Adelagun, Oyereyi Adetoun
A Review of CSR as Practised by Nigerian Banks in The Face of Globalisation.
[Dissertation (University of Nottingham only)]
In recent years CSR has become a fundamental business practice and has gained much attention from chief executives, chairmen, boards of directors and executive management teams of larger international companies. They understand that a strong CSR program is an essential element in achieving good business practices and effective leadership. Companies have determined that their impact on the economic, social and environmental landscape directly affects their relationships with stakeholders, in particular investors, employees, customers, business partners, governments and communities.
The effects of globalisation and global capitalism have been explored by many over the last two decades and the merits it brought in terms of wealth creation alone seemed to be pronounced and projected over and above its failures. Within the last decade however, precisely in the mid 1990´s, anomalies such as the huge income gaps between nations, could no longer be hidden. The recent banking reform heralded by the former governor of central bank of Nigeria, Professor Soludo in 2006 brought about a wave of new “competent and competitive players” and the Nigerian banking system is now driven by advanced competition brought about by globalization and deregulation of financial services, privatization of formerly public banks, heightened development in information technology, among others, in its pursuit to render services in the most profitable way. The reform has affected banks customers’ habits and brought about the increasing demands for clear and hard facts about the social and environmental performance of banks by an increasingly well-informed breed of stakeholders making corporate social responsibility (CSR) agenda a “must have” in today’s banks.
The aim of this study is to understand CSR as practiced by Nigerian banks with a view to establishing the motivating factors. The research seeks to identify the key issues that drive CSR by reviewing the business model, industry structure and stakeholder dynamics. The scope of research was limited to four practicing CSR banks-Fidelity Bank plc, United Bank for Africa plc, Guarantee Trust Bank plc and Bank PHB plc who have all bagged one form of award or the other in recognition of their CSR initiatives.
A variety of textbooks, academic publications, electronic databases were sources of data. Google scholar and other online institutional publications as well as specialized magazines and newspaper sources equally provided useful data.
The study shows that CSR as a concept is relatively new in Nigeria and is mainly philanthropic with practices and understanding to a large extent “imported” from the West. It was also established that the key issues that drive banks generally in embarking on their CSR programmes include reputation, competitive advantage, risk management, employee performance and retention, government and regulatory impact and community involvement. However, within the context of a developing nation, other drivers of CSR in the banking sector recognized are cultural tradition, political reform, government gaps, crisis response and market access. Visser, W. (2008)
Burke et al’s (1996) five strategy dimensions and Baron’s (1995) Integrated Strategy Framework were employed for the purpose of the further analysis to establish the sustainability of the CSR practices. It was found out these banks need to be more proactive about addressing the issues that will ultimately derive adequate value for themselves and the stakeholders.
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