In 2008 the SOCBs were corporatized with the hope that they would function well if they are allowed to work independently but we see that their condition did not improve rather deteriorated further. In spite of being a least developed country, Bangladesh is running its financial sector with sixty (60) banks among them fifty six (56) scheduled and four (4) nonscheduled banks. There is strong relation between economic development and corporate governance, based on experiences in many countries, sectors, and business organizations (from state- owned enterprises to publicly listed companies) (Claessens S. and Yurtoglu B.2012). The four SOCBs have a great contribution in shaping the overall economy of Bangladesh. As these banks are owned by the state, political interference is a common phenomenon in Bangladesh, in case of major decisions taken in SOCBs. Ultimately, the people of the state bear the consequences of different scams, embezzlements, corruptions, mismanagement and irregularities in SOCBs in Bangladesh. Recent scam in banking sector especially in state owned banks is the result of lack of proper corporate governance in banking sectors. So it is essential to know the status of corporate governance compliance and performance of SOCBs in Bangladesh so that necessary steps can be taken to avoid such unexpected situation and dissatisfactory performance.
In the time of natural disasters almost every bank come forward to help the victims. Though the banks are contributing in these sectors noticeably, but still the bank can express themselves to more help in each of these sectors such as if the banks in collaboration through Bangladesh Bank donate together to establish some educational institution in district and sub- district level with good facilities it will help the people of society to be educated and it will also create great job opportunities for many, which ultimately increase the living standard and economic power of the nation. DBBL, Prime Bank, Janata Bank, IBBL have great contribution in the educational side of the country. Other banks should also contribute heavily in this sector. Also banks should think about more facilities in the health sector. The banks should donate more to this sector in collecting modern medical instruments and facilities from abroad. Banks should go forward and arrange good treatment facilities for the rural people. The rural people of Bangladesh are not so concern about health. Banks can arrange campaigns and meetings with those people to make them concern. Though DBBL has a great contribution for the treatment of cleft lips and cleft palate and also has various medical sides. Janata Bank also has great spending in the health sector. But if all the Banks come forward and perform actively and more dedicatedly then Bangladesh can be a health concern country which can make the great image of the country. Dutch Bangla Bank Limited has greatly contributed to all the side including Prime Minister Relief fund, sponsoring education, poverty alleviation and women empowerment. Janata Bank also contributed heavily for the help of disaster victims, developing the health sector, reducing environmental pollutions. IFIC Bank has great contribution in sponsoring the sports and cultural events. But IFIC should work more for women empowerment. Islami Bank Bangladesh Ltd have significant contribution in Women Empowerment. BASIC Bank Limited provided assistance to the new entrepreneurs and this Bank also have contribution to education and health sector. BASIC Bank should more concern to develop health sector. Arab Bangladesh Bank donated big amount in health sector. But AB Bank should also concern in other sectors. AB Bank have no contribution to education, women empowerment but at the other hand BRAC Bank greatly contributed to education and women empowerment. So AB Bank should express their social services for the students and for the women empowerment. Other bank in the table like Pubali Bank has no social activities in education, health, poverty alleviation. Pubali Bank should give concentration to these sectors.
Banks are the most dominant service industry globally that can contribute towards social and environmental sustainability. As stated by Douglas, Doris, and Johnson (2004), financial institutions such as banks can play a “catalytic role” in changing the corporate behaviour of other industries towards sustainability management and disclosure. Unfortunately, banks lag in CSD research where Islamic banks are highly ignored and neglected (Haniffa & Hudaib, 2004), even though the role of banks in sustainable socioeconomic development is globally recognized (UNEP-FI, 2006). Along with the traditional banks, Islamic banks also play a pivotal role in sustainable development throughout the world (Haniffa & Hudaib, 2004). In respect of Bangladesh, there are various conventional and Islamic banks that render substantial voluntary services for the socioeconomic development of the country (Sobhani et al. 2009b). The unique social welfare services of different banks in a comparative mode provide an essential niche area for intensive research that has not been studied by any researcher. Therefore, a comparison of the CSD practices between two case banks in Bangladesh is a timely attempt to fill in the gap.
This paper explores how private commercial bankspracticesCorporate Social Responsibility (CSR) in Bangladesh in conserved the case of Southeast Bank Ltd.. In keeping with global movement, CSR is being seen as the source of new competition edge for the banking sectors of Bangladesh. Banks’ of Bangladeshpractices CSR not only to improve community relations but also as source of significant commercial benefit. Southeast Bank Ltd. practices CSR under the rules and regulation of Bangladesh Bank. The study based on annual report of 2012 of Southeast Bank Ltd. This study shows that Southeast Bank expenses BDT36.85 million in the year 2012 at the area of education, health, community development, environmental issue, art and culture, sports etc.. Nevertheless, bank expenses highest amount in education sector through scholarship program in Bangladesh whereby school, college and university education tuition and expenses have fully paid for unconditionally. The study can help banking manger’s understand what should be done for the benefits of customers and the community for sustainability.
spending and allocation of separate funds for this specific purpose. The banks also created maximum value from its activities and developed strategies to effectively implement the CSR activities for the social development of the society. Both banks follow a system of periodical monitoring and reporting to the Board of Directors regarding spending and utilization of allocated budget for CSR. The main CSR areas covered by both of the banks are Education, Social welfare, Health, Disaster Relief, Sports & Culture and Environment. But the total spending of CSR activities of Conventional banks is wider than Islamic banks in Bangladesh. In most of those disclosures there were little differences between Islamic and Conventional banking in Bangladesh. Some other research shows that there is great influence of Islam on CSR in Islamic Banking. This also raises the contemplation that either other spiritual also play an important role in CSR. Hence from the complete research work conclusion made that CSR introduced in Islamic banking earlier than Conventional banking. Because CSR practices are mostly related with the Islamic terms like social justice & responsibility, inference of zakat, microfinance schemes and adopting ethical values of Islam. But now Conventional banking introduced CSR practices in their institutions.
This study aimed to depict the disclosure of corporate social responsibility (CSR) practices of commercial banks in Bangladesh. The sample included annual reports for the year 2018 of twenty-eight commercial banks out of thirty commercial banks listed on the Dhaka Stock Exchange (DSE) as of June 30, 2019. The data were analyzed using the content analysis technique. The findings indicate that commercial banks have made CSR contributions to eight sectors and disclosed CSR information through thirteen sections of the annual report covering a mixture of four tools. Moreover, although most of the commercial banks have disclosed some quantitative data, the aggregate amount of qualitative and mixed types of CSR disclosure is higher than that of purely quantitative ones. Additionally, all commercial banks have utilized ‘other expense' section for CSR expenditures in the body of ‘financial statements', but most of the commercial banks have ignored ‘corporate social responsibility' sub-head and preferred ‘Donation' or ‘Subscription and Donation' sub-heads in the ‘notes to financial statements'. The overall finding indicates that the CSR disclosure issue in Bangladesh has not received sufficient attention from the commercial banks. This study, therefore, recommends that CSR reporting should be formalized and regulated to enhance stakeholders' confidence in an entity's CSR practice.
1976. Before independence, a stock exchange had been established in Dhaka, the Dhaka Stock Exchange (DSE) in 1954 as a corporate body under the Companies Act 1913. However, it operated on a very small scale in the first 25 years of existence. The DSE did not develop under the Pakistani regime during 1947-71. After the emergence of Bangladesh in 1971, the DSE market ceased to exist due to the government policy of nationalizing all the major industries of the country. In 1976, the DSE was reactivated with nine listed companies due to the change in the attitude of the then government towards the development of the public sector and promotion of a market economy.One of the features of the capital market in Bangladesh is the concentration of share ownership- a few shareholders’ account for substantial part of total shareholders’ value. At present, the capital market in Bangladesh consists mainly of the DSE, three government development financial institutions (DFIs), namely the Bangladesh Shilpa Rin Shangstha (BSRS), the Bangladesh Shilpa Bank (BSB) and the Investment Corporation of Bangladesh (ICB) and a few newly created private Investment Banks (Nicholls and Ahmed, 1995). The Companies Act, 1994 and the Securities and Exchange rules, 1987 are the most important laws which regulate the financial reports. As already noted the financial reporting practice of listed companies in Bangladesh made is mainly based on the legal requirements of the Companies Act, 1994 and the Securities and Exchange Rules, 1987. The Security and Exchange Rules, 1987 contain the detailed provisions regarding the contents of balance sheet, profit and loss account, and auditors’ report. Proper issuance of securities, protections of the interest of the investors and promotion of development, regulation of the capital and securities market are the basic strategies of the Securities and Exchange Commission. These rules have increased the disclosure requirements of the listed companies in Bangladesh.
The annual reports of the banks selected were examined subsequent to downloading from the respective banks official website. The official web addresses of all sample banks were collected from the ‘companies profile section’ maintained by DSE. Consequently, all the sample banks’ annual reports were examined in the current study. The study made a thorough investigation of the different sections of the annual reports such as vision, mission and goal statement, chairman’s message, directors’ section, financial statements, operating review, corporate governance report and other parts enclosing miscellaneous section not covered by any other section. While the banks may exercise other medium of communication through for exhibiting CSR reporting such as internet, newspaper and other media, this study concentrate on published annual reports of sample banks. Furthermore, a reason for choosing annual reports is that they are considered to be the most widespread and accepted document produced by Bangladeshi banks on a regular basis. These 25 banks represent around 85% of the total private commercial banks in Bangladesh. To identify the types of social information are disclosed on a company’s annual report, a Social Reporting Disclosure Index (SRDI) of 34 items (Annexure - Table A-2) was developed. With the help of literature review 34 items of SRDI were categorized into 4 major aspects – 1) Background/General Corporate Information; 2) Directors Information; 3) Employees Information; 4) Community and other services. The disclosure category includes the following variables: 1) Background/General Corporate Information (8 items) contained the Brief History of the Company, Structure/Chart/Description of corporate structure, General Description of business activities, Official address/registered address/address for correspondence, Web/e-mail address of the company
Many prior studies such as Chiong et al. (1993), Gray et al. (1995), Carroll (1999), Cetindamar and Husoy (2007), Holder-Webb et al. (2009), and Kamal et al. (2012) have reported that the initiatives of CSR by the firms are generated from the economic theory, political theory, agency theory, stakeholder theory, legitimacy theory and ethical theory. In developed countries, different private pressure group and government regulatory bodies enforce the laws and guidelines of corporate social responsibility to intensify the CSR practices of firms. Reporting of CSR information is mandatory in USA. In Bangladesh, firms are doing CSR in this green field slightly and reporting it voluntarily from the social point of view. Recently the central bank of Bangladesh, Bangladesh Bank has newly established a department named Green Banking & CSR Department (GBCSRD) that is designed for issuing Green Banking Guidelines and CSR activities of banks operating in Bangladesh for giving an outline of social activities for banks only. On the other hand, in 1st July, 2010 the Ministry of Finance, Internal Resources Division of the People’s Republic of Bangladesh has issued SRO - 270 with certain directives in respect of the CSR. As per SRO, a corporate entity is entitled to have a tax rebate in the form of waiver of tax @ 10% on the amount spent for CSR after fulfilling some specified conditions in respect of CSR. The prescribed scope of CSR activities includes 22 areas under economic field, environmental field and social development field.
Voluntarydisclosure in the annual report indicates “information primarily outside of the financial statement s that are not explicitly required by accounting rules or standards.” It refers to additional information delivered by firms along with the mandatory information with a view to reducing the information asymmetry between insiders and outsiders; we must have the case where the former discloses voluntary information to the latter. This is essentially going to contribute to the alleviation of problems of adverse selection and of moral hazard. Voluntarydisclosure is regarded as an external mechanism for the control of the insiders, a protection of the shareholders, and a decrease of the agency costs resulting from the asymmetry of information between the insiders and the outsiders (Wang et al., 2008). Giving this crucial role of voluntarycorporate reporting policy, a considerable research area has been developed in order to identify factors that have the potential of affecting corporatevoluntarydisclosurepractices in both emerging and developed markets. Although many factors have been identifies, the empirical evidence is rather mixed. Voluntarydisclosure in the annual reports and in other information media has been one of the rapidly growing research areas in corporate arena. In this, several factors have played important roles. Among them are development of communication tools, stakeholders’ need for more transparency, accountability, and corporate governance practices (Bleck and Liu, 2007).
Previous studies examine the extent agency problem brought in the information asymmetry between managers and shareholders. Hence, there is a strong demand for corporatedisclosure and financial reporting (Healy and Palepu, 2001). By disclosing more information the agency cost of a firm is also expected to be reduced. In this regard, various studies have examined different determinants of corporatevoluntarydisclosurepractices. Most of the studies focus on finding association between firm characteristic variables such as, ownership characteristics, firm size, profitability, leverage, liquidity, and age of firm and voluntarydisclosure. For instance, Haniffa and Cooke, (2002), Ho and Wong (2001) and Chen and Jaggi, (2000), in Barako et al, (2006), Hossain and Reaz (2007), Akhtaruddin et al (2009), and Hossain (2008) in Nandi and Ghosh, (2013) and Hasan et al (2013).
Malaysia is increasing both in terms of amount of the disclosure and the number of participating companies. Nazli et al. (2007) examine the influence of ownership structure on corporate social responsibility (CSR) disclosure in Malaysian company annual reports (CARs). Their study uses a CSR disclosure checklist to measure the extent of CSR disclosure in annual reports and a multiple regression analysis to examine the association between ownership structure and the extent of CSR disclosure in annual reports. They find that, even among the larger and actively traded stocks in Malaysia, there is considerable variability in the amount of social activities disclosed in corporate annual reports. Results from multiple regression analysis show that, consistent with expectations, companies in which the directors hold a higher proportion of equity shares (owner-managed companies) disclosed significantly less CSR information, while companies in which the government is a substantial shareholder disclosed significantly more CSR information in their annual reports (Nazli et al., 2007). Abdullah et al. try to determine whether board independence and ownership have any influence on the decision on CSR disclosure. Multiple regression and logistic regression analysis are employed to test the hypotheses in their study. They find that family owned firms are negatively associated with the level and the quality of CSR disclosure. One of the major findings of their study is the ineffectiveness of the board of directors in ensuring firms to discharge its social responsibility. Hossain and Reaz (2007) report the results of an empirical investigation of the extent of voluntarydisclosure by 38 listed banking companies in India. They also report the results of the association between company specific characteristics and voluntarydisclosure of the sample companies. They say that Indian banks are disclosing a considerable amount of voluntary information. Their findings also indicate that size and assets-in-place are significant and other variables such as age, diversification, board composition, multiple exchange listing and complexity of business are insignificant in explaining the level of disclosure.
As on June 30, 2012 total listed securities of Dhaka Stock Exchange (DSE) were 511, of which 273 were securities (3 corporate bonds, 8 debentures, 41 mutual funds, & 221 treasury bonds) and 238 were companies. Again, 30 companies were banks, 22 were financial institutions and 45 were insurance companies out of 238 listed companies. Annual reports of 68 listed companies of 2010-2011 out of 141 listed non financial companies were taken as sample in the current study. The relevant data were collected through the survey of financial statements of annual report for the year 2010-2011 of each firm of the sample companies. The relevant pages of the annual report were statement of income (for revenue, net income), statement of cash flow (cash flow from operation), statement of financial position (for accounts receivable, total assets), and schedule of fixed assets (for gross value of fixed assets).
In addition to this there is lack of enforcement by government safety agencies and lack of implementation of local labour laws. For example, within Bangladesh, there are a number of rules and regulations (such as Factories Act, 1965; Industrial Relations Ordinance, 1969; Employment of Labour (Standing Orders) Act, 1965; Payment of Wages Act, 1936; Environmental Protection Act, 1995 and Workmen Compensation Act, 1923), and most of these were inherited from the British colonial regime (Belal & Roberts, 2010). These rules and regulations are supposed to control the social and environmental behaviour of the companies operating in Bangladesh. However, they are routinely ﬂouted due to the lack of enforcement by the relevant agencies, which appear to be corrupt, weak and ineffective (Belal & Roberts, 2010). Khan (2012) also argues that systematic flouting of safety norms and regulations has turned the country's garments factories into veritable death traps. Brown (2011) states that the international brands are also at least partially responsible for such fire accidents, as their ‘iron triangle’ of lowest possible prices, highest possible quality and fastest possible delivery might be a cause. However, whatever the reason, fire accidents are a common phenomenon in the garments industry of Bangladesh, and international brands are starting to take this issue seriously. For example, after the most devastating fire accident in the history of Bangladesh’s garments industry in November, 2012, in Tazreen Fashions Ltd, a sourcing factory of Wal-Mart, Wal- Mart took the initiative to improve fire safety education and training in Bangladesh (Wal-Mart, 2012).
It has been suggested by previous literature that there is a positive link between the levels of disclosure in relation to firm value. However, this association continues to be vague whether rises in information can assurance an enhanced market valuation of the firm for MTBV and ROA or not. Hence, the possible impact of risk disclosure on firm value is still an open empirical question particularly for banks in emerging markets. This study fills this gap in the literature by providing a direct analysis of the association between risk disclosure and firm value based on two different measures namely market to book value at the end of the year and profitability (MTBV and ROA). The first measure is a market based measure and the second is an accounting based measure. This study focus is on banks in an emerging market context which offers a unique empirical setting which permits for a clearer and richer picture between their levels of voluntary risk disclosure and banks market valuation from well-developed countries. This investigation contributes to the literature by demonstrating that corporate risk disclosure is essential for efficient firm value. This proposes that policymakers, accounting and regulatory institutions such as SAMA, SOCOPA and the CMA might earnestly contemplate the quantity, quality and comprehensiveness of risk materials when endeavouring to facilitate capital market efficiency for Saudi listed bank by introducing a new form of risk disclosure’ measures. Prior economic consequences studies tend to concentrate on the cost of equity and remain silent in regards to the valuation of firms (Dhaliwal et al., 2011). The findings of this investigation produce some awareness to help directors who attempt to increase the market value of their banks. The evidences of this investigation on the influence of risk disclosure in relation to firm value contribute to previous disclosure and risk disclosure literature by advancing the association between the two variables, which states that different proxies for firm value may have different effects on the level of risk disclosure.
Contextually, scholars in Nigeria have examined factors associated with voluntarydisclosure practice of listed firms (Uchenna & Bwala, 2013; Damagum & Chima, 2013; Adelopo, 2011). These studies however, focused on firm characteristics such as firm’s size, board size, profitability and leverage with no focus on internal practices such as organizational culture. Additionally, there is documentary evidence to suggest that organizational culture influences voluntarydisclosurepractices of firms in the United Arab Emirate (see Elkelish & Hassan, 2014. In the Nigeria context, such evidence seems to be elusive in the disclosure literature. This study, therefore, seeks to contribute to knowledge by empirically examine the relationship between organizational culture and voluntarydisclosure. The study also extents the debate on the effect of culture on corporatedisclosure to organizational level rather than looking at national culture as it is the case with most prior studies in this area (see Akhtaruddin & Rouf, 2012; Qu & Leung, 2006; Hannifa & Cooke, 2002; Gray, 1988).
In this paper, we examine voluntary CG disclosures in South Africa (SA). In line with global developments, SA has experienced significant CG reforms, which can be specifically dated back to the collapse of Apartheid in 1994. In fact, SA was the first developing country to introduce a code of good governance in the form of the 1994 and 2002 King Reports (Aguilera and Cuervo-Cazurra, 2009). As will be discussed further, and distinct from those of other Anglo-American countries, the King Reports explicitly require firms to go beyond the financial and regulatory aspects of CG by taking into account the interests of a wide range of stakeholders, such as local communities, employees and customers (King Report, 2002; West, 2009). Similar to other Anglo- American countries, the King Reports adopt a UK-style ‘comply or explain’ compliance and disclosure regime. However, critical concerns (Kakabadse and Korac-Kakabadse, 2002; Andreasson, 2010) have been raised as to whether a voluntary compliance and disclosure regime can be effective in improving governance practices, given the nature of its corporate context.
Our sample is based on 494 non-financial and non-utility corporations listed on the national stock exchanges of five MENA countries namely, Egypt, Jordan, Oman, Saudi Arabia, and United Arab of Emirates at the end of 2014. We exclude financials and utilities because they are subject to different regulations and have different capital structures, which may affect their disclosure and CG practices (Ntim and Soobaroyen, 2013; Elmagrhi et al., 2016). We collected data relating to CG attributes and CG disclosure by hand from the annual financial reports over the period 2009 to 2014. Because traditional manual content analysis consumes a considerable amount of time and effort, and in line with similar past disclosure studies (Eng and Mak, 2003; Barako et al., 2006; Donnelly and Malcahy, 2008; Ahmed et al., 2017; Anifowose et al., 2017), we collected data on 600 firm year observations from 100 corporations employing the widely used stratified sampling technique based on firm size and industry in each country, as illustrated in Table 1. Noticeably, our sample is much larger than most past accounting and disclosure studies that have been conducted in emerging economies that have employed similar stratified sampling techniques (Barako et al., 2006; Ahmed et al., 2017; Anifowose et al., 2017). Thus, our sampling approach and data arguably constitute a discernible improvement on existing studies, including being distinctively: (i) cross-country; and (ii) longitudinal in nature. Data on board characteristics and shareholding structures were manually collected from firms’ annual reports and websites of sampled countries’ capital markets. Financial and accounting variables were collected from DataStream database.
In Nigeria, CSRD in annual reports is not a mandatory process, hence acting in a socially responsible manner is not necessarily guaranteed. Despite this voluntary regime, it has been observed that some listed companies in Nigeria have decided to engage in CSR activities and disclose this in their annual report. It is therefore imperative to examine the effect, if any, of CSRD on the performance of companies in Nigeria. In addition to the voluntary system, Nigeria, like most developing countries, is plagued with weak institutions, poor governance practices, weak enforcement agencies and corrupt practices (Adegbite, 2015, Amaeshi et al., 2016; Chijoke-Mgbame and Mgbame, 2018). These shortcomings in the system no doubt provide an enabling environment for firms not to engage in CSR activities and also not to disclose the same in any format. Nonetheless, some companies have decided not to capitalize on the loopholes in the system, but have gone ahead to engage and disclose their CSR activities, given that there may be financial consequences. This, therefore, provides the motivation for the current study. The first objective is to examine the economic impact of CSRD on the performance of companies in Nigeria. The second objective is to empirically provide evidence of the role of corporate governance on the CSRD-performance relationship. We examine corporate governance, as the decision to engage in CSR-related activities lies with the management, of which the board is a part. To the best of our knowledge, no study in Nigeria has examined the combined effect of corporate governance and CSRD on firm performance. We add to the current research on CSR in the following ways. Firstly, we provide empirical evidence on the effect of CSRD on firm performance in a developing country context, with a focus on Nigeria where there are relatively few studies. Given that Nigeria is one of the largest