    their    efforts    to    introduce    carbon-­‐reducing technologies and    support    those    investing    in    alternative    energies •     Improve supply    chain    reporting •     Integration of    a    new    sustainable    procurement    policy •     Reviewing water    and    energy    use    and    controls •     Reviewing waste    improvement    –    recycling •     Reviewing transportation    –    fuel    efficiency,    greenhouse    gas    emissions,    air    pollution ratings and    alternative    fuels •     Reduce environmental    footprint    by    a    minimum    of    5%    per    full    time    staffer    over    a    2 year period    to    12/11 •     Engage with    internal    and    external    stakeholders    to    establish    environmental performance targets    for    2011-­‐2013
Workplace– “Leading&InspiringPeople” •     Focus on    achieving    24%    female    representation    at    executive    level    in    2011 •     Employment    of    50    indigenous    Australians    in    2011    as    part    of    ANZ’s    Indigenous    Employment    strategy •     Close the    gap    on    pay    differentials    between    genders    at    all    levels    in    2011 •     Implementation of    “Breakout”    encouraging    colleagues    to    build    strong, responsive    and    trusted    relationships    with    all    stakeholders •     Continued development    of    workplace    flexibility •     Zero harm    approach    on    OH&S •     Introduction of    Accelerated    Development    programs    for    the    top    20%    of    manager    level employees

Exhibit6:CBA’sapproachtoCSR

CBA inCSR

Financialliteracyforlife

Community

•    Commonwealth Bank    Foundation, •    Sports –    Cricket    and    Netball    sponsorships. •    Major sponsor    of    the    Australian    of    the    Year    awards •    Legacy Day    Badge    appeal •    ‘Life Skills’    program    through    Wesley    Mission •    The national    appeal    partner    for    the    Australian    Red    Cross
Marketplace •    One of    the    largest    listed    companies    on    the    Australian    Stock    Exchange    and    is •    included in    the    Morgan    Stanley    Capital    Global    Index •    CommSec reports    and    updates •    Key focus    on    financial    literacy: oDollars and    Sense    website          oKnow Your    Money    website          oStudent    Banking oPractical Guides    and    publications
Environment •    Only Australian    financial    institution    involved    in    the    Federal    Government’s    Climate    Clever program. •    Offers Generation    Global    Sustainability    Fund    by    Colonial    First    State. •    Bright    Sparks    Schools    Program      focuses    on    climate    change •    Green Ambassadors    program    awards    young    people    for    being    actively    involved    in improving their    local    environment. •    Partnership with    the    Great    Barrier    Reef    Foundation    through    their    Coral    Futures    program and ZooX™Fund.
Workplace Staff in    the    community    –    staff    donate    to    charitable    fund                                                                                                          Workplace    diversity OHS practices    Shareplan    for    staff Professional Development    for    staff

Community

•    NAB AFL    Auskick    program •    AFL Rising    Star    award                           Ovarian    Cancer    Silver    Ribbon          campaign Marketplace •    NAB’s Agribusiness    Awards    for    Excellence •    Micro enterprise          loans    for    businesses •    Signatory to          the          Equator          Principles •    Publishers of          a    range          of    commentary    reports          relating    to the markets •    $30 million          commitment          to    financially          marginalised    Australians •    Social banking          products    &          services    and          including concession bank    accounts •    Safe, affordable          loans    and          insurance •    No interest    loans          scheme    (NILS®)          for          individuals. •    Chinese, Korean          and    Vietnamese    internet          banking websites •    Step Up          Loans    named    best    socially          responsible    product          by          Money          magazine Environment •    Signatory to          UNEP    FI    Statement    since    2002 •    Working towards    carbon    neutral •    National @    Docklands    building    –    acquired          a    4-­‐star    Australian          Greenhouse    Building          Rating Workplace •    Share plan                                                         Employee Volunteer    Program •    Recognition programs                 Flexible schedules          such          as    job          sharing    and          part          -­‐time work. •    Graduate careers                                           Internships •    Employer of    Choice for Women

Exhibit7:NAB’sapproachtoCSR

NABinCSR

Backingpeople,notjustbankingthem

Exhibit8:Westpac’sapproachtoCSR

WestpacinCSR

Community

• Major sponsorship  of    rescue    services
• Lifesaving Australia
• Rescue boats,  planes    and    helicopters
• Community involvement    report
• Indigenous assistance  program
• Key  partnerships  include    Mission    Australia,    Juvenile    Diabetes    Research    Foundation,    Salvation    Army,    Smith    Family
• Employee involvement    supported  in

community projects

• Capacity building  in    communities

Marketplace

• Social Banking  products    and    services

including those    significant    to

• financial inclusion  and    literacy
• Financial literacy  in    disadvantaged    and

remote communities

• Responsible banking  including    responsible

lending practices

• Looking after  customers    from    diverse

backgrounds

• Sustainable supply  chain    management
• Initial signatory  to    Equator    Principles
• Green products  such    as    Landcare    Term    Deposit    Account
• Earth Credit    Card
• Signatory to  the    UN    Global    Compact    on    Human    Rights

Environment

Workplace

• Career transitioning
• Women in  management
• Work life  balance
• Training, Learning  and    Development

practices

• Remuneration
• Part    time  and    job    sharing
• Concern reporting  and    whistleblowing
• Equal opportunity  and    diversity

Partnership with  Landcare    Australia

• Publishes a    Stakeholder  Impact    report    each    year.
• Reduced their  greenhouse    emissions    by    45%    since    1996
• Top honours  at    Banksia    Awards
• Obtained 5-­‐star  Australian    Greenhouse    Building    Rating    for    three    properties
• The great    paper  challenge

 

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