Role of Government in the Promotion of Corporate Social Responsibility (CSR): The Case of Bangladesh Banking Sector

Abstract

CSR initiatives are increasing in the context of Bangladesh like many other developing countries. Here, both the government and the private sector are contributing in CSR. Especially government is playing significant role in the promotion of CSR. The main purpose of this study is to identify how government policies, guidelines and regulations influence CSR initiatives in Bangladesh banking sector. Qualitative content analysis has been used to analyse Bangladesh central bank‟s annual CSR reports, commercial banks‟ annual reports, websites and relevant publications. CSR data and information of all 48 commercial banks, including the private, government and foreign banks were considered to analyse CSR expenditures during the period 2007-2010. Some western countries provide examples of governments acting as drivers of CSR to ensure social wellbeing. Previous studies of banking CSR in Bangladesh have primarily explored the nature of CSR disclosures, corporate governance, corporate sustainability reporting and corporate social reporting. However, studies of the roles of government or regulatory authorities in the promotion of CSR are very limited, especially in the context of Bangladesh. The study identified that the notion of increased CSR activities in Bangladesh banking sector is consistent with government influence in this area through regulatory mechanism. This study presents a new model in the context of a developing country, where government influences in the promotion of CSR. It appears that Bangladesh government promoted CSR through regulatory mechanism. With this experience in the banking sector, government can take such initiatives for other business sectors as well. CSR expenditure increased ten folds in four years after the government intervention. This increased CSR expenditure helped reduced unemployment, alleviate poverty, supported education and healthcare and ultimately improved the quality of life of the citizens of Bangladesh. This study precisely identified that government influence can increase CSR initiatives as well as benefit the society in an incremental way. It is an original contribution as such studies are limited in the context of Bangladesh.

Keywords: Corporate Social Responsibility (CSR), bank, role of government, influence, regulation, Bangladesh

Australian Academy of Accounting and Finance Review, vol 1, issue 1, July 2015, page 44-68