The policy of CSR can be considered from the morality of a business, which is set on the basis of ethical standards and these are crucial for making moral judgments. Culture plays a crucial role in binding an organization, uniting the individuals and helping with the accomplishment of desired ends. Under the scope of corporate governance, it is the responsibility of the Board of Directors for making- up and enforcing corporate governance, while creating an inextricable link between corporate culture and corporate governance. In this context for the case of HIH, Justice Owen highlighted the role of culture in corporate governance:
“I am not so much concerned with the content of a corporate governance model as with the culture of the organisation to which it attaches. For me, the key to good corporate governance lies in substance, not form. It is about the way the directors of a company create and develop a model to fit the circumstances of that company and then test it periodically for its practical effectiveness.”
This statement depicts the disinclination in the middle management of HIH for accepting responsibility towards inappropriate practice. Managers had been found taking steps to falsify the company’s returns or accounts as lodged by the statutory authorities. In addition, functional delineation in the accessibility of fiduciary duty as a result of merits extending the duties beyond the relationship of employment. This reflects the ambiguity for the intentional scope. The senior management of HIH failed in reporting important facts to the Board with respect to the direction and operation of the organization. This resulted in the perpetuation of inappropriate organizational culture.
On the contrary, when considering the case of Leighton Group, there had been integration of safety in the culture of corporate governance across the organization. Leighton has considered performance with safety as a major aspect. The Board of Directors contribute to the body of governance perceiving safety, while operating as per the Ethics and Compliance Committee of the organization. The members of safety committee are inclusive of three categories of board members that are outsiders, related insiders and insiders. The committee holds a major responsibility of monitoring and reviewing compliance with applicable requirements of laws and regulations within the scope of perceiving safety. Also, the underlying principles for effective corporate governance were: 1) laying strong foundation for oversight and management, 2) structuring the board for value addition, 3) promoting responsible and ethical decision making, 4) safeguarding integrity within the reporting of finance, 5) making balanced and timely disclosure, 6) respecting each and every right of the shareholders, 7) recognizing and managing risk, 8) encouraging to enhance performance, 9) renumerating with responsibility and fairness, and 10) recognizing each and every legitimate interest of the stakeholders.