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Corporate governance failure and its impact on National Australia Bank's performance

journal contribution
posted on 2006-01-01, 00:00 authored by Dianne Thomson, Ameeta JainAmeeta Jain
The National Australia Bank (NAB) is the largest financial services institution listed on the Australian stock exchange and is within the 30 most profitable financial services organisation in the world. In January 2004, the bank disclosed to the public that it had identified losses relating to unauthorised trading in foreign currency options amounting to AUD360 million. This foreign exchange debacle was classified as operational risk, the risk of loss resulting from inadequate or failed processes, people, or systems and reiterated the importance of corporate governance for banks. Concurrent issues of National Australia Bank’s AUD4.1 billion loss on US HomeSide loans in 2001, the degree of strength of their risk management practices and lack of auditor independence, were raised by the US Securities and Exchange Commission in 2004, reinforcing the view that corporate governance had not been given the priority it deserved over a number of years. This paper will assess and critically analyse the impact of corporate governance failure by management and Board of Directors on NAB’s performance over the years 2001-2005.

History

Journal

Journal of business case studies

Volume

2

Issue

1

Pagination

41 - 55

Publisher

The Clute Institute for Academic Research

Location

Littleton, Colo.

ISSN

1555-3353

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2006, The Clute Institute for Academic Research

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