Differences in CSR Disclosure in the Annual Reports of Islamic and Conventional Banks: Evidence from Kuwait

Ghareeb M Almutairi,Mohammad H J Almarri,Ahmad S Alsamhan

doi:10.5539/ass.v16n12p8

Abstract

This paper explores the differences in corporate social responsibility disclosure in the annual reports of Islamic and conventional banks operating in Kuwait. A content analysis of the six banks&rsquo; annual reports from 2007 through 2009 was conducted to examine their corporate social responsibility practices in relation to the marketplace, workplace, community, and environment. The results show that both types of banks made certain social disclosures in the years studied. Interestingly, despite Islamic Sharia calls for and emphasizes ethical business behavior, the Islamic banks studied disclosed less corporate social responsibility information as compared with conventional banks. Furthermore, the corporate social responsibility information disclosed by the Islamic banks declined noticeably over time. The conventional banks, however, increased their disclosures during the financial crisis of 2008. By measuring and comparing the volume of corporate social responsibility information disclosed by the three Islamic banks and the three conventional banks in Kuwait the results of this study contribute to the corporate social responsibility literature.

Highlights

Corporate social responsibility (CSR) and CSR reporting is not a new concept in the accounting literature
The findings of this study contribute to the CSR literature by detailing the differences and similarities between Islamic and conventional banks with respect to the volume, the types of CSR information and the kinds of news disclosed by the two groups of banks
Examining CSR reporting from the standpoint of an emerging market such as Kuwait would contribute to a better understanding of social accounting problems

Summary

Introduction

Corporate social responsibility (CSR) and CSR reporting is not a new concept in the accounting literature. A large number of studies have empirically assessed CSR reporting practices around the world. The amount of research, which has been focused on CSR reporting practices in the Islamic world in general and Arab countries, in particular has been limited. A growing number of studies have investigated the influence of Islamic values on CSR reporting practices in general and Islamic banks in particular (Kamla & Rammal, 2013; Belal et al, 2011; Aribi & Gao, 2010). All of the mentioned papers agreed on the fact that Islamic banks are expected to be more socially responsible than conventional ones

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Conclusion