Corporate Social Responsibility Of Banks Research Articles

The Effect of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from Credit Institutions in Vietnam

This study examines the relationship between corporate social responsibility (CSR) disclosure and financial performance of banks in Vietnam over the period 2011–2016. By using content analysis to approach CSR related data as well as ordinary least square (OLS) estimator to analyse data, the finding of this study indicate that there is significant negative relationship between CSR disclosure and financial performance of commercial banks in Vietnam. This result might be explained by additional requirements of the law for social responsibility while banks are in difficult situation as a result of economic slowdown during researched. Together with that, perception of banks’ customers toward banking corporate social responsibility of Vietnam also contributed to build up this negative linkage.

Correlation Between Banks Corporate Social Responsibility And Profitability: A Study of UAE, Bangladesh and India

The purpose of the study was to correlate bank investments into Corporate Social Responsibility (CSR) initiatives with the financial performance of profitability measured as Return on Assets (RAO) or Return on Equity (ROE). The selected bank from UAE was Abu Dhabi Commercial Bank (ADCB). From Bangladesh, the selected Public Commercial Banks were Dutch-Bangla Bank Ltd. (DBBL) and Islami Bank Bangladesh Ltd (IBBL) and selected State-Owned Banks are Janata Bank Ltd (JBL) and Rupali Bank Ltd. (RBL). From India, the selected banks were ICICI and Axis. The study methodology was KLD Research Analytics and Correlation Coefficient of the Year on Year (YoY) change of the CSR versus profits. There were result outcomes across all these tests. The YoY comparison for ADCB from UAE shows a negative coefficient but strengthening the correlation between CSR and profitability over the five year period. The YoY comparison of ICICI for CSR % to profitability impact had weak correlation and fluctuating coefficient. The YoY comparison for Axis bank showed that the correlation between CSR expenditure and profit is largely positive and the coefficient is also significant. The comparison for PCBs DBBL and IBBL revealed that there was a positive correlation with the profitability, but the YoY CSR% to profitability change shows a weak coefficient. The comparison between the State-Owned Banks JBL and RBL shows that the YoY comparison of CSR% to profitability has a weak correlation but insignificant coefficient. In conclusion, banks should undertake ethical CSR when pursuing profitability.

Board of Directors and CSR in Banking: The Moderating Role of Bank Regulation and Investor Protection Strength

AbstractThis paper brings together research on boards of directors as the backbone of corporate governance and corporate social responsibility (CSR) practices in the banking industry. The underlying idea is that some characteristics of bank boards, in particular independence and gender diversity, may impact the CSR commitments of banks. By making use of a sample of 159 banks in nine countries during the period 2004–2010, our empirical evidence suggests that banks with more independent directors and more female members on their boards incline toward socially responsible behaviour. Our results also suggest that institutional factors play a significant role in these effects. They show that in greater regulatory and stronger investor protection environments, board independence and gender diversity have more influence on the social behaviour of banks.

SOCIO ECONOMIC STATUS AND EXPECTATION ON CORPORATE SOCIAL RESPONSIBILITY - RELATIONSHIP STUDY

The purpose of this paper is to analyze the relationship between socio economic status and customer expectation on corporate social responsibility of banks in Virudhunagar District. The researcher has applied Chi-square test to study the relationship between the socio-economic variables and their level of expectation of Corporate Social Responsibilities of banks. The Chi-square test reveals that there is no relationship between literacy level, period of transaction and category of bank and their level of expectations towards the CSR activities of banks. This study also reveals that there is a relationship between gender, age, place of residence, educational status, occupation, monthly income and type of account and their level of expectations towards the CSR activities of banks.

CORPORATE SOCIAL RESPONSIBILITY PADA INDUSTRI PERBANKAN SYARIAH DI INDONESIA

The paradigm of sustainability development developed by Bank Indonesia is in line with the principles used in corporate social responsibility (CSR). This study aims to map and analyze performance of CSR in Islamic banking industry in Indonesia. The methods of data collection using observation in annual reports with content analysis techniques. To analyze relationship between variables, in this study used data analysis tool with multiple linear regression analysis. The examine result proves that level of profitability of sharia banks significantly affect performance of CSR activities. While the size of the company and corporate governance proxied by the existence of independent commissioners did not give a significant effect on performance of Islamic banking CSR in Indonesia

Corporate Social Responsibility of Islamic Banks in Malaysia : Arising Issues

Corporate social responsibility (CSR) term has rapidly developed and is no longer a strange concept among business communities. As part of business entities and concurrently guided by Sharī‘ah principles, Islamic banks face even more expectations in performing CSR as Islamic financial institutions. On top of that, although Malaysia is at the vanguard in the development of Islamic finance especially in Islamic banking industry, there is a lack of discussion on issues pertaining CSR applications of Islamic banks. Using interview data with top management executives and supported by observations and document reviews, this study attempts to disclose arising issues regarding CSR applications of Islamic banks in Malaysia. It was found that there are significant issues that need to be addressed in order to ensure the efficiency of Islamic banks CSR applications especially regarding corporate social responsibility disclosure (CSRD), CSR department and CSR fund.

Bank employees’ engagement in corporate social responsibility initiatives at a South African retail bank

Orientation: Many firms encourage employees to undertake corporate social responsibility (CSR) projects. With any project, it is important that firm resources are committed to create valued outcomes for stakeholders.Research purpose: The study purpose was to gain insight into criteria that can practically help define the success of employee run CSR projects.Motivation for the study: CSR activities are reported in literature as creating valuable intangible and tangible assets for firms when planned as strategies to improve brand reputation, customer loyalty and future profit. This research reviews a South African retail bank that promotes CSR undertakings to employees exploring the bank’s support for employees engaged in CSR.Research design, approach and method: Two of the bank’s completed community CSR projects were identified by the bank’s senior CSR managers for this review. Qualitative interviews were undertaken with employees, bank CSR managers and project recipients. Participant interviews were transcribed into text then analysed to identify where stakeholder value diminished on these projects.Main findings: The study found that this bank’s CSR processes do not fully support the employees, detrimentally affecting the ability of the employees to optimise project outcomes.Practical or managerial implication: Because employee CSR efforts are often aligned with a firm’s value creation strategies, optimising the project management of employee CSR activities can improve the value of the outcomes achieved.Contribution or value add: Determining specific conditions that influence successful project management of employee CSR projects can help to improve the potential of CSR projects in co-creating optimised value for stakeholders.

Board gender diversity and CSR in Lebanese banks: Rhetoric or action?

This paper studies the lack of gender diversity at the board level in Lebanese banks following Corporate Social Responsibility (CSR) principles. It also addresses women’s reactions and behaviours towards this issue. The employed methodology is multi-modal and uses both quantitative and qualitative tools. The data was collected via survey and semi-structured interviews from 42 managers in 21 banks, which according to their websites, follow the CSR principles. The quantitative data revealed the relevant trends, while the qualitative data provided comprehensive explanations and in-depth understanding of the related issues. The findings of this paper shed light on the personal disappointment women interviewees felt about their lack of progress as well as their inability to assume a place on the board. They also address the contribution of the four main causes of board-level gender discrimination in Lebanese banks, namely the limitations imposed by the patriarchal culture, CEO succession planning, Human Resource (HR) diversity management practices, as well as those due to women themselves. They found that women react to these challenges by relying on their emotional intelligence. However, they tend to overestimate themselves for self-protection in the male dominated financial world. This study is not without its limitations, but it recommends further research concerning related policies and strategies of the administrative boards, legislating entities, and controlling entities, such as the Central Bank of Lebanon (Banque du Liban, BDL), in order to explicitly explore strategies that affect gender discrimination. This study creates value for banks that are genuinely interested in implementing CSR in order to benefit their corporate governance (CG) practices as well as the society at large.

International Evidence on the Relationship between Insider and Bank Ownership and CSR Performance

AbstractManuscript TypeEmpiricalResearch Question/IssueThis study examines the relationship between blockholder and bank ownership and a firm's corporate social responsibility (CSR) performance. We analyze a multinational panel data sample for the period 2003–2012.Research Findings/InsightsWe find that the degree of blockholder ownership is negatively related to CSR performance, whereas the degree of bank ownership is positively related to CSR performance. The negative (positive) relationship between blockholder (bank) ownership and CSR performance is more pronounced in firms with high ownership dispersion.Theoretical/Academic ImplicationsOur study contributes to existing literature by investigating the effects of blockholder and bank ownership on CSR performance within an international context. Prior research has predominantly examined local markets. Additionally, we identify ownership dispersion to strengthen the relationship between investors and CSR and thus provide further evidence on the factors influencing investors' CSR preferences. Conducting an instrumental variables approach supports our findings that bank ownership is positively, and blockholder ownership is negatively, related to CSR performance.Practitioner/Policy ImplicationsOur results may assist firms in understanding the demand for CSR by blockholders and bank owners. An awareness of this demand may help firms to optimize their CSR performance in line with their investors' preferences. The knowledge produced in this article could assist firms in adopting the optimal level of CSR performance. Viewed from another perspective, knowing that either blockholder or bank ownership is present allows other shareholders, for instance sustainability funds, to anticipate the long‐run equilibrium level of firm‐specific CSR performance.

Bank social responsibility and the use of money

Purpose The purpose of the present research is first to assess the financial education’s effectiveness, examining how a specific communication regarding the use of money could help new consumers from low-income families avoid insolvency. The second is to analyse the impact of this corporate social responsibility (CSR) activity on a Brazilian bank’s image. Design/methodology/approach The research used a qualitative methodology based on in-depth interviews using three advertising films, which served as an enhanced element to prompt students to evaluate the discourse of sensible use of money and credit and the bank’s image. Findings The results showed that the students are very receptive to the ideas shown by the bank advertising films. Nevertheless, the interviewees showed a certain degree of suspicion toward the initiative and intentions of the bank. The perceived corporate image was clearly ambiguous, with the financial institution showing its advertising film about the careful use of money in complete contrast to actual bank branch practices in which employees offer and encourage young students from low-income families to get loans and credit cards. The bank became more socially responsible merely to cut costs and as a consequence did not improve its image. Practical implications For CSR in banks to be real and have a positive impact on society, the authors suggest that the bank enter into a cooperation or sponsorship agreement with the federal government or any public sector institution or non-governmental organizations. The form, the arguments and the language of the bank’s financial education campaign examined in this article seemed to be capable of serving social purposes or benefiting society. Social implications Educating consumers in the conscious use of money reduces delinquency rates and increases banks’ profits while, at the same time, benefiting society economically. The bank’s positive experience in terms of financial education could help the Brazilian government and other institutions with the same purpose. The advertising campaign provides some insights for the Brazilian government financial education program to which it has given high priority (BCB, 2015). Originality/value The article expands studies on CSR in developing countries and of attitudes toward it in the emerging middle class, two issues that have received scant attention. The study reinforces Carroll and Shabana’s view (2010) that companies are becoming more socially responsible merely to cut costs and Porter and Kramer’s call that to be really strategic the action must not appear to be mitigating the very harm it has caused.

Voluntary CSR disclosure works! Evidence from Asia-Pacific banks

Purpose – The purpose of this paper is to evaluate corporate social responsibility (CSR) reporting in six large banks each from Japan, China, Australia and India over the period of 2005-2011. Design/methodology/approach – CSR and banks’ annual reports and websites were analysed using a comprehensive disclosure framework to evaluate the themes of ethical standards, extent of CSR reporting, environment, products, community, employees, supply chain management and benchmarking. Findings – Over the seven years, bank CSR disclosure improved in all four countries. Australian banks were found to have the best scores and Indian banks demonstrated maximum improvement. Despite the absence of legislative requirements or standards for CSR, this paper finds that CSR reporting continued to improve in quality and quantity in the region on a purely voluntary basis. Research limitations/implications – This study indicates that financial institutions have a commitment to CSR activities. The comparison between financial institutions in developed and developing economies suggests that the motivation for such activities is complex. A review of the studied banks suggests that strategic rather than economic drivers are an important influence. Practical implications – Asia-Pacific Governments need not mandate bank CSR reporting standards as the banks improved their CSR reporting consistently over the seven years despite the Global Financial Crisis (GFC). Originality/value – A disclosure framework index is used to assess the comprehensiveness of bank practice in relation to CSR reporting. This approach enables cross-sectional and cross-country comparisons over time and the ability to replicate and apply to other industries or sectors.

Impacts Of Globalization On Economic Growth - Evidence From Selected South Asian Countries

This exploratory study set out to understand the true value of Corporate Social Responsibility (CSR) in the banking sector. Businesses, including banks, actively participate in CSR but the question of value still persists. What does the bank receive in return for participating in CSR? Do banks get more customers as a result of their CSR programmes? Do banks have a better customer retention rate because of their CSR programme? Will customers change banks purely because they disagree with their banks CSR programme? These were some of the issues addressed but due to the small sample size, the ndings cannot be generalised. The study did not nd any signicant, positive nor negative relationship, between CSR and the bank customers; meaning the tests could not provide evidence that for instance CSR programmes should be targeted towards female customers or customers of a certain age or income bracket. More importantly 80% of the respondents did not consider CSR an issue that was important enough to aect their choice of banks. They will not switch banks purely based on a bank's CSR programme. Understandably they were more interested in bank fees and interest rates. These issues directly aected their reason for choosing a particular bank. So the question of why banks, and presumably other businesses, still participate and spend a lot of money on CSR when their customers do not seem to place much value on it, still persists. The ndings suggest that a much larger study on the topic is warranted. It will aid banks and other businesses decide on their role in corporate social responsibility. Whose needs are being satised

Corporate Social Responsibility and Financial Performance: A Case Study of Jamuna Bank Limited, Bangladesh

Banking is a business which runs on the confidence and the trust of people that enables the bank to mobilize funds from various sources. The profitability of a bank always depends on the efficient management of fund and exploring the genuine avenues in which its resources are invested to produce the maximum income. The purpose of the study is to discover the impact of Corporate Social Responsibility (CSR) expenditure on the profitability of Jamuna Bank Ltd (JBL) which indicates the fundamental picture of the overall banking industry of Bangladesh. JBL is one of the non-government commercial banks in Bangladesh, for this study purpose CSR expenditure is taken as the independent variable and profit after tax (PAT) as the dependent variable. Required data are collected from the annual reports of JBL and Bangladesh Bank CSR review for the year 2007 to 2012 and analyzed using Ordinary least squares (OLS) model and tested the hypothesis through the student’s t test. The results show that there is no significant impact of CSR on PAT and therefore recommends the bank to critically evaluate its existing policy on performing CSR activities to increase profitability. For academic and industry discourse it is suggested that further study should be conducted to establish the real value, in monetary terms, how much CSR contribute to the organization’s profitability.

The Mediating Effect of Financial Performance on the Relationship between Shariah Supervisory Board Effectiveness, Intellectual Capital and Corporate Social Responsibility, of Islamic Banks in Gulf Cooperation Council Countries

The objective of this study was to determine the influence of Shariah Supervisory Board Effectiveness (SSBE) and Intellectual Capital (IC) on Corporate Social Responsibility (CSR) among 36 Islamic banks in Gulf Cooperation Council Countries (GCC) over the period of 2007-2011. Additionally, this study was aimed to identify the significance of financial performance (ROA, ROE) as mediator in the relationship between Shariah Supervisory Board Effectiveness (SSBE), Intellectual Capital (IC) and Corporate Social Responsibility (CSR). For the purpose of data analysis and hypotheses testing, several statistical methods such as multiple regression analysis were utilized to understand the variables. The results of this study reported that SSBE, Capital Employee Efficiency (CEE) and Structure Capital Efficiency (SCE) of Islamic banks positively influenced CSR. However, Human Capital Efficiency (HCE) did not influence CSR. The results of hierarchical multiple regression indicate that financial performance (ROA, ROE) was found to be a significant mediating factor for the relationship between SSBE, CEE, and SCE, and CSR in Islamic banks. The relationship between SSBE, IC, financial performance (ROA, ROE) and CSR suggested that it may be beneficial to the management of Islamic banks to increase CSR as discussed. Limitations and recommendations for future research were also highlighted.

FAKTOR-FAKTOR YANG MEMPENGARUHI PENGUNGKAPAN CORPORATE SOCIAL RESPONSIBILITY (CSR) PADA PERBANKAN SYARIAH

Objective of this study is to analyze how the implementation of Corporate Social Responsibility by using Index Islamic Social Reporting (ISR) on Islamic Banking in Indonesia and to examine how the influence of ShariaSipervisory Board (Dewan Pengawas Syariah – DPS), DPS conference, company size, profitability, leverage, andcommissioners on the disclosure of Corporate Social Responsibility (CSR) in Islamic banking in Indonesia.The method used is quantitative analysis. This study population is all Islamic banking in Indonesia during the period2011-2014. Samples are selected using purposive sampling method. Data analysis method used is multipleregression analysis. This research use secondary data from islamic banking annual report. Results of this study areall Islamic banking company has been doing CSR, size of the Sharia Supervisory Board, Sharia Supervisory Boardconference, Company Size and Leverage does not affect the disclosure of CSR in Islamic banking, while profitabilityhas a negative influence and board director has positive affect on disclosure CSR

Credit Markets with Ethical Banks and Motivated Borrowers

We investigate the corporate social responsibility of banks. Lenders offer loans to standard and motivated borrowers who undertake either standard or ethical projects. Standard banks have no restriction on the types of projects for which they can provide a loan. Ethical banks, instead, commit to financing only ethical projects, which have social profitability but lower expected revenues. Motivated borrowers are keen to invest in ethical projects and to deal with ethical banks. When they are active, ethical banks increase social welfare because the matching of ethical lenders with motivated borrowers reduces the frictions caused by the agency issue.

Corporate Social Responsibility In Islamic Banking Institutions In Aceh: Analysis Of Criteria And Perception

The concept of corporate social responsibility (CSR) emerged in the West in 1970s’ and had become an emerging issue of discussion among the researchers. The concept of CRS was initiated on humanitarian grounds which can be traced back to human norms, and culture in the West. It becomes questionable when the same concept, based on western paradigm, is adopted and implemented for the Islamic banking institutions. Islamic banks are assumed to follow their own worldview concept of welfare rather to rely on conventional CRS concept. This paper attempts to identify the alternate concept of CSR in the Islamic perspective. Notwithstanding, the alternate concept of CRS for the Islamic banking institutions, the study also investigates customers’ perceptions of the Islamic Banks in Aceh towards CSR. The study is divided into two phases. The first phase of the study is theoretical and based on library materials. Content analysis method has been used to investigate the material and deduce results. The second phase is based on interviews with experts and 400 customers’ responses about their perceptions regarding CSR in Islamic banking Institutions (IBIs) in Aceh. The findings of the study can be summarized as: there is no direct verse or tradition of the holy prophet regarding CSR however, there are plenty verses which show that individuals and institutions are responsible for any damage they caused to the society or environment. Findings of the study suggest that the concept of CSR is different from traditional paradigm. The CSR concept in Islam is practiced in three areas of responsibility; first, responsibility to God second, responsibility towards the people, and third, responsibility to the environment. These three levels are supported by the basic principles of monotheism (tauhid), the caliphate (khalifah), justice, brotherhood (ukhuwwah) and maslahah. The study used six criteria based on 34 items to measure CSR performance of the IBIs. These are namely; Syariah compliance, equality, working responsibility, the guarantee of prosperity, the guarantee of environmental sustainability and charity for preservation of virtue. Findings of the second phase of the study indicate that the customers perceptions regarding the Syari‘ah banking CSR practices in Aceh are high. The customers make Syari‘ah compliance criteria as the main criteria in the selection of the IBIs. DOI: 10.5901/jesr.2014.v4n2p390

On the drivers of corporate social responsibility in banks: evidence from an ethical rating model

The purpose of our paper is the construction of a multidimensional ethical rating model, based on many items that represent the most significant Corporate Social Responsibility drivers of the banks. The items considered have been drawn from literature and from corporate reporting and websites of banks and then subjected to content analysis. The model, applied to a sample of European banks, was divided into four areas of analysis (Disclosure; Organization and Management; Offer of Socially Responsible Instruments; International Agreements, Certifications and Indexes) to identify the most frequent ethical conducts and the ones that require improvement measures. Our research highlights that banks pay more attention to the offer of socially responsible instruments and organization and management issues. On the contrary, the banks examined could enhance their socially responsible approach by reinforcing disclosure on Corporate Social Responsibility. In particular, there is a modest orientation towards disclosure on the basis of the triple bottom-line approach. Finally, as for international agreements, certifications and indexes, improvement actions are still needed: there are still many international principles which have not yet been adhered to and an increase in requests for more ethical/quality certifications and inclusion in reputational ratings would be desirable.

Social Reporting By Indian Banks and Foreign Banks- A Comparative Analysis

The study provides the level of corporate social responsibility disclosure of the Indian Banking Sector. The purpose of this paper is to investigate the corporate social responsibility (CSR) reporting information of Indian Banks in public as well as private sector as well as foreign banks operating in India and explores the potential effects of financial characteristics on CSR disclosure.The annual reports of all the banks for the year 2009-2010 are examined to analyse the banks' CSR reporting practice. An index comprising of 27 indicators is prepared and each bank's annual report is analysed for the items under the different categories. If a banking company discloses an item of information in the annual report, then 1 will be awarded and if the item is not disclosed then 0 will be awarded. Thereafter each bank's corporate social responsibility reporting index (CSRRI) is measured. It also considers the impact of three financial characteristics viz. profitability, gearing and size. The multiple regressions were used to measure the impact of financial characteristics on banks' CSR reporting initiatives. The results of the study demonstrate that though voluntary, overall CSR reporting by Indian Banks are rather moderate. The results also displayed no significant relationship between gearing and CSR reporting in Indian Banks. Profitability and size of the bank have been found to have significant impact on the CSR reporting. Whereas in case of foreign banks all the factors have a role to play. The study is the primary to investigate CSR reporting practices coupled with the impact of financial characteristics in the specific context of banking sectors in the developing country such as India.

CSR in banking in emerging markets – stakeholder perspective

Subject area This case considers the attitudes of stakeholders in a risk management challenge of a major foreign bank operating in an emerging market country in the Mediterranean region. The case provides insights into the task facing an international organisation trying to operate in a sociallyresponsible way in a developing economy, where operating conditions are quite different from the head office environment. Study level/applicability The case is designed for MBA and MSc students studying corporate social responsibility (CSR), international business, emerging markets, country risk (and related subjects). Case overview The case discusses the implications of the actions of a negligent/possibly dishonest lawyer in undermining an international bank's risk management systems. The lawyer did not register the sale of a house, causing it to be repossessed by the bank, thinking that the property still belonged to the vendor, who had allowed a large overdraft to accumulate. By chance, the repossession of the house and subsequent forced judicial sale was averted, but to ensure undisputed ownership the real owner of the house was left with heavy legal bills. There were several players possibly at fault here: the lawyer; the bank; the vendor; the local courts; and the real estate agents (who recommended the dishonest lawyer to the purchaser in the first place). Expected learning outcomes These include a clearer understanding of the different stakeholder perspectives, and a greater appreciation of the challenges of doing business for aWestern multinational company now operating in emerging markets worldwide. Social implications The concept of CSR in emerging markets is very different from the way CSR is viewed in more developed ones – posing several challenges for international companies (especially banks) in the way they operate. Making assumptions of ethical ways of doing business can cause great problems, as discussed in this case – especially in the way that different stakeholders are impacted. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.