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This paper try to analyse Corporate Social Responsibilities (CSR) disclosure activities in banking industries. It only focus on the CSR disclosure in three developing countries such as India, Bangladesh and Lebanon. This study using a secondary data by analysing results of past studies done by other reseachers in the CSR disclosures among banking in India, Bangladesh and Lebanon.
Recent corporate failure and financial crises has led to increasing trend in CSR disclosure (Menassa, 2010). Stakeholders of banks nowadays have made an increasingly demand towards the information on social and environmental performance make CSR become an issue in banking industry (Achua, 2008).
CSR disclosure is one way of communicating the social and environmental responsibilities carried out by any corporation during the financial year ended towards the stakeholders (Menassa, 2010). It includes term as corporate responsibility, corporate citizenship and corporate social performance (wikipedia, 2010). It is related to the relationship between the corporate sector and the society. Using CSR disclosure, corporation may disclose the effect of its business activities to the various stakeholders such as employees, consumers, environment and communities. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large." (unisa, 2010).
CSR is another important tools for users of financial statement to evaluate whether companies is doing good or not (Narwal, 2007). CSR is now becoming part of companies important management srategy (Ragodoo, 2009). Good CSR management is important to make sure long-term business success (Khan, Halabi and Samy, 2009; Narwal, 2007; Decker, 2004).
BENEFITS OF CSR
CSR is important for two reasons which include market and socially related. CSR is necessary to promote market efficientcy as well as the social connection (Khan, Halabi and Samy, 2009). CSR is used by companies to increase the attention towards the stakeholders of the company. Stakeholders can be describe as whoever affected by the companies' activities or whoever influence the companies' performance (Zappi, 2007). It means that society and corporates have to be present for a jointly useful relationship (Narwal, 2007). "Business is expected to create wealth, supply market, generate employment, innovate and produce a sufficient surplus to sustain its activities and improve its competitiveness while contributing to the maintenance of the community in which it operates. Society is expected to provide an environment in which business can develop and prosper, allowing investors to earn returns while ensuring that the stakeholder can enjoy the benefits of their involvement without fear of arbitrary and unjust action" (Narwal, 2007, pp. 49).
CSR disclosures by bank shows an Increase in performance of banks (Narwal, 2007). CSR disclosure is positively influence the banks customers' perception towards the quality of services provided (Poolthong and Mandhachitara, 2009). Thus, it create the goodwill, social image and trust by the customer towards the bank (Poolthong and Mandhachitara, 2009; Narwal, 2007). Increse in trust is then contributed toward an increase in the services consumed by customers and benefit for business expansion (Poolthong and Mandhachitara, 2009; Narwal, 2007).
AREARS OF DISCLOSURE
Most companies favor to disclose more towards employees and its product or service in their CSR disclosure. This is due to its direct contribution towards profit of the companies (Menassa, 2010; Belal and Momin, 2009; Khan, Halabi and Samy, 2009). There is no or only limited disclosure made on the environmental issues (Menassa, 2010; Belal and Momin, 2009; Khan, Halabi and Samy, 2009).
Table 1: Summary of CSR disclosures by three developing countries
Market Place/ Product
Employee/ Human Resource
Fund for disable
planting trees (only 1 bank from 20 banks)
Second emphasis (20 banks)
Quality of products
Highest emphasis (all 24 banks)
Table 1 summarises all activities related to social and envonmental carried out by banks in three developing countries. The results shows that companies pays greater attention towards their employees and human resource disclosure. It is due to employees are the important stakeholders in ensuring their companies run smoothly and generating income (Menassa, 2010; Khan, Halabi and Samy, 2009). Most of the bank disclose on the training given to their employees in order to increase the services quality. There is no evidence on the Indian banking that they make disclosure about the employees and human resource (Narwal, 2007).
Another important areas of disclosure is on the services itself. Study done by 8 reveal that 20 over 24 banks in Lebanon made disclosure on thir services in terms of quality and innovation. It is being put as second ranking of importance in CSR disclosure after the human resource. Example of disclosure made are on customer compalint management system, servives provided to disable customers (Menassa, 2010).
All countries have made disclosures in term of social responsibilities (Menassa, 2010; Khan, Halabi and Samy, 2009; Narwal, 2007). The famous social contribution is organising blood donation. In India, it focus more towards family planning, women development and literacy program. this is due to India is starting to implement a "balance growth" whereby previously women is stop from being educated (Narwal, 2007). Furthermore, since India have lot of health issue including AIDS, thus it is important for them to have a family planning activities (Narwal, 2007).
All three studies done in India, Bangladesh and Lebanon reveal that very little information is made by banks on the environmental issues (Menassa, 2010; Khan, Halabi and Samy, 2009; Narwal, 2007). This is might be due to very little connection between banks and environment. The reported activities are on tree plantation and reforestration. Only 1 out of 20 banks in Bangladesh made disclosure on the environmental issues whereas 4 out of 24 banks in Lebanon make such disclosure (Menassa, 2010; Khan, Halabi and Samy, 2009).
The study also find out whether there is qualitative information disclose on the CSR disclosure. There were evidence that 60% of banks in India disclose their budget in quantitative amount (Narwal, 2007). There were also 2 banks in bangladesh made quantitative disclosure (Khan, Halabi and Samy, 2009). However, there is no evidence showing that banks in Lebanon make a quantitative disclosure.
Most of banks made the disclosure in the chairman statement (Menassa, 2010; Khan, Halabi and Samy, 2009). There were also disclosure made the directors report and notes to the financial statement (Khan, Halabi and Samy, 2009). Some of Lebanon banks also made CSR disclosure at the beginning of the annual report (Menassa, 2010). However, there is no evidence that banks made CSR disclosure in a separe section.
Users of financial statement todays require further information to be disclosed besides the financial information. Non-financial information becoming an important aspect for users. One of the useful non-financial information is the CSR activities. CSR disclosure is important to increase performace of the comapany including banking industries. It help to increase image of the company. For banking industries, environmental issues are not the major concern. This is due to little direct attachment between banking institution with the environment.