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Leadership, Culture and Employee Deceit: the case of the National Australia Bank

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  • Steven Dellaportas
  • Barry J. Cooper
  • Peter Braica

Abstract

The National Australia Bank (NAB), one of Australia's largest banks, announced losses in 2004 of AUD$360 million due to unauthorised foreign currency trading activities by four employees who incurred and deceptively concealed the losses. The NAB had in place risk limits and supervision to prevent trading desks ever reaching positions of this magnitude. However, the risk management policies and procedures proved ineffective. The purpose of this paper is to analyse the deceit, via a content analysis of official investigative reports and other published documents, to determine the extent to which the Bank's culture and leadership may have influenced the rogue traders' behaviour. The findings suggest that cultural issues, and the role played by the Bank's leaders, were influential in creating a profit‐driven culture that ultimately impacted the Bank's foreign exchange operating activities.

Suggested Citation

  • Steven Dellaportas & Barry J. Cooper & Peter Braica, 2007. "Leadership, Culture and Employee Deceit: the case of the National Australia Bank," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1442-1452, November.
    • Handle: RePEc:bla:corgov:v:15:y:2007:i:6:p:1442-1452
    DOI: 10.1111/j.1467-8683.2007.00597.x
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    References listed on IDEAS

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    1. Joanne Martin, 1995. "The Style and Structure of Cultures in Organizations: Three Perspectives," Organization Science, INFORMS, vol. 6(2), pages 230-232, April.
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    Cited by:

    1. Felicity Fallon & Barry J. Cooper, 2015. "Corporate Culture and Greed — The Case of the Australian Wheat Board," Australian Accounting Review, CPA Australia, vol. 25(1), pages 71-83, March.
    2. Nonna Martinov-Bennie, 2007. "What We Might Learn About Fraud and Corporate Governance from NAB's Annus Horribilis," Australian Accounting Review, CPA Australia, vol. 17(43), pages 85-90, November.
    3. Jennifer Kunz & Mathias Heitz, 2021. "Banks’ risk culture and management control systems: A systematic literature review," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(4), pages 439-493, December.
    4. Hagen Rafeld & Sebastian G. Fritz-Morgenthal & Peter N. Posch, 2020. "Whale Watching on the Trading Floor: Unravelling Collusive Rogue Trading in Banks," Journal of Business Ethics, Springer, vol. 165(4), pages 633-657, September.
    5. Masoud Shadnam & Andrew Crane & Thomas B. Lawrence, 2020. "Who Calls It? Actors and Accounts in the Social Construction of Organizational Moral Failure," Journal of Business Ethics, Springer, vol. 165(4), pages 699-717, September.

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