milos starovic prof. dr. li choy chong prof. dr. martin hilbfile/dis4499.pdfcorporate social...

Corporate Social Responsibility (CSR) within the banking industry throughout

financial crises: Focus on banks in Asia during two financial crises: 1997 and 2008

DISSERTATION

of the University of St. Gallen,

School of Management,

Economics, Law, Social Sciences

and International Affairs

to obtain the title of

Doctor of Philosophy in Management

submitted by

Milos Starovic

from

Serbia

Approved on the application of

Prof. Dr. Li Choy Chong

and

Prof. Dr. Martin Hilb

Dissertation no. 4499

Gutenberg AG, Schaan 2016

ii

The University of St. Gallen, School of Management, Economics, Law, Social

Sciences and International Affairs hereby consents to the printing of the present

dissertation, without hereby expressing any opinion on the views herein expressed.

St. Gallen, November 2, 2015

The President:

Prof. Dr. Thomas Bieger

iii

Acknowledgments

When my best man, Dr Mato Njavro, alumni of St. Gallen University,

introduced me to Prof. Chong during a conference in Zurich in summer 2012, I

knew that there is a long road ahead: not only in applying, attending and

completing a PhD programme, but also in staying heavily involved in the CSR

activities and mission of the Asian Research Centre (ARC), which was founded by

Prof. Chong many years ago. I would also like to express special thanks to Prof.

Hilb, whose book on corporate governance was inspirational material for some

frameworks developed in this dissertation.

I would like to thank to my parents and my brother for their strong

support throughout my entire education. My Aunt Ranka, a maths professor in

retirement, wrote in the congratulatory card when I completed my Master Degree

in Milan seven years ago, “For your move to London, you now have a Master‟s

degree. For further advancement in life you need a PhD”.

Great gratitude goes to my above mentioned friend Dr. Mato Njavro, who

pushed me to pursue this degree and stay focused all these years. Also, I would

like to thank to my best friend Jus Rojnik, whose comments significantly improved

the quality of this work. Moreover, friend and colleague Hendrik de Bruin also

contributed with his insights on the final version of this dissertation. Big thanks

also goes to Melk Bucher, another St. Gallen PhD candidate, who kindly offered a

guest sofa in his student flat each and every time I was staying in St. Gallen

throughout my PhD work.

I cannot forget the support of the company I work for, Barclays Bank in

London, whose Citizenship Department was very keen to help and provide their

insights into the contemporary concept of CSR, as well as my management who

was supportive of the days off I took, given the alignment with our company

mission “Help people achieve their ambitions in the right way”.

iv

My primary personal gratitude goes to my wife Olga, who was very

supportive throughout the entire process. I hope that she has forgiven me for the

week of absence during her birthday two years ago, when I had to stay in

Switzerland and focus solely on my studies. She has also been extremely patient in

the period preceding our wedding, which has overlapped with the PhD submission.

In moments like this multitasking is the key, given required commitments at home,

work, wedding planning and above all meeting deadlines related to the PhD

submission.

Milos Starovic

June 03, 2015

London

v

Table of Contents

1. Introduction ........................................................................................................ 1

2. Literature Review and Research Gap Identification ...................................... 7

2.1 The Existing Literature Stream on CSR .................................................... 7

2.1.1 CSR within the context of China ..................................................................................... 8

2.1.2 CSR in the context of Japan ............................................................................................ 9

2.2 Criticism Perspective on the subject of CSR ........................................... 12

2.3 Research Gap Identification ..................................................................... 13

2.4 Research Question(s) ............................................................................... 17

3. Methodology ..................................................................................................... 19

3.1 Research Design ...................................................................................... 19

3.2 Data collection and Sample ..................................................................... 23

3.2.1 CSR and banks in Asia throughout the most recent financial crisis (2008) ................ 23

3.2.2 CSR and banks in Asia throughout Asian crisis (1997) ............................................... 25

3.2.3 CSR Dynamics throughout both the 1997 and 2008 crises: Case study of Barclays .. 27

3.3 Establishing CSR measures ..................................................................... 34

3.3.1 CSR and banks in Asia throughout the most recent financial crisis (2008) ................ 35

3.3.2 CSR and banks in Asia throughout the Asian crisis (1997) ......................................... 41

3.4 Most Recent Financial Crisis: Empirical Study ....................................... 42

3.4.1 CSR and banks in Asia throughout the most recent financial crisis (2008). The Event

Study 42

3.4.2 Hypotheses and Regression Analysis ............................................................................ 48

3.5 Asian Crisis (1997): Qualitative Frameworks ......................................... 51

3.5.1 Asian crisis as a trigger for CSR involvement by Thai banks ...................................... 53

3.5.2 CSR patterns of Thai Banks in 2007 vs. 1998. Comparative Analysis ........................ 55

3.5.2.1 CSR in Thailand: Institutional Context ............................................................. 59

3.6 CSR Dynamics Throughout both the 1997 and 2008 crises: Case Study

with Features of Grounded Theory .................................................................... 63

3.6.1 Case Study with Features of Grounded-Theory ........................................................... 64

vi

3.6.1.1 Data Analysis and Theory Development ........................................................... 65

3.6.1.2 Coding Process ................................................................................................... 65

3.6.2 Barclays – Case study ................................................................................................... 72

3.6.2.1 Barclays: Historical Perspective on the British “giant” .................................... 72

3.6.2.2 Barclays CSR journey ........................................................................................ 79

3.6.2.3 Barclays CSR Asia perspective ......................................................................... 82

3.6.2.4 Barclays CSR stakeholders ................................................................................ 85

4. Key Findings and Discussions ......................................................................... 87

4.1 CSR throughout the crises. The Evolutionary Perspective. Establishing

the ENMEM framework .................................................................................... 87

4.2 CSR throughout the crises. Key findings from the Mixed-Methods

Research Design ................................................................................................ 92

4.2.1 CSR throughout the Asian Crisis of 1997. Qualitative Analysis .................................. 92

4.2.2 CSR throughout the most recent financial crisis of 2008. Event Study and Regression

Analysis 94

4.2.3 CSR throughout the Asian Crisis of 1997 and the most recent crisis of 2008.

Qualitative/Case Study Analysis with Features of Grounded Theory ....................................... 102

4.2.3.1 CEO and Top Management Commitment to CSR .......................................... 102

4.2.3.2 Value Drivers for Individual Involvement in CSR activities .......................... 104

4.2.3.3 Country Focus and Alignment of Corporate Strategy with Public Policy ...... 104

4.2.3.4 Determining Typology of CSR Activities ....................................................... 106

5. Conclusions and Recommendations for Further Research and Practice .. 110

5.1 General Conclusions and Recommendations for Management. The

Establishment of the G.I.P.R.S framework ..................................................... 111

5.1.1 CSR as an instrument to tackle Issues of Global Importance .................................... 111

5.1.2 CSR as an Instrument for Positioning ........................................................................ 113

5.1.3 CSR as a Reputation Management Instrument ........................................................... 114

5.1.4 CSR as an instrument to foster Social Entrepreneurship ........................................... 115

5.2 Specific Conclusions and Recommendations for Management. Applying

the GI.P.R.S framework .................................................................................. 116

5.2.1 SEED Programme tackling issues of Global Importance .......................................... 117

5.2.2 SEED Programme as an instrument for Positioning ................................................. 117

vii

5.2.3 The SEED Programme as a Reputation Management Instrument ............................. 118

5.2.4 The SEED Programme as an instrument to foster Social Entrepreneurship ............. 119

5.3 Recommendations for Further Management Research .......................... 119

Bibliography ....................................................................................................... 122

viii

List of Appendices

Appendix A: Full Transcripts of Interviews .................................................... 129

Appendix B: Open Coding .............................................................................. 130

Appendix C: Full List of Codes ...................................................................... 134

ix

List of Tables

Table 1-1: US Federal Deposit Insurance Corporation (FDIC) bank failures

(Source: fdic.gov) ................................................................................................ 3

Table 1-2: Percentage of those who trust for banks (Source: Cannon, 2012) ..... 4

Table 2-1: Evidence of CSR boom in Japan (Source: Umezu (2010) and other

multiple sources of data) ................................................................................... 10

Table 3-1: Reasons for using mixed-method design for this dissertation (Source:

Developed from Saunders et al. (2012), p. 169, and authors‟ experience.) ....... 21

Table 3-2: Global Banks Ranked by Total Assets on September 15, 2008

(Source Bloomberg) .......................................................................................... 24

Table 3-3: Global Banks Ranked by Total Assets on July 2, 1997 (Source:

Bloomberg) ....................................................................................................... 26

Table 3-4: Overview of recent banks reputational scandals (source: Multiple

Sources of Data) ................................................................................................ 28

Table 3-5: Minimum non-probability sample size (Source: Saunders, 2012, p.

283). .................................................................................................................. 29

Table 3-6: The Interview Process. Details......................................................... 32

Table 3-7: Announcements on CSR Activities by Top 25 banks Worldwide in

2008 (Multiple Sources of Evidence) ................................................................ 35

Table 3-8: CSR Activities Scoring: CSR and banks in Asia throughout the most

recent financial crisis (2008) ............................................................................. 37

Table 3-9: CSR score for Asian banks throughout the most recent financial

crisis .................................................................................................................. 39

Table 3-10: CSR Activities Scoring: CSR and banks in Asia throughout the

Asian crisis (1997) ............................................................................................ 41

Table 3-11: One day vs. one week Share Price Change Post CSR

Announcement (Source: Bloomberg) ................................................................ 43

Table 3-12: CSR Activities Total Scores and Share Prices in 2008 and 2013

(Source: Bloomberg) ......................................................................................... 46

Table 3-13: Results of Regression Analysis for Hypothesis 1 .......................... 48

x

Table 3-14: Results of Regression Analysis for Hypothesis 2 .......................... 50

Table 3-15: CSR Activities by Thai Banks: 1997 vs. 2008 (Source: Multiple

Sources of Data) ................................................................................................ 56

Table 3-16: Parameters demonstrating health of Thai economy (Multiple

Sources of Data) ................................................................................................ 61

Table 3-17: Conceptual Codes: Breaking down the full transcription of

Interview(s) ....................................................................................................... 66

Table 3-18: Example of Clustering of Conceptual and New Codes .................. 68

Table 3-19: Examples of Barclays CSR activities in Asia at the peak of the

2008 crisis (Source: Barclays Sustainability reports for 2007 and 2008. Selected

by Author) ......................................................................................................... 82

Table 4-1: The timeline of CSR evolution in Asia (Source: Author) ................ 88

Table 4-2: Timeline of the CSR activities. Since 2007 onwards (Source:

Author‟s selection of publicly available sources) .............................................. 89

Table 4-3: The ENMEM framework: The Classification of CSR periods by

Author ............................................................................................................... 90

Table 4-4: One Day Post CSR Announcement Change in Share Price ............. 96

Table 4-5: Pairing Number of Events with One Day % Changes in Share Price

Post CSR Announcement .................................................................................. 96

Table 4-6: One Week Post CSR Announcement Change in Share Price .......... 98

Table 4-7: Pairing Number of Events with One Week % Changes in Share Price

Post CSR Announcement .................................................................................. 98

Table 4-8: Asian Banks CSR activities and Share Price Performance at the peak

of 2008 crisis ................................................................................................... 100

Table 4-9. Vision-Based Benefit Dimension in the context of CSR. (Source:

Developed from Hilb (2008), p. 135, and author‟s experience.) ..................... 109

Table 5-1: Social Entrepreneurship and Barclays Citizenship Activities (Source:

Sustainability Reports for the respective years and Author‟s experience) ...... 116

Table A-1. Coding Process. Sequence of Interviews. ..................................... 130

Table A-2. Full List of Codes in the Sequential Order .................................... 134

xi

List of Figures

Figure 1-1a: Dissertation Overview .................................................................... 6

Figure 1-1b: Dissertation Overview: Themes of the Dissertation ....................... 6

Figure 2-1: Research Gap Identification (indicated in dark blue) ..................... 16

Figure 2-2: Dissertation Focus: Three Themes ................................................. 17

Figure 3-1: Mixed-method Breakdown for the Themes of the Dissertation ...... 22

Figure 3-2: Dissertation Themes. Highlighting Theme One ............................. 23

Figure 3-3: Dissertation Themes. Highlighting Theme Two ............................. 25

Figure 3-4: Dissertation Themes. Highlighting Theme Three ........................... 27

Figure 3-5: Example of Tendency of CSR activities by top Asian banks in 2008

........................................................................................................................... 40

Figure 3-6: Dissertation Themes. Highlighting Theme One ............................. 42

Figure 3-7: Dissertation Themes. Highlighting Theme Two ............................. 51

Figure 3-8: Importance of CSR Committee – Organizational Chart of KTB

Bank, as of Dec 31, 2008. (Source: KTB 2008 Annual Report). ...................... 58

Figure 3-9: Development of Institutional Frameworks supporting CSR in

Thailand. Sources (Fukukawa, 2010 and author‟s experience) ......................... 59

Figure 3-10: “Thai Decade” CSR and Economic Parameters ten years after the

Asian crisis of 1997 (Source: Author) ............................................................... 62

Figure 3-11: Dissertation Themes. Highlighting Theme Three ......................... 63

Figure 3-12: Screenshot of Open-coding with MAXQDA ................................ 71

Figure 3-13: Barclays Group Organizational Structure at the peak of the 2008

financial crisis ................................................................................................... 76

Figure 3-14: Barclays‟ CSR Journey (Source: CSR Ambassadors Briefing,

October 2014 and Author‟s Experience) ........................................................... 80

Figure 3-15: CSR pillars at the Barclays Group Level (Source: Barclays

Sustainability Report, 2014) .............................................................................. 82

xii

Figure 4-1: Employees involvement in Banks across the ENMEM framework

(Source: Author) ................................................................................................ 91

Figure 4-2: Comparing CSR activities among the two samples from the

dissertation (Source: Author) ............................................................................ 93

Figure 4-3: One Day Change in Share Price Frequency Graph ......................... 97

Figure 4-4: One Week Change in Share Price Frequency Graph ...................... 99

Figure 4-5: Share Price Performance in the isolation of macro events (Source:

Author) .............................................................................................................. 99

Figure 4-6: Model of Strategic CSR. Alignment of CSR commitment with

business objectives (Source: Author) .............................................................. 108

Figure 5-1: Barclays Women in Leadership Index (Source: Bloomberg) ....... 112

xiii

List of Abbreviations

AG Aktiengesellschaft – Stock Corporation

ASEAN Association of Southeast Asian Nations

BERC Business Ethics Research Centre (BERC)

BIS Bank for International Settlements

CEO Chief Executive Officer

CGI Clinton Global Initiative

CIS Commonwealth of Independent States

COO Chief Operating Officer

CSR Corporate Social Responsibility

CSRC Corporate Social Responsibility Chapter

CSRI Corporate Social Responsibility Institute

CV Curriculum Vitae

DCO Dominion, Colonial and Overseas – Barclays

ENMEM Evolutionary, Nascent, Maturing, Expectancy,

Mandatory

FC Financial Corporation

FX Foreign Exchange

GBP Great Britain Pound

GDP Gross Domestic Product

GIPRS Global Issues, Positioning, Reputation, Social

Entrepreneurship

GRCB Global Retail and Commercial Banking

HIV Human Immunodeficiency Virus

HSBC Hong Kong and Shanghai Banking Corporation

IB Investment Banking

IBIM Investment Banking and Investment Management

IMF International Monetary Fund

ISO International Standards Organization

xiv

JP JP Morgan Chase

JSBES Japan Society of Business and Ethics Studies

KTB Krung Thai Bank in Thailand

MBA Master in Business Administration

MNC Multinational Corporation

MNE Multinational Enterprise

NGO Non-Governmental Organization

NYSE New York Stock Exchange

PLC Public Limited Company

PR Public Relations

PWC PricewaterhouseCoopers

RBS Royal Bank of Scotland

SEED Social Enterprise and Employment Development

SME Small and Medium Size Enterprises

SMFG Sumitomo Mitsui Financial Group

TBCSD Thailand Business Council for Sustainable

Development

UFJ Bank of Tokyo-Mitsubishi UFJ (BTMU)

UK United Kingdom

UN United Nations

US United States

USD United States Dollar

YBI Youth Business International

xv

SUMMARY

The aim of this dissertation is to build a common body of knowledge on

CSR within a financial services context, with a clear focus on its operation

throughout the recent major financial crises. Over the recent years, CSR has

become an emergent concept for the banking sector, particularly given the ongoing

pressure to reshape and even entirely reformulate ways in which banks operate.

This dissertation uses a mixed-method research design and covers three themes:

The first theme focuses on CSR within the global banking industry with special

focus on banks in Asia over the most recent 2008 financial crisis, whilst the second

theme focuses on the Asia-specific crisis of 1997. In both of these themes, we

collected, scored and analysed corporate announcements referring to CSR

activities at banks within the sample. The third theme of the dissertation applies

the case-study method with features of grounded-theory approach, by focusing on

CSR activities in the context of Barclays Bank PLC.

The Key Findings section defines the evolutionary dynamics of CSR

throughout the crises; it also presents the alignment of CSR with banks‟ strategic

objectives within a management framework which can be used within the banking

industry and to further research.

Finally, the Conclusions and Recommendations section provides an in-

depth review of key factors that contribute to an effective CSR strategy for banks

at the times of financial crises. This section extends an application of those factors

identified in the context of Social Enterprise for Economic Development (SEED)

programme which we recognize as being particularly relevant and unique in

illustrating the findings of this dissertation.

xvi

ZUSAMMENFASUNG

Das Ziel dieser Arbeit ist es, einen Wissensfundus über CSR innerhalb

der Finanzdienstleistungs-Industrie zu etablieren, mit einem klaren Fokus auf CSR

Verlauf der jüngsten Finanzkrisen. In den letzten Jahren hat sich CSR zu einem

wichtigen Konzept für den Bankensektor entwickelt, vor allem aufgrund des

anhaltenden Drucks auf Banken, ihre Geschäftsmodelle umzugestalten, oder gar

ganz neu zu formulieren. Diese Dissertation bedient sich eines Mixed-Method

Forschungsdesign, und widmet sich drei Themen: Das erste Thema behandelt CSR

in der globalen Bankenindustrie mit einem speziellen Fokus auf asiatische Banken

in der letzten (2008) Finanzkrise, während das zweite Thema die Asien-Krise von

1997 näher beleuchtet. In beiden diesen Themen haben wir Unternehmens-

Ankündigungen zu CSR-Aktivitäten der Stichproben-Banken gesammelt, bewertet

und analysiert. Das dritte Thema baut af einem Case Study Ansatz mit

Eigenschaften der Grounded Theory Methode auf um die CSR-Aktivitäten der

Barclays Bank PLC zu analysieren.

Als Ergebnis schlägt diese Arbeit eine Definition der Evolutionsdynamik

von CSR während Krisen vor und zeigt zudem das "Alignment" von CSR mit den

strategischen Zielsetzungen der Banken innerhalb eines Management-Frameworks

auf, welches innerhalb des Bankensektors und für weiteres Research verwendet

werden kann.

Als Fazit macht diese Arbeit eine Empfehlung zur tiefgreifenden

Überprüfung der Schlüsselfaktoren, die zu einer effektiven CSR-Strategie von

Banken in Zeiten von finanziellen Krisen beitragen können. Dieser Abschnitt

wendet die identifizierten Faktoren im Kontext des "Social Enterprise for

Economic Development (SEED)"-Programm an, welches als besonders relevant

angesehen wird, um die Resultate dieser Dissertation zu illustrieren.

1

1. Introduction

“(…) the laws of the market led to a state of chaos that brought a rescue

of thousands of millions of dollars – to the culprits, not the victims. In other words,

“rescue” meant “privatize the profits, nationalize the losses”. This is a unique

opportunity to redefine the global economic system in favour of social justice.

There was no money to fund the fight against AIDS, nor to support feeding the

world…and finally, in a real financial whirlwind, it turns out that there were

enough funds to save from ruin those very same people who, by overly favouring

dotcom and property bubbles, have destroyed the world economic edifice of

“globalization”(…)”.

-Jose Saramago, winner of the Nobel Prize for literature, The Notebook: A

New Capitalism? , p. 55

Doing “good” within the community in which one operates, following the

event of the global crisis of 2008 and accompanying corporate scandals, gave CSR

a completely new dimension. Definition of the term “Corporate Social

Responsibility (CSR)” has been reshaped multiple times since its first appearance

in management literature more than half a century ago. There has been substantial

amount of research focused on the concept of CSR in the context of microfinance,

charitable initiatives to combat poverty in specific regions, disaster prevention

programmes, etc. However, there is very limited research that analyses CSR in the

context of the global banking industry. This aspect is particularly relevant given

current pressure to reshape and even entirely reformulate ways in which banks

operate, both from regulatory and social perspective, seeking to make banks both

less risky (which increases short term capital and financial pressure) and more

socially responsible. This “restructuring” of the banking sector is the result of the

outbreak of the most recent financial crisis, followed by countless corporate

2

scandals and overall negative perception of major global financial institutions that

can influence the way in which the world economy operates.

There is nothing new about systemic banking crises. Laeven and Valencia

(2008) identified over 100 systemic banking crises over the period of 1970-2007.

In the US alone, just fewer than 400 banks with assets of $658 billion have failed

since 2007 (Table 1-1). Although the impact of the most recent global crisis had

less extent in Asia in comparison to Europe and the US, its banking sector has also

gone through the turbulence. The Sumitomo Mitsui Banking Corporation, Mizuho

Corporate Bank, Ltd, Syngenta AG Mitsui & Co Ltd, Mitsubishi UFJ Financial

Group and Shinhan Financial Group Co Ltd were among the Asian banks needing

to be propped up to avoid the consequences of years of seemingly reckless

behaviours and the resulting “toxic debt” . According to Cannon (2012), CSR

failed to pick up on these internal failures within the banking system, and this

exacerbated crisis even further. Interestingly enough, Fortune‟s most admired

companies for 2007 included Lehman Brothers, Bear Sterns, Merrill Lynch and

AIG1 given their efforts to invest in socially responsible society. It is also worth

pointing out to the Economist article, that states the following on the future of

banking: (The Economist, 2014, September, 27th, The Future of Banking, p.14):

“(…) In 2006, the eight American banks that regulators have since labelled

“globally systematically important” generated casino-like profits, with returns on

equity of 30% on average, according to Oliver Wyman, a consultancy firm. They

are currently managing less than 11%, and there is worse to come: the Federal

Reserve (FED) recently announced plans to oblige them to raise extra capital. By

1 One year after this recognition, due to risky real estate investments, Lehman Brothers filed for bankruptcy once FED

rejected a rescue plan and not classifying Lehman Brothers as being a “too-big-to-fail” entity; Bear Stearns failed due

to large exposure to the subprime crisis and it was sold to JPMorgan Chase; Merrill Lynch was sold to the Bank of

America for USD 50bn, while A.I.G was rescued by the Federal Reserve (FED) on the argument that it is too big to

fail (the US government got an 80% equity stake).

3

one calculation that would reduce their return on equity to little over 8%, other

things being equal – a lower return than America‟s water companies (…)”.

Table 1-1: US Federal Deposit Insurance Corporation (FDIC) bank failures

(Source: fdic.gov)

Year Number of failed banks Total Assets of failed banks

(USD)

2007 3 2,602,500,000.00

2008 25 373,588,780,000.00

2009 140 170,867,000,000.00

2010 157 96,514,000,000.00

2011 92 66,555,974.52

In 2010, International Business Leaders Forum (IBLF) did research on

fifty global business leaders and estimated that 96% of those surveyed emphasized

that “the sustainability efforts needed to be integrated into their respective

strategies and operations”2. This is a significant jump in comparison to 2000, when

only 11% of CEOs believed that CSR was an integral factor to improving

commercial success. Moreover, the Corporate Social Responsibility Branding

Survey3 reveals that consumers continue to prioritize CSR across various sectors

despite recession. However, of the fourteen tested industries, food, consumer

goods and retailers are perceived as performing best, whilst these industries where

respondents most highly value responsibility, financial services, healthcare and

media are performing worst on the issue.

2 “CSR is no longer a „bolt-on‟ activity” - Echo Research Survey in collaboration with International Business Leaders

Forum (10/12/2010):

http://www.theguardian.com/sustainable-business/blog/csr-corporate-social-responsibility

3 Landor Associates press release (29/03/2010):

http://landor.com/#!/about/news/press-releases/consumers-continue-to-prioritize-social-responsibility-across-sectors,-

despite-recession/

http://www.theguardian.com/sustainable-business/blog/csr-corporate-social-responsibility

http://landor.com/#!/about/news/press-releases/consumers-continue-to-prioritize-social-responsibility-across-sectors,-despite-recession/

http://landor.com/#!/about/news/press-releases/consumers-continue-to-prioritize-social-responsibility-across-sectors,-despite-recession/

4

On the whole, banks belong to those industries where decline in trust is

most noticeable. As Table 1-2 below suggests, especially in the US and UK, banks

have been transformed from being among the most trusted organizations to those

with the lowest level of trust.

Table 1-2: Percentage of those who trust for banks (Source: Cannon, 2012)

Year US UK

2007 68 41

2008 69 47

2009 36 31

2010 29 21

2011 24 14

Such a decline in trust from society towards bankers and bankers towards

society is found to be reciprocal. Muhammad Yunus, a Nobel Prize laureate, stated

that every time he urged the bankers to expand their programmes to cover a certain

field, they showed no interest. It is imperative however that this relationship

improve in the future. Consumers, as well as of businesses nowadays need the help

of financial institutions given liquidity shortages and the overall consequences of

the most recent financial turmoil. Banks on the other hand need to respond to the

financing needs of social businesses. Time will show whether this will become a

stringent regulatory requirement going forward given the trend in shifting business

strategies of global financial players towards responsible banking. This trend is

the result of pressure from regulators around the world, the most prominent being

the European Central Bank (ECB), the Bank of England (BOE) in addition to the

Federal Reserves (FED) in the United States. Such pressure will certainly force

banks to be safer, because predictably they will have to shrink their less profitable

divisions which require large amounts of capital and also limit bankers‟ bonuses

for a number of years. However, time will show to what extent banks will

“compete” in engaging in significant CSR activities in this new financial order.

The Key Findings section elaborates the impact of CSR on banks‟ share price

5

returns and analyses the difference between shorter vs. longer term performance

linked to CSR activity (Theme 1: CSR and banks in Asia throughout the most

recent financial crises (2008)). Within theme two of the dissertation (CSR and

banks in Asia throughout the Asian crisis (1997)), we utilize qualitative

frameworks in the context of CSR activities employed by banks in Asia throughout

the crisis of 1997, with special focus on banks in Thailand. In the case-study

example of Barclays (Theme 3: CSR Dynamics throughout both the 1997 and 2008

crises: Case Study of Barclays Bank), Key Findings aim to grasp how one of the

systemically important banks addresses the concept of CSR in the context of these

outlined trends. This is extended further within the Conclusions and

Recommendations section, where an in-depth review of key factors that contribute

to an effective CSR strategy for banks during times of financial crises is

provided. A graphical overview of the dissertation and its themes is presented

in figures 1-1a and 1-1b below.

6

Figure 1-1a: Dissertation Overview

Figure 1-1b: Dissertation Overview: Themes of the Dissertation

CSR and banks in Asia

throughout the most recent

financial crisis (2008)

Theme 1


throughout the Asian crisis

(1997)

CSR dynamics throughout both

the 1997 and 2008 crises:

Case study of Barclays Bank

Theme 2 Theme 3

Emergent Theory Development and Recommendation

for Further Research and Practice

7

2. Literature Review and Research Gap Identification

2.1 The Existing Literature Stream on CSR

As mentioned in the introductory section (Ch. 1), the concept of CSR

dates back to the 1950s. CSR was characterized by a sense of social obligation,

which according to Bowen (1953) implies “to follow those lines of action which

are desirable in terms of the objectives and values of our society” (p. 6). There is

plentiful research available on Corporate Social Responsibility and the impact of

CSR programmes on firms‟ financial performance (most frequently expressed

through share price). By analysing management research from the 70s, it can be

found that one of the predominant views was that corporate social responsibility is

positively correlated to an organization‟s stock market performance. Sturdivant

and Ginter (1970), Moskowitz (1972) as well as Parket and Eilbirt (1975)

advocated that active involvement in CSR activities leads to improved

relationships with important stakeholders such as banks, investors, and

government agencies and public in general. On the contrary, Alexander and

Buchholz (1978) as well as Guerard, Stone et al (1988) found no relationship

between CSR and stock performance. A more recent research stream by Lin, Yang

et al (2009) found that CSR does offer a remarkable long-term fiscal advantage;

however they advocate that CSR does not have a significant impact on the short

term financial performance. Within theme one of the dissertation (CSR and banks

in Asia throughout the most recent financial crisis) we shall try to assess the

impact of CSR on the banks‟ share price since the start of the most recent financial

crisis by using two hypotheses. Our first hypothesis will test whether there is a

dependency between the cumulative score of CSR activity4 by each bank within

4 Method of assigning CSR for each CSR activity for the sample is defined in section 3.2 Defining CSR Measure

8

the sample and their share price over 2008-2011. The second hypothesis considers

the dynamics between the CSR involvement and the share price of banks in the

sample over the five year period instead. The determination of variables as well as

the explanation of the methodology used for the empirical study for this theme of

the dissertation is covered in-depth in Section 3.3 of this dissertation. When it

comes to the most recent financial turmoil, Asian banks that form the sample

(defined within section 3.2) have either Chinese or Japanese origin; therefore these

two countries deserve special attention. On that basis, the following two sub-

sections will be dedicated to the CSR within the context of these two countries.

2.1.1 CSR within the context of China

(...) It is said (with apparent sincerity) that some Chinese firms keep

several sets of books – one for the government, one for company records, one for

foreigners and one to report what is actually going on. By contrast, international

accounting standards are built on the foundations that China does not possess,

such as truthful record-keeping and deep, clean, markets so that “fair” valuations

can be placed on financial instruments, property, or softer assets like brands and

intellectual property (...).

- Chinese Accounting – Cultural Revolution, The Economist, January 11,

2007

It is well-known that China is heavily criticized for its economic „miracle‟

coming at the expense of the environment. This criticism regularly appears in the

media and CSR prominent literature (Shafer, 2010). As Harris (2006) openly

criticizes, the main reasons for Chinese environmental problems are “the

behaviours and underlying attitudes of the Chinese people. How they perceive and

value the environment will largely determine how they behave in relation to it”

(p.6). He gives strong criticism to the attitude of authorities towards environmental

policies and states that the main top priorities of the Chinese are poverty reduction,

9

strong economic development and wealth creation. The same line of this research

stream suggests that the new generation of the Chinese admire all things of foreign

origin (Shafer, 2010) and aspire to adopt Western consumer culture, as reflected in

the rapid growth of markets for luxury goods (Kwong 1994, Weber 2002, Harris

2006). Thus, Harris (2006) suggests that significant additional efforts are needed to

educate Chinese people, particularly the new generation, on emergent

environmental issues.

By analysing materials from published media on China in the period

preceding ultimate financial crisis, it is evident that plenty of eminent international

journals did address this issue. As confirmed by many researchers, such as: Tseng

(1999), Ross (1999), Kobayashi (2004), Harris (2005), economic growth was

taking precedence over the environment5.

2.1.2 CSR in the context of Japan

Japan is a country where the event of CSR can be closely linked to the

outbreak of crises within the banking sector. The concept that banks need to be

socially responsible became widely discussed in 1992 following the bankruptcies

of Yamaichi Securities and Hokkaido Takushoku Bank6 (Kawamura, 2003). By

observing Nikkei Telecom 21 database, we can see that the number of the CSR

articles in four major Nikkei newspapers was 2.5 times more in 2003 in

comparison to 2000. In 2007, this representation of the CSR articles in major

newspapers could be measured in multiples of 10, while in 2010 in multiples of 27

5 However, throughout the methodology section (Ch. 3) we note that Chinese banks, belonging to the sample, received

a reasonable level of engagement within the environmental field in response to criticism by media.

6 These bankruptcies are linked to Japan‟s Non-Performing Loan Problem and Financial Reconstruction.

10

in comparison to 20007. Therefore, 2003 is considered to be a boom year regarding

CSR in Japanese business activities.

By comparing the examples of CSR activities in Japan vs. China, we can

conclude that Japan is a complete opposite example to China given that significant

efforts have been invested in educating Japanese citizens regarding environmental

issues and pro-environmental values, attitudes and behaviour. These educational

efforts are focused on Japanese young elites. We selected three findings by Umezu

resulting from seminars he held (2005, 2007, and 2010) and adjusted quick “back-

envelope”8 calculations to calculate the rate of growth in order to demonstrate this

CSR boom in Japan, illustrated in Table 2-1 below.

Table 2-1: Evidence of CSR boom in Japan (Source: Umezu (2010) and other

multiple sources of data)

90’s: 2000s: Rate of growth

1993: 30 Scholars started Japan Society of Business and Ethics Studies (JSBES)

2009: JSBES members exceeded 450 15 X

1997: Business Ethics Research Centre (BERC) established by 14 corporations

2007: BERC members exceeded 110 corporations 8 X

1996: 22 Universities offered Business Ethics (4.5% of all Japanese Universities)

2005: 43 Universities offered Business Ethics (9.3% of all Japanese Universities)

2 X

7 http://t21.nikkei.co.jp/

8 As explained by Investopedia: An informal mathematical computation often performed on a scrap of paper such as

an envelope. A back-of-the-envelope calculation uses estimated and/or rounded numbers to quickly develop a ballpark

figure. The result should be more accurate than a guess, but will be less accurate than a formal calculation performed

using precise numbers and a spreadsheet or calculator: http://www.investopedia.com/terms/b/back-of-the-envelope-

calculation.asp

http://t21.nikkei.co.jp/

http://www.investopedia.com/terms/b/back-of-the-envelope-calculation.asp

http://www.investopedia.com/terms/b/back-of-the-envelope-calculation.asp

11

The available literature acknowledges that this CSR growth in Japan can

be attributed to the following three factors:

1. Support from Government and official institutions

2. Strong cooperation and “constructive”9 pressure by International

Organizations

3. DNA10 of Japanese culture

Within the first factor, Tanimoto (2004) notes that in order to provide

better protection for consumers, supervisory agencies such as the Japan Fair Trade

Commission and the Financial Services Agency, have done “naming and shaming”

of those companies that violated the environmental law or principles of good

market practice. He also mentions examples of companies that have lost their

licenses and had difficulties in rebuilding business after the loss of reputation (i.e.

Fujiya Co Ltd due to the lack of health and safety measurements11). When it comes

to the second factor, a “constructive” pressure by International Organizations,

Japan, being a developed country, was very responsive and compliant with

regulations and standards that were imposed on by international organizations. It is

notable that Japan is the leading country in terms of the number of certificates held

on ISO 14001, at 23,466 (Source: ISO Survey 2006), which is just one and a half

less than what the entire European Union area holds (44,714)12. However, as this

will be discussed within the subsection that outlines the criticism of CSR (see: 2.2

Criticism Perspective on the subject of CSR), Japan is mentioned as an example

9 Author of this dissertation decided to use this specific phrase.

10Author of this dissertation decided to use this specific phrase.

11 http://uk.reuters.com/article/2007/01/15/idUKT26240620070115

12 International Organization for Standardisation (2010: Many standards such as ISO9001 and ISO14001 have been

created to measure a company‟s performance in areas elated to CSR. The ISO 26 000 was created to assist companies

in contributing to sustainable development and encourage them to go beyond “legal compliance”, because complying

with the law is duty of organization or company. The standard promotes common understanding in the field of CSR,

and complements other instruments and initiatives for CSR.

http://uk.reuters.com/article/2007/01/15/idUKT26240620070115

12

where dedication towards CSR in 1990 was done at the expense of economic

efficiency. The explanation for this lies in the fact that the mission of the majority

of Japanese businesses was to “maintain employment and to distribute business

results as fairly as it could to its core stakeholders” (Tanimoto (2004), p. 152). The

subsequent section will briefly synthesize a research stream from the crisis period

that has not been supportive of CSR as a concept.

2.2 Criticism Perspective on the subject of CSR

By analysing academic sources in the field of CSR, we can see that

Khurana and Nohria (2008) have found that involvement in CSR activities is not

always beneficial. They emphasize that there are negative aspects of the term

“corporate conscience” and take the example of Japanese corporations during the

downturn of the Japanese economy in the 90s, when they were unable implement

cost cutting and redundancies programmes which could have enhanced overall

efficiency. Reich (2007) points out that CSR makes little or no difference to the

economic development: “corporate initiatives that...generate higher profits and

higher returns for investors, are not socially virtuous. They are just good

management practices that should- and given the competitive pressures of super-

capitalism, will-be undertaken regardless of how much or how little they benefit

society” (p. 173). Moreover, Ashman and Winstanley (2007) state that the

“abstract nature of CSR brings companies into situations whereby they become

accused of manipulating with CSR activities in their attempt to shift attention from

irresponsible behaviours” (pp. 83-95).

13

2.3 Research Gap Identification

According to Lockett et al. (2006), a problem occurs when studying the

subject of CSR, which is related to the “strict dichotomy between empirical and

theoretical research which may not fully capture the role which empirical work

might play in theory building in CSR” (p. 118). Moreover, by the same line of

thinking, CSR is: “not simply driven by rational or experimental practices, but also

by business, social and political agendas...the field of CSR will be characterized by

a lack of convergence and, therefore the body of CSR research will remain

fragmented in terms of empirics, theory and (non) normative orientation” (p. 118).

Fundamentally, this dissertation identifies the research gap on the basis of three

arguments. Firstly, very little research has been published on CSR in the context of

the banking industry on a global scale, particularly Asia. Frynas (2006) suggests

that most research on CSR is either generalized about all developing countries, or

focused at a national, rather than regional level. Moreover, most of the research is

oriented towards CSR across various industry segments, including mining,

construction, food, transportation, as well as many others (Tsoutsoura, 2004). In

reference to banks explicitly, more research is available on a country specific and

segment specific scale. For instance, Rahman‟s and Iqbal‟s (2013) study on private

banks in Bangladesh reveals that CSR is important as a tool to gain competitive

advantages. They advocate that CSR activities do have a positive impact on

employees‟ behaviour, customers‟ behaviour and establishing a bank‟s image;

however they find that CSR practices are not diversified, particularly in Asia, as

banks are only concerned with some specific areas of CSR. However, Yunus

(2007) maintains that his discovery in Bangladesh –the exclusion of the poor by

the banks from the benefits of the financial system- is not restricted to the poorest

countries, but it exists everywhere.

14

Secondly, very little if any research has analysed the dynamics of CSR

activities throughout specific financial crises. Jacob‟s (2012) findings show that

the financial crisis of 2008 had a clear impact on CSR initiatives in many

companies because of the exceptional pressure that they had to face in order to

survive and with massive layoffs and expenditure cuts on CSR programmes being

the most obvious outcomes of the crisis. However, many CSR programmes were

pushed forward a few years after the crisis, such as initiatives directed towards

environmental issues, compensation policies and overall organizational

restructures. However, Jacob‟s (2012) multiple case-study is focused on MNCs

within the manufacturing sector (Atlas Copco13 and Sulzer14), which additionally

confirms the first argument within the identification of the research gap (p. 11),

that the research on CSR within the banking industry throughout the crisis is

almost inexistent. Therefore, our research is focusing on the dynamics and

impact of CSR activities, with a special focus on Asian banks over the most recent

financial crisis, as well as over the Asia specific crisis of 1997. Fukukawa (2010)

confirms that given that a relatively limited research is conducted on CSR within

the context of Asia, it is not “surprising that theorization remains weak” (p. 10).

Lastly, we believe that there is a lack of a concrete definition of CSR

within the banking sector. Broad definitions on corporate social performance were

offered by Wood (1991) according to which corporate social performance refers to

“business organisation‟s configuration of principles of social responsibility,

processes of social responsiveness and observable outcomes as they relate to the

firm‟s human, stakeholder and societal relationships” (page 693). Fukukawa and

Moon (2004) note that “it is increasingly hard to isolate CSR from mainstream

business and government regulation given the prominence of the “business case”

13 Atlas Copco provides efficient solutions in compressors, generators, construction and mining equipment and

industrial power tools: http://www.atlascopco.co.uk/ukus/

14 Sulzer is one of the world‟s leading pumps and pumping equipment manufacturers: http://www.sulzer.com/

http://www.atlascopco.co.uk/ukus/

http://www.sulzer.com/

15

and government incentives through soft regulation” (p. 46). Nevertheless, they

emphasize that CSR is still a particular area given “its focus on responsiveness to

and even anticipation of social agendas, and by increased attention to social

performance”. More recent research by Waddock (2009) defines Corporate Social

Performance (CSP) as “the broad array of strategies and operating practices that a

company develops in its efforts to deal with and create relationships with its

numerous stakeholders and the natural environment” (p. 2). A recent study by

PwC15 in India indicates that the practice of CSR in India still remains within the

philanthropic space, and that there is limited documentation or records on specific

CSR activities16. However, if there is a lack of clear understanding on what is

considered a consistent CSR activity within the banking and financial services

industry, can the CSR impact be appropriately measured? Can dedication to CSR

be mirrored only in banks‟ activities related to preserving art, protecting the

environment, or activities to reduce global poverty? Measuring CSR becomes even

more complicated if a cross-cultural dimension is added; a consistent CSR activity

can be perceived to different extents in Europe versus Asia or the USA, or even

among different Asian countries themselves. Hofstede (1991), for example, defines

culture as “the way that we behave, which is different between nations” (p. 13). A

very recent research study by the World Bank has found that countries with similar

levels of income often display very different levels of financial inclusion: “The

main reason for this disparity is government policy...In slums in India or Nigeria

many people are unable to provide birth certificates or utility bills to meet onerous

requirements aimed at preventing money laundering. In other countries,

discriminatory laws, such as restrictions on the ability of women to enter into

contracts (and hence open bank accounts), contribute to the considerable gender

gap in access to banking (...)”. (The Economist, 2014, November, 15th, p.26).

15 PricewaterhouseCoopers is one of the largest audit and consultancy firms worldwide.

16Handbook on Corporate Social Responsibility in India. Published by PWC: www.pwc.in

http://www.pwc.in/

16

By synthesizing the three arguments above, the research gap for this

dissertation is graphically marked in dark blue in Figure 2-1 below.

Figure 2-1: Research Gap Identification (indicated in dark blue)

In order to elaborate what is considered to be a consistent CSR activity by

top management within the banking industry, we apply an empirical analysis. Our

empirical analysis within this dissertation focuses on the collection of CSR

announcements by CEOs and top management of the world biggest banks

representing our sample. Three themes that this dissertation covers are presented

within Figure 2-2 below.

17

Figure 2-2: Dissertation Focus: Three Themes

The collection of announcements is outlined in detail within the

methodology section of the dissertation alongside the hypothesis we are testing

(Section 3.4). The findings of this dissertation should contribute to the “emergent

theories” on CSR. When it comes to the case study, which represents the third

theme of this dissertation, we have direct access to the CSR department and data of

Barclays, the second largest bank in the UK, with strong presence in Asia. As a

sampling case Barclays represents an interesting context that can help us to explore

the existing management research on CSR and further enhance the understanding

of the subject.

2.4 Research Question(s)

The main research question is integrated within the title of this

dissertation: Corporate Social Responsibility (CSR) within the banking industry

throughout financial crises: Focus on banks in Asia during two financial crises:

1997 and 2008. Fundamentally this dissertation tries to answer the following

rephrased question: What is the extent to which banks engaged in CSR activities at

the peak of the financial crises, with particular focus on banks in Asia? Another

variation of the main research question could be: How do constituents of the

banking industry commit to the concept of CSR throughout the financial crises,

with particular focus on banks in Asia? This main research question could be

divided further in the following narrower five sub-questions:






(1997)




Theme 1 Theme 2 Theme 3

18

1. What were the evolutionary perspectives and value drivers for CSR

commitment within the banking industry throughout the Asian crisis of

1997 and the most recent financial crisis of 2008?

2. What were the dynamics of CSR initiatives/activities and share price of

the largest banks throughout the crises?17

3. What is the institutional framework for CSR in Asia and what was the

comparative perspective on CSR throughout the Asian crisis of 1997 vs.

the most recent financial crisis of 2008?

4. How did one of the largest banks globally18 approach the concept of CSR

throughout the financial crises? Overview of CSR commitment at

corporate strategy level as well as day to day practices.

5. What is the future of CSR within the banking industry from the

perspective of Barclays? How does Barclays management align

stakeholders‟ expectations and the concept of CSR at the strategic level?

17 This sub-question also has an emphasis on banks in Asia.

18 This refers to the case study of Barclays, which belongs to the Theme three of the dissertation: CSR Dynamics

Throughout both 1997 and 2008 crises: Case Study with Features of Grounded Theory.

19

3. Methodology

3.1 Research Design

This dissertation uses mixed-method research design, as it is combining

quantitative and qualitative elements. Quantitative elements are evident in the

theme one of the dissertation (CSR and banks in Asia throughout the most recent

financial crisis (2008)), in which we are providing event study; and also assessing

dependency between CSR activities and banks‟ share price within the sample by

using regression analysis. Qualitative elements are covering theme two19 (CSR and

banks in Asia throughout the Asian crisis (1997)) and theme three (CSR

throughout both 2008 and 1997 crises: Case Study of Barclays) of the dissertation.

This is presented in full detail in Figure 3-1 below. It is important to make a

distinction between the term “case study” and “qualitative research”. The main

reason is that providing theoretical insights from case study can involve qualitative

data only, quantitative data only or both qualitative and quantitative data (Yin,

1981). Qualitative data can lead to beneficial results particularly if there is the

ability to collect qualitative data to offer certain insights, which cannot be easily

revealed by quantitative data. Given that the case study in this dissertation uses

mainly qualitative data, we are using these terms jointly in the following form:

qualitative analysis/case study.

In this dissertation, quantitative and qualitative methods complement each

other: “each set of data are collected, analysed and presented separately in order to

support the interpretation and conclusions reached. In this way, the quantitative

19 Given data incompleteness for the period of 1997, event study and regression analysis were not performed. Hence

we decided to perform qualitative analysis on the back of available data and build qualitative frameworks (Section

3.4).

20

data collected in this event are used quantitatively whilst the qualitative data are

analysed qualitatively” (Saunders et al., 2012, p. 166). However, the qualitative

and quantitative methods used in this dissertation are integrated to some extent. In

terms of integration, there are instances when qualitative data is “quantitised”

(Saunders et al., 2012). This step is particularly evident prior to running regression

analysis, once total score for CSR activities by banks within the sample had been

defined, using qualitative statements of banks‟ CEO20 as inputs. Furthermore, this

phenomenon is evident within theme three, in which we are “borrowing” coding

technique from grounded theory method and applying it within our case study.

Bryaman (2006), Greene et al. (1989), Molina-Azorin (2010) as well as

Saunders (2012) have provided reasons for using a mixed methods design. We

have adjusted these for the purpose of this dissertation (Table 3-1).

20 We collected announcements by CEOs of the banks from the sample. These are available in Tables 3-7 and 3-8.

21

Table 3-1: Reasons for using mixed-method design for this dissertation (Source:

Developed from Saunders et al. (2012), p. 169, and authors‟ experience.)

Reason Explanation

Initiation It helps better understand contextual background and research problem. Data collection for the purpose of defining total CSR score helps in the preparation of the structure of interview questions and selection of participants.

Facilitation During the course of the research, event study and regression analysis led to discovery of new insights which are followed through the use of the case study method.

Complementarity Use of mixed methods offers thorough illustration and elaboration of findings for such an emergent topic as CSR.

Interpretation Qualitative method/Case Study expands and explains the relationship between variables emerging from the quantitative method (i.e. dependency of share price on CSR activities).

Generalizability Producing more complete knowledge.

Diversity Incorporating different views, particularly when it comes to theme three (case study on Barclays).

Problem solving Given that a concrete definition of CSR represents one of the research gaps, integrating two methods help explain results particularly in instances in which complete data are unavailable.

Focus In this dissertation, the quantitative method is focused more on CSR of global banks around the time of global crises, while case study method is focused on a case study of Barclays and its dynamics with CSR.

Confidence Greater confidence in conclusions, particularly given difficulty in measuring CSR, and finding data for certain CSR actions.

In effect, the use of quantitative method in theme one is followed up by

the qualitative method in the other two themes with the intention to expanding

initial results. In business research literature, this is known as “sequential

explanatory research” (Saunders et al, 2012), where a quantitative method is

followed by a qualitative one.

22

Figure 3-1: Mixed-method Breakdown for the Themes of the Dissertation

23

3.2 Data collection and Sample

3.2.1 CSR and banks in Asia throughout the most recent financial

crisis (2008)

Figure 3-2: Dissertation Themes. Highlighting Theme One

We used Bloomberg21 in order to download data for themes one and two

of this dissertation. Data for this theme are filtered in order to rank global banks

according to their total assets on 15th September 2008. Given that research is

assessing the relationship between banks and the concept of CSR throughout the

crisis period, we selected that particular date as it represents the peak of the most

recent financial turmoil (i.e. Lehman Brothers declared bankruptcy on Friday,

2008, September, 12th22). The sample consists of 25 global banks, and the

breakdown in terms of names as well as total assets is outlined as per Table 3-2

below.

21 Bloomberg is a premier site for business and financial market news. Personnel working at Bloomberg premises in

London were extremely helpful throughout the data collection process, as they provided us with guidance on the most

efficient ways of filtering sets of historical data.

22 Lehman Brothers was the fourth-largest US investment bank. Prior to the bankruptcy event, it was considered to be

to be Too-Big-To-Fail (TBTF). After incurring billions of dollars losses in the US mortgage markets, it filed for

bankruptcy (Chapter 11). The dramatic effect of this event received wide media coverage:

http://news.bbc.co.uk/1/hi/business/7615931.stm






(1997)


the 1997 and 2008 crises: Case

study of Barclays Bank



24

Table 3-2: Global Banks Ranked by Total Assets on September 15, 2008 (Source

Bloomberg)

Long Name Short Name Total Assets (USD)

Deutsche Bank AG DEUTSCHE BANK-RG 2,814,237,938,794.25

Mitsubishi UFJ Financial Group Inc. MITSUBISHI UFJ F 2,805,970,063,736.71

Industrial and Commercial Bank of China Ltd.

IND & COMM BK-A 2,763,554,435,829.81

HSBC Holdings PLC HSBC HLDGS PLC 2,721,061,011,456.00

Barclays PLC BARCLAYS PLC 2,583,087,767,252.27

BNP Paribas SA BNP PARIBAS 2,492,298,868,346.25

Credit Agricole SA CREDIT AGRICOLE 2,470,646,919,351.62

JPMorgan Chase & Co. JPMORGAN CHASE 2,321,284,071,424.00

Royal Bank of Scotland Group PLC ROYAL BK SCOT 2,224,097,054,363.94

Bank of America Corp. BANK OF AMERICA 2,166,162,063,360.00

Mizuho Financial Group Inc. MIZUHO FINANCIAL 2,125,252,379,548.22

China Construction Bank Corp. CHINA CONST BA-H 2,115,320,506,768.97

Agricultural Bank of China Ltd. AGRICULTURAL-A 2,077,996,952,888.74

Bank of China Ltd. BANK OF CHINA-H 2,018,157,058,515.28

Citigroup Inc. CITIGROUP INC 1,931,346,051,072.00

Sumitomo Mitsui Financial Group Inc. SMFG 1,789,857,802,099.58

Banco Santander SA BANCO SANTANDER 1,674,693,871,828.44

Societe Generale SA SOC GENERALE SA 1,650,059,436,326.06

Lloyds Banking Group PLC LLOYDS BANKING 1,528,403,351,275.88

UBS AG UBS AG-REG 1,458,324,447,631.28

Wells Fargo & Co. WELLS FARGO & CO 1,374,714,986,496.00

UniCredit SpA UNICREDIT SPA 1,247,880,159,662.44

Credit Suisse Group AG CREDIT SUISS-REG 1,090,000,041,896.27

Nordea Bank AB NORDEA BANK AB 915,469,450,233.84

Commerzbank AG COMMERZBANK 869,853,653,737.31

25

3.2.2 CSR and banks in Asia throughout Asian crisis (1997)

Figure 3-3: Dissertation Themes. Highlighting Theme Two

Data for this theme of the dissertation were collected by using the

analogous data collection process as for theme one of this dissertation. The event

that is considered to mark the birth of the Asian crisis was the Thai government‟s

decision to devalue its national currency on 1997, July, 2nd. We filtered 25 of the

largest global banks in 1997 according to their total assets. By observing the 25 top

banks in the world on July 2, 1997, it is interesting to note that five banks from

Asia were in the top 25 and all of these were from Thailand, the country of the

crisis outbreak which witnessed the most dramatic consequences.






(1997)





26

Table 3-3: Global Banks23 Ranked by Total Assets on July 2, 1997 (Source:

Bloomberg)

Long Name Short Name Total Assets (USD)

Fannie Mae FANNIE MAE 351,040,995,328.00

BNP Paribas SA BNP PARIBAS 333,617,417,946.95

Freddie Mac FREDDIE MAC 173,865,992,192.00

The PNC Financial Services Group Inc. PNC FINANCIAL SE 69,661,999,104.00

KeyCorp KEYCORP 65,356,001,280.00

Bank Of Greece BANK GREECE 50,896,258,489.45

SunTrust Banks Inc. SUNTRUST BANKS 49,632,690,176.00

Bangkok Bank Public Co. Ltd. BANGKOK BANK PUB 44,431,188,773.64

Banco Bradesco SA BRADESCO SA-PREF 37,328,630,532.08

Comerica Inc. COMERICA INC 34,341,746,688.00

Krung Thai Bank PCL KRUNG THAI BANK 27,907,818,328.01

Kasikornbank PCL KASIKORNBANK PCL 25,180,560,304.58

BB&T Corp. BB&T CORP 21,096,556,544.00

Huntington Bancshares Inc. HUNTINGTON BANC 20,565,805,056.00

The Siam Commercial Bank PCL SIAM COMM BK PCL 20,308,668,334.72

Fifth Third Bancorp FIFTH THIRD BANC 20,086,988,800.00

Regions Financial Corp. REGIONS FINANCIA 18,731,419,648.00

Popular Inc. POPULAR INC 16,755,577,856.00

Bank Of Ayudhya PCL BANK AYUDHYA PCL 16,171,451,413.60

Bank of Hawaii Corp. BANK OF HAWAII 13,780,472,832.00

M&T Bank Corp. M&T BANK CORP 12,820,611,072.00

23 The sample for the 1997 crisis was more difficult to obtain in comparison to the period associated with the most

recent financial crisis (2008). As a result of continuous narrowing down of the sample, we could not filter banks

solely. As a result, this sample consists of entities which were active within the financial services industry, but do not

represent banks (i.e., Freddie Mac, Fannie Mae). However, given the importance of these entities for the world

economy throughout the crisis period and their size in terms of total assets, we decided to include them in our sample.

27

3.2.3 CSR Dynamics throughout both the 1997 and 2008 crises: Case

study of Barclays

Figure 3-4: Dissertation Themes. Highlighting Theme Three

For theme three of the dissertation, we opted for a Case study approach

given that additional theoretical insights could emerge from this dissertation. This

is in line with the research gap we identified and outlined in the Chapter two of the

dissertation (Literature Review and Research Gap Identification). As previously

addressed, in spite of the available research on the broad concept of CSR, not

enough attention has been paid to CSR within the context of the banking industry,

particularly in relation to the period of financial crises. The rationale for choosing

Barclays as a sampling case can be explained through the following three

arguments: Firstly, Barclays has a history of strong ties with Asia (i.e. it financed

the construction of Hong Kong underground back in 1980) and it has gone through

several strategic expansion phases related to the Asian continent. As an example,

the Barclays‟ management communicated in 2007 that their target was to double

the Asian revenue by 201324; they also saw the most recent financial crisis

significantly less impactful on the Asian economy, than the crisis of 1997.

Secondly, Barclays is the second largest bank in the UK25, which significantly

24 From interview with Ivan Ritossa, member of Barclays Executive Committee:

http://articles.economictimes.indiatimes.com/2007-11-28/news/28442675_1_barclays-capital-asian-markets-credit-

markets 25 The largest UK bank is HSBC, with assets totalling 2.7bn USD vs. Barclays 2.4bn USD at the time of writing this

dissertation






(1997)





http://articles.economictimes.indiatimes.com/2007-11-28/news/28442675_1_barclays-capital-asian-markets-credit-markets

http://articles.economictimes.indiatimes.com/2007-11-28/news/28442675_1_barclays-capital-asian-markets-credit-markets

28

increased its balance sheet post acquisition of certain assets of Lehman Brothers at

the peak of financial crisis in 200826. Ultimately, the important argument relates to

the fact that in the recent period Barclays has been going through the public

scrutiny for its irresponsible behaviour, as a result of various corporate scandals.

Those events which have damaged the bank‟s reputation over the last two years

are summarized in Table 3-4 below. Moreover, Barclays has announced

fundamental changes in its corporate culture since the summer of 2012, after the

outbreak of the Libor scandal. Since the outbreak of these events, the bank has

been strongly communicating (both to internal as well as external stakeholders) its

emphasis on improving the range of activities within the CSR context27.

Table 3-4: Overview of recent banks reputational scandals (source: Multiple

Sources of Data)

Timeframe Description Total number of banks involved

Estimated Fine

Summer 2012 Libor Fixing 16 290m GBP

Summer 2013 EU Anti-Trust Complaint 8 3bn GBP

Fall 2013 Manipulation of FX fixing price 15 1.5bn GBP

Spring 2014 Manipulation of gold fixing price 1 26m GBP

Summer 2014 “Dark Pool” Fraud Allegations 1 38m GBP

26 Given the lower exposure to the mortgage market, Barclays was one of the rare players within financial services

industry that went smoothly through the initial stages of the crisis outbreak. Barclays bought some of the core North

American assets of Lehman Brothers by following the credo „crisis as opportunity‟. This was thoroughly represented

in media: http://news.bbc.co.uk/1/hi/business/7620306.stm

27 It appears that Barclays felt the effects of the crisis more in 2012 than in 2008, when it had minimal exposure to the

risky mortgages. In 2012, Barclays was one of the banks that were accused of manipulation of the Libor fixing rate

from 2005 through 2009. Under pressure from the British Government, media and shareholders, Barclays‟ CEO and

his team resigned in summer 2012 and the company acknowledged restructure of its business strategy, with strong

emphasis on citizenship and formulation of new values such as : Excellence, Service, Integrity, Stewardship and

Respect:

http://www.reuters.com/article/2012/06/27/us-barclays-libor-idUSBRE85Q0J720120627

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9808042/Antony-Jenkins-to-staff-adopt-new-

values-or-leave-Barclays.html


http://www.reuters.com/article/2012/06/27/us-barclays-libor-idUSBRE85Q0J720120627

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9808042/Antony-Jenkins-to-staff-adopt-new-values-or-leave-Barclays.html

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9808042/Antony-Jenkins-to-staff-adopt-new-values-or-leave-Barclays.html

29

In terms of data collection for the purpose of the case study, as Thai,

Chong and Agrawal (2012) suggest, sources of evidence will be documentation,

archival records as well as interviews. Our interviewees are with senior managers

who are deeply involved with the key decision making process related to CSR

activities. We interviewed senior managers within the CSR department at the

company‟s headquarters level as well as the entire CSR workforce in Asia where

Barclays established Community Investment Units28. This is in line with the

methods suggested by Shook, Ketchen and Cycyota (2003), given our belief that

such types of interviewees are the most knowledgeable sources of first-hand

information. Moreover, the author of this dissertation has been a full-time

Barclays‟ employee since 2008, and has witnessed these significant changes within

the firm. Therefore, by effectively being a “member of the same institutional

context”, it will certainly be helpful to understand the dynamics behind

respondents‟ inputs (Peterson, 2004).

Table 3-5: Minimum non-probability sample size (Source: Saunders, 2012, p.

283).

Nature of the study Minimum Sample Size

Semi structure/in-depth interviews 5-25

Ethnographic 35-36

Grounded theory 20-35

Considering a homogenous population 4-12

Considering a heterogeneous population 12-30

For the case study method, we obtained thirteen interviews in total. This

number satisfies criteria for semi structured/ in-depth interviews as well as criteria

related to a homogenous population. According to Guest et al (2006), thirteen

28 Community Investment Units: In terms of headcount, two employees are based in Singapore with regional

oversight, two in India and one in Pakistan with in-country responsibilities. It is noteworthy that the global head of

Citizenship for Barclays sits in Hong Kong.

30

interviews should suffice given our focus on a homogenous group of interviewees:

all being employees of Barclays. Moreover, given that we are not entirely using

grounded theory method, but rather some of its features (coding mechanism), this

sample number should still be appropriate.

The time lapse between the completions of the first versus the last

interview is circa two and a half months (November 6, 2014 vs. January 15, 2015).

Interviews were scheduled to last half-an-hour and were composed of eight open-

ended questions on average. We would modify eleven main questions and ask

adjusted questions in the context of the CSR specifics related to the department for

which each interviewee works as well as individual responsibility and track record

in terms of CSR commitment29. Overview of main eleven open-ended interview

questions is as follows:

1. What are the examples of CSR activities that your department engages

in?30

2. What are the examples of CSR activities in other countries in Asia where

you have business presence, but not established specific CSR centres?

3. To what extent are activities from your department rolled out over other

Barclays subsidiaries worldwide?31

29 As an example, interviewee S. K from India, was one of the winners of Barclays “Make a Difference Campaign”.

Prior to interviewing him, we conducted thorough research on his volunteering activities and adjusted generic

questions accordingly (i.e. CSR in the context of India). This complements the “snow-ball” sampling technique, given

that further contacts were made through the original sample (Bryman and Bell, 2007, p. 200).

30 For example when interviewing V. R. K from India (interview 2), we modified the question as follows: What are the

examples of CSR activities in Singapore vs. India? On what basis do you select activities to emphasize in respective

countries? This is because interviewee is based in Mumbai, while her management is based in Singapore.

31 Question directed to employees based in Barclays headquarters in London.

31

4. To what extent are you involved in CSR activities in Asia? What is your

interaction with colleagues from Community Investments Units in Asia?32

5. How do you assess the impact of the most recent financial crisis on the

CSR activities?

6. What are the programmes that your specific Barclays CSR centre in Asia

has been focused on since the outbreak of the 2008 crisis? Please rank

from 1-3 (1: lowest, 3: highest grade). Please justify your grading in few

words.

Invest in Talent: 1 2 3

Disaster Recovery: 1 2 3

Environment: 1 2 3

Other (if so please specify categorization): N/A

7. What was the impact of the 1998 Asian crisis on CSR activities in Asia?

What are the programmes that your CSR centre focused on as a response

to the Asian crisis of 1998? Please rank from 1-3 (1: lowest, 3: highest

grade).

Art, culture and media support: 1 2 3

Support for families (social programmes)

and helping SMEs: 1 2 3

Environmental concerns: 1 2 3

Other (if so please specify categorization): N/A

32 Question directed to employees based in Barclays headquarters in London.

32

8. Which macroeconomic parameters are inversely correlated to CSR

activities? (i.e. do you think that poverty reduction in countries leads to

more or fewer CSR activities)?

9. Do you consider ethical responsibilities as being expected /desirable by

society or being obligatory? How does it compare across countries?

10. Could CSR generate a comparative advantage for banks in going forward

given the change in banking industry landscape?

11. On an individual level, what has driven you to opt for a job role within

the CSR department of Barclays‟ headquarters instead of doing for

example corporate and investment banking?

Table 3-6 below depicts all thirteen interviews in timeline order of

interview completion dates. It also outlines details with respect to the interview set

up process. Entire transcripts of all the interviews are available in Appendix A.

Table 3-6: The Interview Process. Details.

Interviewee Position Location Request

for Interview

Follow up

Interview completion

date Mean

Wendy Lai

Head of Community Investment

Asia

Singapore June 6, 2014

June 9

Nov 6 Telephone July 7

July 15 - 17

Nov 3

Vasanth Renu Kumar

Vice President Mumbai,

India Nov 6, 2014

Nov 10

Nov 17 Video

Conference Community Investment

Nov 13

Marsha Kutkevitch

Managing Director,

Central Asia coverage

London, UK Oct 5, 2014

Nov 12

Nov 17 In-Person

Nov 15

Paul Findlay

Community Investment,

UK Colleague Engagement,

Brand and Marketing

Business Area

London, UK Nov 17,

2014

Nov 20

Nov 28 In-Person

Nov 24

33

Interviewee Position Location Request

for Interview

Follow up

Interview completion

date Mean

Victoria Lowe

Global Community Investment: Brand and Marketing

Business Area

London, UK Nov 28,

2014

Nov 28

Dec 19 In-Person Dec 9 - 10

Dec 18

Suhas Kirloskar

COO-team Mumbai,

India Nov 20,

2014 Jan 8 Jan 10 Telephone

Barclays India

Kate Hyson

Group citizenship-

Thought Leadership

London, UK Nov 17,

2014 Jan 8 - 9 Jan 9 In-Person

Kate Millar

Vice President, Thought

Leadership and Innovation

London, UK Jan 8, 2015 Jan 9 Jan 12 In-Person

Suhas Kirloskar

COO team Mumbai,

India Nov 20,

2014 Jan 8 Jan 10 Telephone

Barclays India

Suzy Bourne

Colleague Engagement

Business Partner

Hampshire, UK

Oct 6, 2014

Jan 9

Jan 13 Telephone

Jan 12

Nazreem Visram

Head of Citizenship, Corporate

bank

London, UK Jan 9, 2015 Jan 9 - 13 Jan 14 In-Person

Bryant Lewis

Deputy Head of Citizenship,

Investment Bank

New York, USA

Jan 9, 2015 n/a Jan 14 Telephone

Rachel Quinn Associate

Community Investment

London, UK Nov 17,

2014

Nov 20

Jan 15 In-Person

Nov 24

Nov 27

Dec 3

Dec 9

Dec 19

Jan 8

34

3.3 Establishing CSR measures

Within the Literature Review and Identifying Research Gap section we

mentioned the following: (...) “if there is a lack of clear understanding on what is

considered consistent CSR activity within banking and financial services industry,

can CSR impact be appropriately measured? (...)”. A notable example of an

attempt to define CSR measures in the context of financial services can be found in

2007, when the International Federation of Accountants established International

Good Practice Guidance – Defining and Developing and Effective Code of

Conduct for Organizations. This code of conduct is defined as “ principles, values,

standards, or rules of behaviour that guide the decisions, procedures and systems

of an organization in a way that (a) contributes to the welfare of its key

stakeholders, and (b) respects the rights of all constituents affected by its

operations” 33(p. 6). However, despite this appealing definition, it has not been

elaborated whether and how complying with this definition is tested in practice. In

this dissertation, through multiple sources, we collected announcements made by

the CEOs and top management of the institutions from the sample.

33 Professional Accountants in Business Committee – International Good Practice Guidance: Defining and Developing

an Effective Code of Conduct for Organizations (June 2007):

http://www.ifac.org/sites/default/files/publications/files/Defining-and-Developing-an-Effective-Code-of-Conduct-for-

Orgs_0.pdf

http://www.ifac.org/sites/default/files/publications/files/Defining-and-Developing-an-Effective-Code-of-Conduct-for-Orgs_0.pdf

http://www.ifac.org/sites/default/files/publications/files/Defining-and-Developing-an-Effective-Code-of-Conduct-for-Orgs_0.pdf

35


crisis (2008)

In terms of the sources of evidence for banks from the sample, various

press releases, annual reports, as well as sustainability reports and other

documentation were screened, with the aim of understanding to what extent the

banks engaged in CSR activities at the peak of the financial crisis. The exact dates

of announcements related to CSR activities as well as characteristics of CSR

activity for institutions listed as sample in Table 3-1 are summarized in Table 3-7

below.

Table 3-7: Announcements on CSR Activities by Top 25 banks Worldwide in

2008 (Multiple Sources of Evidence)

Entity-Short Name Date of announcement Announcement

DEUTSCHE BANK-RG

June 10, 2008 Change in motto: More than Money: Building Social

Capital

Sep 01, 2008 Carbon Neutral

Nov 23, 2008 Middle East Foundation

MITSUBISHI UFJ F July 19, 2008 Next Generation Leaders Training Programme for

Asia and Pacific

IND & COMM BK-A May 15, 2008 Disaster recovery post-earthquake

HSBC HLDGS PLC

Oct 24, 2008 HSCBC financing business going green

Nov 05, 2008 HSBC launches first CSR index in Asia

BARCLAYS PLC Nov 10, 2008 Barclays – UNICEF Partnership

BNP PARIBAS

May 07, 2008 European Federation for Ethics and Sustainable

Development Award

June 03, 2008 Announcement on Micro financing activities

Sep 12, 2008 BNP selected in DJSI World and DJSI Stoxx

indices for CSR investments

Nov 27, 2008 Launch of European low carbon index

CREDIT AGRICOLE Feb 18, 2008 Grameen Credit Agricole Foundation

JPMORGAN CHASE N/A N/A

ROYAL BK SCOT May 15, 2008 Sichuan Earthquake in China donation

BANK OF AMERICA June 25, 2008 Energy Efficiency Programmes

36

Entity-Short Name Date of announcement Announcement

Aug 09, 2008 Opening of family centre in China

Sep 12, 2008 Eco-deduct programme

Sep 22, 2008 Support of New Climate Programmes

MIZUHO FINANCIAL July 25, 2008 Renewable energy cooperation between Japan and

Bulgaria

CHINA CONST BA-H

June 03, 2008 CSR investment post-earthquake

June 19, 2008 CSR investment post flooding

AGRICULTURAL-A N/A N/A

BANK OF CHINA-H N/A N/A

CITIGROUP INC

Mar 24, 2008 Establishment of Citi Foundation

Aug 01, 2008 National Youth Award from President of Singapore

Aug 25, 2008 Focus on microfinance programmes in Asia

SMFG Mar 26, 2008 Establishment of CSR department

BANCO SANTANDER Sep 22, 2008 Announcement of dedication to CSR activities in

Latin America

SOC GENERALE SA

Mar 26, 2008 Carbon credit Index

Aug 14, 2008 SocGen joins Equator principles

Nov 20, 2008 Launch of first Chinese responsibility fund

LLOYDS BANKING May 07, 2008 Best Financial Services Award for ethical

performance

UBS AG-REG Sep 24, 2008 Introduction of Responsible Supply Chain

Management (RSCM)

WELLS FARGO & CO N/A N/A

UNICREDIT SPA Dec 04, 2008 Announcement on dedication to CSR on

Confindustria meeting

CREDIT SUISS-REG

June 05, 2008 Cutting greenhouse emissions

Sep 04, 2008 Establishing international CSR advisory board

NORDEA BANK AB Sep 02, 2008 Eco-footprint establishment

COMMERZBANK N/A N/A

37

Once CSR initiatives were synthesized, scoring mechanism was applied

for CSR activities outlined in Table 3-7 (Announcements on CSR Activities by

Top 25 Worldwide in 2008). The following grading scale was employed on the

basis of the type of announcements:

3 being highest grade: CSR announcement with Global Impact

2 being medium grade: CSR announcement related to local, regional and

core, home market

1 being low grade: CSR announcement related to local or non-core market

Once the score was assigned per each CSR activity, we compiled the

cumulative scores for each among the 25 banks for theme one of the dissertation:

CSR and banks in Asia throughout the most recent financial crisis (2008) (Table 3-

8), and for Thai Banks belonging to the sample for the theme two of the

dissertation: CSR and banks in Asia throughout Asian crisis (1997) (Table 3-10).

Table 3-8: CSR Activities Scoring: CSR and banks in Asia throughout the most

recent financial crisis (2008)

Entity-Short Name Announcement Score Total score

DEUTSCHE BANK-RG

Change in motto More than Money: Building Social Capital 3

7 Carbon Neutral 3

Middle East Foundation 1

MITSUBISHI UFJ F Next Generation Leaders Training Programme for Asia and

Pacific 2 2

IND & COMM BK-A Disaster recovery post-earthquake 2 2

HSBC HLDGS PLC HSBC financing business going green 3

5 HSBC launches first CSR index in Asia 2

BARCLAYS PLC Barclays Unicef Partnership 3 3

BNP PARIBAS

European Federation for Ethics and Sustainable Development Award

3

11 Announcement on Micro financing activities 2

BNP selected in DJSI World and DJSI Stoxx indices for CSR investments

3

Launch of European low carbon index 3

CREDIT AGRICOLE Grameen Credit Agricole Foundation 3 3

38

Entity-Short Name Announcement Score Total score

JPMORGAN CHASE N/A 0 0

ROYAL BK SCOTLAN Sichuan Earthquake in China donation 1 1

BANK OF AMERICA

Energy Efficiency Programmes 3

9 Opening of family centre in China 1

Eco-deduct programme 2

Support of New Climate Programmes 3

MIZUHO FINANCIAL Renewable energy cooperation between Japan and Bulgaria 1 1

CHINA CONST BA-H CSR investment post-earthquake 2

4 CSR investment post flooding 2

AGRICULTURAL-A N/A 0

BANK OF CHINA-H N/A 0

CITIGROUP INC

Establishment of Citi Foundation 3

7 National Youth Award from President of Singapore 2

Focus on microfinance programmes in Asia 2

SMFG Establishment of CSR department 3 3

BANCO SANTANDER Announcement of dedication to CSR activities in Latin America 2 2

SOC GENERALE SA

Carbon credit Index 3

7 SocGen joins Equator principles 2

Launch of first Chinese responsibility fund 2

LLOYDS BANKING Best Financial Services Award for ethical performance 3 3

UBS AG-REG Introduction of Responsible Supply Chain Management

(RSCM) 3 3

WELLS FARGO & CO N/A 0

UNICREDIT SPA Announcement on dedication to CSR on Confindustria meeting 3 3

CREDIT SUISS-REG

Cutting greenhouse emissions 3

6

Establishing international CSR advisory board 3

NORDEA BANK AB Eco-footprint establishment 3 3

COMMERZBANK N/A 0 0

39

Table 3-9: CSR score for Asian banks throughout the most recent financial crisis

Entity-Short Name Date of

announcement Announcement

CSR score

MITSUBISHI UFJ F June 19, 2008 Next Generation Leaders Training Programme for

Asia and Pacific 2

IND & COMM BK-A May 15, 2008 Disaster recovery post-earthquake 2

MIZUHO FINANCIAL July 25, 2008 Renewable energy cooperation between Japan

and Bulgaria 1

CHINA CONST BA-H

June 03, 2008 CSR investment post-earthquake 2

June 19, 2008 CSR investment post flooding 2

AGRICULTURAL-A N/A N/A

BANK OF CHINA-H N/A N/A

SMFG Mar 26, 2008 Establishment of CSR department 3

Once Asian banks are filtered as per Table 3-9, it implies that the average

CSR score for Asian banks is strong at 2, which means that at the start of the most

recent crisis; Asian banks were predominantly focusing on CSR activities within

their home market. To illustrate the initiatives that obtained the highest score, the

following two examples relating to the extent of their CSR activities were selected:

For instance, SMFG emphasized the creation of a CSR department, which

since then has been communicating commitment to issues of global importance,

i.e. environment, declining birth-rates in a large number of Asian countries and the

aging of population as well as other issues related to globalization.

It is also worth addressing Credit Agricole‟s CSR initiative, given its

focus on the Grameen Foundation, which works on eradicating and preventing

poverty in Asia. Recent data shows that thanks to this foundation the total saving

portfolio of microfinance in the Philippines exceeds total loans. This initiative is

very important because it illustrates innovative ways of financing social

businesses. Credit Agricole is underwriting and managing the Danone

Communities Fund, whose profit is invested in the expansion of new social

businesses throughout the developing world, with the main focus on villages in

Asia. Shareholders of the fund are offered an option of a “social dividend”,

40

meaning that they get shares in the fund instead of cash. Undoubtedly, this

example is a practical implication of the Nobel Laureate Yunus‟ (2007) mission:

(...) “the immediate, positive response reinforces my conviction that social

business is an idea whose time has come-a concept that will unleash the pent-up

creativity of millions of people around the world who have long been eager to

apply their talents to solving our planet‟s most pressing problems but have lacked

institutional recognition for doing so” (p. 173). Graphically presented, the

clustering of CSR activities applied by Asian banks belonging to the top 25 list in

2008 is depicted in Figure 3-5 below.

Figure 3-5: Example of Tendency of CSR activities by top Asian banks in 200834

Example of Tendency of CSR activities by top Asian banks in 2008

34 It is notable that disaster recovery programmes are expected by societies in Asia, particularly given historical

incidents, such as tsunamis, typhoons, various earthquakes, etc. The Bhopal gas tragedy disaster in India (1984) is still

considered the worst industrial disaster the world has ever seen. The government figures refer to an estimate of 15,000

killed in total. Additional example is response to the Asian tsunami, which is mentioned as an exemplary case that

created pressure for CSR (Fernando, 2007).

41

3.3.2 CSR and banks in Asia throughout the Asian crisis (1997)

By applying the equivalent method of collecting CSR announcements for

theme two of the dissertation: CSR and banks in Asia throughout the Asian crisis

(1997), we found very few announcements available dating back to 1997, at the

peak of the Asian crisis. Therefore we focused our efforts on sourcing the

announcements related to banks in Asia, which in this case are banks of Thai

origin, representing 20% of the sample. When examining Thailand, it is

noteworthy that there is a reasonable amount of research on CSR activities

employed by multinational companies in Thailand (Chapple & Moon, 2011).

However, we find a gap similar to the one evidenced in the previous part of this

dissertation given that there is very little if any research covering the dynamics of

CSR within the banking context. Table 3-10 outlines the CSR initiatives of Thai

Banks. It is evident that CSR activities during this period were quite scarce and

mainly directed towards the support of environment and preserving the Thai

cultural heritage.

Table 3-10: CSR Activities Scoring: CSR and banks in Asia throughout the Asian

crisis (1997)

Entity-Short Name Activity Score Total CSR

Score

BANGKOK BANK PUB

SME‟s target partner (Puan Koo Kit SME) 2

4 Support for families facing social and

economic changes 2

KRUNG THAI BANK Art, culture and media support 1 1

KASIKORNBANK PLC n/a 1 1

SIAM COMM BK PCL

Environmental concerns 2

3

Cultural Foundation 1

BANK AYUDUHYA PCL Environmental concerns 2 2

42

Once applying the identified scoring mechanism for Thai Banks (Table 3-

10), representing 20% of the sample during the Asia crisis of 1997 (Table 3-3), we

obtained an average score of approximately 1.6, which implies that most activities

were quite specific, hence initiatives were directed towards their home market,

Thailand, the country that was hardest hit by the Asian crisis of 1997.

3.4 Most Recent Financial Crisis: Empirical Study

Figure 3-6: Dissertation Themes. Highlighting Theme One


crisis (2008). The Event Study

On the basis of the inputs from Table 3-9 (CSR scores for Asian banks

throughout the most recent financial crisis), we will assess the short term financial

impact of these CSR announcements. Asian banks are highlighted below,

accounting for circa 30% of the sample. We obtained a share price performance on

the day of announcement and share price day after each listed CSR announcement.

Furthermore, we considered performance for a one-week period after each of the

listed CSR announcements, in order to mitigate the sharp daily changes that may

have been a reaction to broader market disruption during the crisis period. This

data is shown in Table 3-11.






(1997)





43

Table 3-11: One day vs. one week Share Price Change Post CSR Announcement

(Source: Bloomberg)

Entity-Short Name

Date of announcement

Announcement Share price

Day after

Week after

1d change

1 week change

DEUTSCHE BANK-RG

June 10, 2008

Change in motto More than Money: Building Social Capital

88.19 86.9 89.04 -1.46% 0.96%

Sep 01, 2008 Carbon Neutral 77.56 78.45 77.35 1.15% -0.27%

Nov 23, 2008 Middle East Foundation

27.17 28.03 28.59 3.16% 5.24%

MITSUBISHI UFJ F

June 19, 2008

Next Generation Leaders Training Programme for Asia and Pacific

9.61 9.36 9.02 -2.64% -6.13%

IND & COMM BK-A

May 15, 2008 Disaster recovery post-earthquake

0.87 0.87 0.84 0.08% -2.81%

HSBC HLDGS PLC

Oct 24, 2008

HSCBC financing business

9.61 9.05 10.57 -5.88% 9.96%

Going green

Nov 05, 2008 HSBC launches first CSR index in Asia

10.82 10.23 9.19 -5.45% -15.12%

BARCLAYS PLC

Nov 10, 2008 Barclays Unicef Partnership

2.67 2.54 2.13 -4.55% -19.93%

BNP PARIBAS

May 07, 2008

European Federation for Ethics and Sustainable Development Award

104.33 103.25 106.44 -1.04% 2.02%

June 03, 2008 Announcement on Micro financing activities

96.58 95.95 91.44 -0.65% -5.32%

Sep 12, 2008

BNP selected in DJSI World and DJSI Stoxx indices for CSR investments

89 82.7 95.2 -7.08% 6.97%

Oct 27, 2008 Launch of European low carbon index

67.19 59.75 68.14 -11.07% 1.41%

CREDIT AGRICOLE

Feb 18, 2008 Grameen Credit Agricole Foundation

24.17 24.24 24.97 0.31% 3.29%

JPMORGAN CHASE

n/a

ROYAL BK SCOTLAN

May 15, 2008 Sichuan Earthquake in China donation

52.35 50.87 47.28 -2.82% -9.68%

44

Entity-Short Name



Day after

Week after

1d change

1 week change

BANK OF AMERICA

June 25, 2008 Energy Efficiency Programmes

26.61 24.81 22.54 -6.76% -15.30%

Aug 09, 2008 Opening of family centre in China

32.25 33.38 30.7 3.50% -4.81%

Sep 12, 2008 Eco-deduct programme

33.74 26.55 37.48 -21.31% 11.08%

Sep 22, 2008 Support of New Climate Programmes

34.15 33.3 30.25 -2.49% -11.42%

MIZUHO FINANCIAL

July 25, 2008

Renewable energy cooperation between Japan and Bulgaria

4.91 5.055 4.71 2.93% -4.07%

CHINA CONST BA-

H

June 03, 2008 CSR investment post-earthquake

0.85 0.842 0.813 -0.91% -4.30%

June 19, 2008 CSR investment post flooding

0.79 0.78 0.79 -0.74% 0.04%

AGRICULTURAL-A

N/A

BANK OF CHINA-H

N/A

CITIGROUP INC

Mar 24, 2008 Establishment of Citi Foundation

232.7 234.2 214.2 0.64% -7.95%

Aug 01, 2008

National Youth Award from President of Singapore

188.7 188.3 193.9 -0.21% 2.76%

Aug 25, 2008

Focus on microfinance programmes in Asia

176.1 178.4 191.1 1.31% 8.52%

SMFG Mar 26, 2008 Establishment of CSR department

71.58 69 71.96 -3.61% 0.53%

BANCO SANTANDE

R Sep 22, 2008

Announcement of dedication to CSR activities in Latin America

14.83 14.38 14.04 -3.07% -5.36%

SOC GENERALE

SA

Mar 26, 2008 Carbon credit Index

95.26 97.06 102.91 1.89% 8.04%

Aug 14, 2008 SocGen joins Equator principles

90.67 90.53 85.58 -0.16% -5.62%

Nov 20, 2008 Launch of first Chinese responsibility fund

38.04 32.7 40.19 -14.03% 5.65%

LLOYDS BANKING

May 07, 2008

Best Financial Services Award for ethical performance

4.35 4.3 3.96 -1.11% -9.04%

45

Entity-Short Name



Day after

Week after

1d change

1 week change

UBS AG-REG

Sep 24, 2008

Introduction of Responsible Supply Chain Management (RSCM)

18.45 19.31 17.55 4.75% -4.81%

WELLS FARGO &

CO N/A

UNICREDIT SPA

Dec 04,2008

Announcement on dedication to CSR on Confindustria meeting

11.04 10.13 11.6 -8.22% 5.08%

CREDIT SUISS-REG

June 05, 2008 Cutting greenhouse emissions

48.94 48.31 45.88 -1.28% -6.26%

Sep 04, 2008 Establishing international CSR advisory board

44.64 43.04 43.67 -3.58% -2.17%

NORDEA BANK AB

Sep 02, 2008 Eco-footprint establishment

10.71 10.54 10.61 -1.60% -0.87%

COMMERZBANK

N/A

46

Table 3-12: CSR Activities Total Scores and Share Prices in 2008 and 2013

(Source: Bloomberg)

Entity Total score

YE 2011 YE 2013 YE2008 % change 2008-2011

% change 2008-2013

DEUTSCHE BANK-RG 7 38.14 47.85 24.724 0.54 0.93

MITSUBISHI UFJ F 2 4.24 6.8 556 -0.99 -0.98

IND & COMM BK-A 2 0.67 0.59 3.577 -0.81 -0.83

HSBC HLDGS PLC 5 7.61 10.97 553.36 -0.98 -0.98

BARCLAYS PLC 3 2.52 4.5 138.83 -0.98 -0.96

BNP PARIBAS 11 39.33 78.11 28.91 0.36 1.7

CREDIT AGRICOLE 3 5.65 12.83 8.01 -0.29 0.6

JPMORGAN CHASE 0 33.25 58.48 29.78 0.11 0.96

ROYAL BK SCOTLAN 1 3.13 5.6 487 -0.99 -0.98

BANK OF AMERICA 9 5.56 15.57 12.94 -0.57 0.2

MIZUHO FINANCIAL 1 1.35 2.16 2.59 -0.47 -0.16

CHINA CONST BA-H 4 0.697 0.75 4.123 -0.83 -0.81

BANK OF CHINA-H 0 0.36 0.46 2.129 -0.82 -0.78

CITIGROUP INC 7 26.31 52.11 65.7 -0.59 -0.2

SMFG 3 27.84 51.57 38 -0.26 0.35

BANCO SANTANDER 2 7.6 8.97 6.6 0.15 0.36

SOC GENERALE SA 7 22.3 58.21 32.5 -0.31 0.79

LLOYDS BANKING 3 0.4 1.3 63.49 -0.99 -0.97

UBS AG-REG 3 11.91 19.06 14.45 -0.17 0.31

WELLS FARGO & CO 3 27.56 45.4 27.83 0 0.63

UNICREDIT SPA 3 5.48 7.42 8.97 -0.38 -0.17

CREDIT SUISS-REG 3 22.95 30.72 27.21 -0.15 0.12

NORDEA BANK AB 3 7.738 13.5 44.04 -0.82 -0.69

COMMERZBANK 0 12.63 16.15 40.03 -0.68 -0.59

47

As a caveat, it is important to make clear that we are not analysing nor

utilizing without a precise clarification of the terminology, of the word

“performance”. It is noteworthy that although Posnikoff (1997), Welch and

Wazzan (1999) as well as McWilliams and Siegel (1997) analysed the impact of

CSR on a company‟s performance, their research was not only focused on banks,

but also on broader industry segments. Moreover, throughout the hypothesis

testing section (3.4.2), we are not advocating that the share price performance

reflects the banks‟ overall financial performance, but that it is rather one of its

components. Defining performance has been a very perplexing task for

management and organizational research as well as in practice. On the whole, few

researchers have analysed the dynamics between corporate social responsibility

and financial performance by using statistical classical methods. We do

acknowledge complexities related to the definition of performance resulting from

these methods (March and Sutton, 1997), therefore we do not provide any

suggestions on the overall performance of the banks we analyse, outside of their

link with the CSR activities.

After examining Table 3-11, we provide analysis on the background of

cases with significant share price jumps/drops. This thorough analysis will be

covered in the Key Findings Section (Ch. 4).

48

3.4.2 Hypotheses and Regression Analysis

In order to test our hypothesis, we use the total CSR score, which was

derived previously within the section 3.3. Establishing CSR Measure (Table 3-8).

Column Total Score in Table 3-12 was adopted on that basis. Furthermore, we

used Bloomberg to collect and cluster the Year End Share Prices for (2008),

(2011) as well as the final year35 (2013) and we calculated return on the share price

over that time horizon.

As briefly outlined within Section 2 of this dissertation, in our hypothesis

we test whether a wider programme of CSR can be considered a contributing

factor to the share price performance. On that basis we set the first hypothesis as

follows:

Hypothesis 1: There is a dependency between the Total CSR Score and

Share Price Performance: Higher total CSR score should lead to a better share

price performance (time period observed being 2008-2011).

Table 3-13: Results of Regression Analysis for Hypothesis 1

Regression Statistics

Multiple R 0.33

R Square 0.1

Adjusted R Square 0.07

Standard Error 0.44

Observations 24

35 This part of the thesis was actively written mainly throughout Q1 2014, thus reference to 2013 being „last‟ year.

49

ANOVA

Df SS MS F Significance F

Regression 1 0.53 0.53 2.71 0.11

Residual 22 4.33 0.19

Total 23 4.86

Coefficients Standard

Error t Stat

P-value

Lower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept -0.65 0.14 -4.41 0 -0.95 -0.34 -0.95 -0.34

Total CSR Score

0.05 0.03 1.64 0.11 -0.01 0.12 -0.01 0.12

Share Price Performance (2008-2011) = -0.65 +0.05 x Total CSR Score + e

These regression results demonstrate that the intercept is negative. This

implies that the expected value on share price performance will be less than zero

when total CSR score is set to zero. Moreover, given that in most of the cases

observed change in the share price change is negative (which is mostly due to

general market environment); there is no surprise that the constant is negative as

well. Given that p- value (0.11) is greater than the common level of 0.05, it implies

that there is no statistical significance. Analysis also shows a low R-squared value

(10%). Therefore this regression model explains some (albeit small) variability of

the response data around its mean. This is in line with the low R squared values

which can be found in social sciences research (i.e. psychology studies), where it is

harder to make certain quantifiable predictions in comparison to other sciences

(i.e. physics). On this basis, we propose an alternative hypothesis:

Hypothesis 2: The correlation between the Total CSR score and Share

Price Performance improves in the long-, rather than short- term (time period

observed being 2008-2013).

50

Table 3-14: Results of Regression Analysis for Hypothesis 2

Regression Statistics

Multiple R 0.48

R Square 0.23

Adjusted R Square 0.19

Standard Error 0.7

Observations 24

ANOVA

Df SS MS F Significance F

Regression 1 3.21 3.21 6.54 0.018

Residual 22 10.81 0.49

Total 23 14.02

Coefficients Standard

Error t Stat P-value

Lower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept -0.56 0.23 -2.4 0.02 -1.04 -0.07 -1.04 -0.07

Total CSR Score

0.13 0.05 2.56 0.01 0.02 0.24 0.02 0.24

Share Price Performance (2008-2013) = -0.56 + 0.13 x Total CSR Score + e

Table 3-14 shows that the intercept is still negative as in the previous

case; however, the mean is less negative (-0.09) over the long term (2008-2013)

than in the first observation period (2008-2011), where the value is (-0.46). We see

that p-value is <0.05 which means that we can reject the null/first hypothesis.

Furthermore, the R Square is almost double in value in comparison to the testing

results of the null hypothesis. These results allow us to reject the first (null)

hypothesis and show that there is some dependency between involvement in CSR

activities and the share price of global banks only over the longer time horizon.

51

3.5 Asian Crisis (1997): Qualitative Frameworks

Figure 3-7: Dissertation Themes. Highlighting Theme Two

Asian business systems have a variety of their own norms and practices

for CSR. Some are long-standing and embedded, reflecting wider institutional and

cultural phenomena, and others relatively new, reflecting adjustments to

globalization. Asian societies also yield some very different CSR contexts and

challenges, such as poverty and wealth distribution, labour rates and standards,

educational disparities, civil society organizations, bases of governmental power

and legitimacy, corporate governance challenges, access to water and

vulnerability to national disasters.

(Chapple and Moon, 2007, p.183).

Unlike the most recent financial crisis, the 1997 crisis in Asia,

precipitated by the Thai government‟s devaluation of the national currency, had a

regional, rather than a global character36. The crisis had catastrophic consequences

for the economies of four South East Asian countries: Indonesia, South Korea,

Malaysia and Thailand. The reasons for the start of the crisis‟ and its development

have been extensively covered in business literature (Nanto, 1998; Beeson, 2002;

Friday et al., 2006; Kuroiwa and Kuwamori 2010). The previous sections have

36 The Central Bank of Thailand allowed the national currency to float against the USD and other currencies for the

first time. The Thai Baht plunged 20 percent following announcements:

http://money.cnn.com/1997/07/02/markets/thai_baht/






(1997)





http://money.cnn.com/1997/07/02/markets/thai_baht/

52

examined this by looking at the top 25 banks in the world on the date marking the

birth of the Asian crisis, five banks from Asia from the sample were all from

Thailand, the country that “gave birth” to the 1997 crisis (Table 3-3: Global Banks

ranked by total assets on July 2, 1997).

There is a reasonable amount of research on CSR activities employed by

multinational companies in Thailand (Chapple and Moon, 2011); however the

identified research gap for this dissertation remains consistent irrespective of the

time horizon in which the crisis is observed, as very little if any, research covers

the dynamics of CSR within the banking or overall financial services segment,

particularly throughout various crises. All in all, as it is not possible to deduce an

answer from the literature on the dynamics between CSR and the Asian financial

crisis, we would need a research methodology that would make possible the

development of conceptual categories and their relationship from raw data (Patton,

2002). Initially, we thought to apply the grounded theory method as a research

approach for this section. The grounded theory is particularly suitable for the

instances when “the topic of interest has been relatively ignored in the literature or

has been given only superficial attention” (Goulding, 2002, p. 55). However a

grounded theory approach could face significant limitations, specifically when it

comes to this part of the dissertation. Although we sought to use documentation

and archival records to identify significant concepts around the CSR dynamics (i.e.

Thai banks), unfortunately very limited data are available from that time period.

Another limitation would occur with the interviewing process of senior decision

makers within the CSR department of these Thai banks. As Thai, Chong and

Agrawal (2012) suggest, a bias from the retrospective nature of some of the

qualitative data could occur (i.e. views of the interviewees on reasons behind some

decisions taken more than fifteen years ago). However, it is noteworthy that certain

features of the grounded-theory process are still used throughout the case study,

which is covering theme three of this dissertation (CSR Dynamics throughout both

1997 and 2008 crises: Case study of Barclays Bank). Despite the limitations

outlined above and our agreement with the suggestions of Kuasirikun (2010), who

53

declares that the CSR practice in Thailand is relatively unexplored in international

literature, this dissertation still aims to build qualitative frameworks related to

these Thai Banks, representing our sample, alongside the following two

dimensions:

1. How did Thai banks from the sample get involved in CSR activities and

did the Asian crisis act as a trigger for CSR involvement? (Kanchapoom,

2006).

2. Comparative analysis of CSR pattern of Thai Banks in 2008 vs. 1997.

3.5.1 Asian crisis as a trigger for CSR involvement by Thai banks

According to Fukukawa (2010), in order to understand CSR better, it is

very important to assess a “culture-driven” view of CSR and, more crucially, “an

attempt to deepen our ethical understanding of engaging in CSR at a cultural level,

as well as politically and economically” (p. 8). We introduced this observation

throughout the sub-sections dedicated to the CSR activities in China and Japan

within the Literature review section of this dissertation. Interestingly, even very

recent research by Udomkit (2013) finds that value drivers of CSR in Thailand are

unclear. Prayukvong and Olsen (2009) believe that the penetration of MNCs into

the Thai economy put additional pressures on Thai companies to comply with

social responsibility principles. Although it is hard to measure the extent to which

Thai companies engage in CSR policies, it is expected that home countries of

MNCs or MNCs‟ headquarters can establish relevant control mechanisms to

ensure adequate CSR policies are in place at the subsidiaries level. For instance,

they could put pressure on imports of Thai products, which would have significant

54

negative consequences for the terms of trade37, resulting in negative effects for the

export-oriented Thai economy. However this argument is not applicable to Thai

banks, representing this sample for this theme of the dissertation, given that their

headquarters are in Thailand and they have nonexistent international presence.

However, it is noticeable from the available press and publicly resources that the

National Corporate Governance Committee (NCGC) in Thailand, a formalized

government body, is dedicated to enforcing CSR practices.

The Asian crisis of 1997 resulted in the peak of poverty in Thailand.

According to the available sources from the National Statistics Office, 10.25

million people in Thailand had consumption expenditure below the poverty line.

However, we cannot find any evidence that Thai banks were actively helping to

combat the poverty that arose due to the crisis outbreak. The reason for this silent

approach could be the bankruptcy and illiquidity situations in which banks found

themselves, accompanied by the need for prompt action in dealing with toxic

balance sheets. One of the responses to the crisis, provided by the official

Authorities, was the Labour Protection Act. In Thailand, the Labour Protection Act

of January 1998 was supposed to provide workers with better protection in terms

of minimum wage, gender equality as well as safety at work (Wilawan and

Lengthaisong, 1998; Wichianchom, 1998; Pernia and Knowles 1998). However, as

Kuasirikun (2010) demonstrates with the accompanying proof with data from

Department of Labour Protection and Welfare (1998-2007), this Act did not

improve the substantially position of Thai workers in practice. By observing the

set of data for 1997, it can be seen that 4% of 5.8 million employees inspected had

one of the occupational injuries listed (i.e. death, permanent total or partial

disability, significant absences from work, etc.).

37 Terms of trade of particular country measure ratio of country‟s export prices over country‟s import prices.

55

3.5.2 CSR patterns of Thai Banks in 2007 vs. 1998. Comparative

Analysis

Given that we are consistently facing the original problem related to the

absence of data when it comes to the time horizon of 1997, in this subsection we

try to move the time line forward given our principal aim to establish a qualitative

framework on the dynamics of CSR activities by banks in Asia. If we review the

method of data collected outlined in section 3.2 Establishing CSR Measure, we

derive the Table 3-15 below. Table 3-15 (CSR Activities by Thai Banks: 1997 vs.

2008) outlines CSR activities for Thai Banks within the sample for two crises time

periods (1997 versus 2008).

56

Table 3-15: CSR Activities by Thai Banks: 1997 vs. 2008 (Source: Multiple

Sources of Data)

Entity Activity 1997 Activity 2008

BANGKOK BANK PUB

SME‟s target partner (Puan Koo Kit SME)

Donation to the enhancement of Medical Research

Support for families facing social and economic changes

Scholarships and education support in rural areas

Support of start-up projects together with Ministry of Education and

Universities

Participated in government project for increase green areas

Published the book “Stop the Global Warming” to increase the awareness of

environmental concerns

Support to charities that help disabled people

KRUNG THAI BANK Art, culture and media support Establishment of CSR Committee

KASIKORNBANK PLC n/a

Scholarships to support rate of University education enrolment

Supporting art exhibition to promote national heritage

Support of disabled athletes in the honour of 2008 Beijing Olympic Games

Charity initiatives to help disabled children and children in poverty

Water for Life Project (purchase of water containers to help rural dry areas)

Carbon Credit Programme to Prevent Global Warming

Green Calendar initiative to act locally and think globally about a greener world

SIAM COMM BK PCL

Environmental concerns

Scholarship projects and support for University Education

Supporting Youth Development (theme based activities for promotion of youth

potential)

Reforestation project

Natural Disasters Victims Relief projects

Blood Donation Campaign

Cultural Foundation Cultural Foundation

BANK AYUDUHYA PCL Environmental concerns Environmental concerns

57

By observing the table above, we can see that one decade after the Asian

crisis (or rather at the peak of the most recent financial crisis); CSR activities were

focused on education as a principal theme. More narrowly, these activities were

directed mainly towards providing scholarships to Thai high school graduates and

supporting their enrolment into Thai Universities. Another common theme among

CSR activities relates to the support of the disabled population. An interesting

observation from the same table relates to the Krung Thai Bank (KTB). Due to the

total quantity of CSR activities, the initial impression might be that KTB did not

promote its commitment towards CSR activities. However, the formalized

establishment of the CSR department is the first of its kind that we find in the

banking sector in Thailand in that time frame. In the organizational chart of the

Krung Thai Bank (Figure 3-8), it is evident that the Corporate Governance and

Social and Environmental Responsibility Committee (CGSERC) reports directly to

the Board of Directors of the KTB, in parallel with the Board of Executive

Directors. The question that arises from this observation, still confirms our initial

standpoint (see section 2.3: Research Gap Identification) that there is a lack of a

concrete definition of CSR, which makes the measurement process very

challenging. In this particular instance the question that arises is: what is the extent

of CSR commitment by the KTB bank given that it does not have many CSR

activities, but executes one crucial action: the establishment of the CSR

department and positioning it very high in the organizational chart hierarchy? This

represents the case whereby we have concepts of corporate social responsibility

and corporate governance intersecting each other. Therefore, it is worth

conceptualizing the development of institutional frameworks in Thailand related to

CSR.

58

Figure 3-8: Importance of CSR Committee – Organizational Chart of KTB Bank,

as of Dec 31, 2008. (Source: KTB 2008 Annual Report).

59

3.5.2.1 CSR in Thailand: Institutional Context

CSR in Thailand is driven by the following three Thai organizations

(Kuasirikun, 2010). We outline the years of their foundation below:

Figure 3-9: Development of Institutional Frameworks supporting CSR in Thailand.

Sources (Fukukawa, 2010 and author‟s experience)

However, by taking a closer look at this timeline, we recognize that there

was no immediate response to the 1997 crisis which is in line with our observation

when it comes to the Labour Protection Act in Thailand (p. 45). For example, the

Environmental Act in Thailand was signed in 1992 and supported by TBCSD since

its foundation; we only see active commitment to the environmental concerns

around 2004. As outlined previously, TBCSD was formed in 1993, but only in

2003 offered a generic, but formalized definition on CSR activities: those activities

that are generated by resources from the company with the aim of creating a

“harmonious and peaceful way of living in society” (Yodprudtikan, 2006).

Moreover, the synthesized result shows that CSR activities are not inversely

related to macroeconomic indicators of the Thai economy‟s health. This is

depicted in Table 3-16 below. However, this “pick-up” in the CSR field almost

one decade after the Asian crisis is seemingly due to the integration of Thailand

into the global supply chain. Arunmas (2007) contends that from 2005 onwards

Thai companies realized that in order to take part in international markets would

The Thailand Business

Council for Sustainable

Development (TBCSD): to

promote environmental

awareness within the business

sector („sustainable

development‟)

The Thaipat Institute was

formed with an aim to

promote corporate social

responsibility in the

private sector

The Stock Exchange in

Thailand founded the

Corporate Social

Responsibility Institute

(CSRI)

1993 2005 2007

60

they have to increase their commitment into CSR over the long term. However, as

previously emphasized, banks in the sample observed have had nonexistent

international presence in order to actively strengthen CSR activities for that reason

only. By observing annual financial and sustainability reports as well as media

releases we find that by intersecting CSR with Corporate Governance, the Krung

Thai Bank sent a signal to these three official institutions that they are strongly

committed to CSR. By this one formal action of having the CSR Committee report

directly to the Board of Directors, KTB mirrored the actions which these

institutions certainly wanted to see. This can be testified by excerpts below:

TBCSD (2007) states that (...) “CSR needs to be understood and

articulated from the top management team right across the broad spectrum of

people working in the organization” (...)38.

Moreover, CSRI introduced the CSRC chapter in 2007 to provide

guidelines on the CSR activities: (...) “a contractual agreement with which

corporations must comply with great care and consideration, good governance, and

ethics. Moreover, corporations must also carry out socially and environmentally-

related activities to enhance the people‟s standard of living, the community and

society in general and the environment”39 (...). Table 3-15 (CSR Activities by Thai

Banks: 1997 vs. 2008) exactly confirms that: the KTB implemented one

institutional action, but it had valid impact. For this reason, the KTB was awarded

various prizes for the enhancement of their commitment to CSR activities40. As

38 Thailand Business Council for Sustainable Development (TBCSD):

http://www.tei.or.th/%5C/tbcsd/about_tbcsd/index.html

39 Corporate Social Responsibility Institute (CSRI):

http://www.csri.or.th/

40 The KTB was awarded the Outstanding Social and Environmental Responsibility Reward for 2008 from the State

Enterprise Policy Office and Ministry of Finance. Also, President of KTB was honoured by the Ministry of Social

Development and Human Security. Moreover, KTB was awarded Corporate Governance report of Thai Listed

Company 5-Star Awards from the Thai Institute of Directors (IOD). Detailed overview of prizes is available within

2008 Annual Report, p. 66 (electronic version:

http://www.tei.or.th/%5C/tbcsd/about_tbcsd/index.html

http://www.csri.or.th/

61

Niratpattanasai (2007) comments: “You cannot have a good company or a

successful company focusing on corporate social responsibility and neglecting

corporate governance. The two things go together; they run parallel with each

other‟‟ (p. 83).

Table 3-16: Parameters demonstrating health of Thai economy (Multiple Sources

of Data)

Parameters Period

1996 1998 2000 2007

Poverty 8.5 million people 20.5% increase 48% increase w/r

1996 40% decrease w/r

1996

GDP 3.115 bn THB 10.5% decrease 4% decrease w/r

1996 36% increase w/r

1996

Occupational injuries

4 % of employees expected

marginal change drop by 0.5% w/r

1996 drop by 50% w/r

1996

More illustrative, by observing parameters from Table 3-16, it is implied

that macroeconomic parameters are inversely related to CSR activities. As we can

see synthesis from this section, Thailand records an increase in CSR initiatives in

the period when macroeconomic factors improve (poverty reduced, GDP

increased). This is depicted in Figure 3-10 below, representing the year 2007.

http://www.ktb.co.th/ktb/Download/investorrelations/InvestorRelationsDownload_29annual_report_2551_en.pdf).

http://www.ktb.co.th/ktb/Download/investorrelations/InvestorRelationsDownload_29annual_report_2551_en.pdf

62

Figure 3-10: “Thai Decade” CSR and Economic Parameters ten years after the

Asian crisis of 1997 (Source: Author)

63

3.6 CSR Dynamics Throughout both the 1997 and 2008 crises: Case

Study with Features of Grounded Theory

Figure 3-11: Dissertation Themes. Highlighting Theme Three

CSR - what sometimes appeared to be an additional, non-core activity

seems to have become a “must” going forward, particularly for financial

institutions, such as Barclays, which has been shaken by many reputational

scandals in recent years. Barclays were not alone in finding their reputation

tarnished (i.e. Socgen‟s rogue trader case, JP Morgan‟s lack of transparency, RBS

miss-selling scandals, etc.41.), hence we might expect to see “competition”

between financial institutions in the arena of CSR activities. Some of these

institutions are “advertising” their commitment to CSR more intensively than

others, in an attempt to “repair” the damage to their reputations from various

recent corporate scandals. What both crises certainly have in common is that

dedication to CSR subsequently increased. However, the fundamental problem is

that it is still hard to measure and evaluate the extent of CSR commitment in

practice and its impact on corporate development and share prices. We tried to

quantify the impact of CSR activities to some extent by collecting announcements

made by top management and the impact of these on the banks‟ share price

performance for theme one of this dissertation (CSR and banks in Asia throughout

41 Leading business school Insead published a case study on Societe Generale‟s The Rogue Trader:

http://www.insead.edu/facultyresearch/centres/isic/ecsr/research/documents/SocieteGeneraleATheRogueTrader.pdf.

Moreover, UK banks‟ scandals have been receiving significant attention within business press:

http://www.independent.co.uk/news/business/news/rbs-and-barclays-face-yet-another-banking-scandal-8682536.html






(1997)





http://www.insead.edu/facultyresearch/centres/isic/ecsr/research/documents/SocieteGeneraleATheRogueTrader.pdf

http://www.independent.co.uk/news/business/news/rbs-and-barclays-face-yet-another-banking-scandal-8682536.html

64

the most recent financial crisis (2008), Section 3.3), but we are still cautious in

interpreting the results given the overall macro situation around global markets

during the time period when these CSR announcements were made. Therefore to

investigate the phenomenon further, we suggested applying the case study method

with certain features of the grounded theory, in the data processing stage.

3.6.1 Case Study with Features of Grounded-Theory

Case study methods (Eisenhardt, 1989) alongside the grounded theory

method (Glaser, 1967) are principally used for qualitative research. They both

refer to the theory that is developed inductively from the set of data. According to

Eisenhardt (1989), the case study approach is part of theory building, rather than

theory testing. This approach leads to beneficial results particularly given our

ability to collect the qualitative data to offer insight into CSR involvement, which

could not be easily done using quantitative data, which was applied in theme one

of this dissertation. According to Creswell (2008), the grounded theory is

especially beneficial when current theories about a certain phenomenon are

inadequate or inconsistent and can be advanced, which is definitely the case when

it comes to CSR (see Section 2.3 Research Gap Identification and Figure 2-1).

Nonetheless, given the uncertainty with respect to our ability to reach the

theoretical saturation with Barclays being our sampling case, we cannot rely on

this approach in its entirety. However, certain features of the grounded theory

approach (i.e. coding) are still used throughout the case study in our attempt to

contribute to emergent theory on CSR. One of the advantages of the case study

approach is that it can provide examples of polar types, which represent cases of

contrasting patterns (Eisenhardt, 1989). Moreover, Eisenhardt (1989) identifies the

cross-case pattern as an important component within the process of building a

theory from the case study research. As consistently mentioned throughout the

previous sections, although plenty of research has been done on the broad concept

65

of CSR itself, not enough attention has been paid to CSR within the context of the

banking industry, particularly during periods of financial crises.

3.6.1.1 Data Analysis and Theory Development

This section outlines features that we adapt from the grounded theory

methodology throughout our case study research. Once data are obtained, we

reduce these to a small set of themes that appear to describe the phenomenon of

CSR in the context of banking (open-coding). The next step is to group discrete

codes according to conceptual categories that reflect common features in CSR

involvement. According to Strauss and Corbin (1998), this step of clustering data

around points of intersection is known as the axial coding component of the

grounded theory. The same authors propose the ultimate step within this method,

known as selective coding, whereby it should be discussed how clustered codes

relate to each other and what message they convey with respect to the phenomenon

of CSR. This step however cannot be utilized for this dissertation, given that we

cannot reach theoretical saturation with Barclays, which is the main reason

Grounded Theory Method did not work in its entirety.

3.6.1.2 Coding Process

The first step was to discover concepts through thorough examination of

data. Questions and answers forming the full transcript of the interviews were

broken down and analysed line-by-line and paragraph-by-paragraph, after which

entire-document analysis was performed. Effectively, each and every segment of

the text was coded. This technique is known as conceptualizing and for illustrative

purposes; the excerpt from one of the Interviews is depicted within Table 3-17

below. Detailed conceptualization process for the full transcripts of each and every

of the thirteen interviews is available in Appendix A.

66

Table 3-17: Conceptual Codes: Breaking down the full transcription of

Interview(s)

Document Code Segment

Interview Conceptualizing\Community centres People were actively working on CSR issues from within their business departments, but we did not have official CSR centres or community investments units.

Interview Conceptualizing\Community Support CSR activities are fundamental for supporting our community.

Interview Conceptualizing\Cooperation with official institutions (i.e. government)

It is about building capacities and supporting growth, creating jobs and this is a strongly supported by the Indonesian government.


Banks started competing in CSR. Banks have similar focus. It could generate comparative advantage only if you work in cooperation with Government. We do have to use CSR to work more with Government and fill their gaps.

Interview Conceptualizing\Coordination of CSR activities

People were actively working on CSR issues from within their business departments, but we did not have official CSR centres or community investments units.


We are starting in Asia and plan to roll out these initiatives in Africa and in the States. The process is led by headquarters in London.

Interview Conceptualizing\Coordination of CSR activities at group vs. local level

Barclays Asia CSR Committee consists of 5 business heads (i.e. Barclays Wealth, Barclays Investment Banking, Barclays Corporate Banking, etc.). Chair of Asia Pacific Committee is representing Asia within the Global Committee. All these regional committees are represented on Global Committees, so technically everything feeds into global reporting lines.

Interview Conceptualizing\Corporate Citizenship Citizenship is at the core of everything Barclays does

Interview Conceptualizing\Corporate Social Responsibility as a license to operate

It is important to mention that CSR is a license to operate, stakeholders require it.

Interview Conceptualizing\Create jobs We focus on skills training, rather than disaster recovery.

Interview Conceptualizing\Create jobs

Japanese companies focus on innovation and technology rather than job creation, which is contrary to the CSR activities in Hong Kong and Singapore, where employment is very high on government radar.

Interview Conceptualizing\CSR as a tool to attract and retain talent

CSR is seen as a talent attraction and retention tool. If company is not active in CSR activities in Asia, it cannot attract best talent.

Interview Conceptualizing\CSR focus in countries with opportunities

Our presence in Asia is mostly reflected in developed Asian economies.

Interview Conceptualizing\CSR in Asia

From Barclays perspective we have invested in countries where we have market presence (Barclay‟s presence in Asia is reflected in investment banking operations).

67


Interview Conceptualizing\CSR investment

We do not have business presence in countries such as Vietnam or Laos. We simply do not see opportunities from the business side. Given the limited resources, we are focused mainly on CSR activities within these developed markets. Indonesia, for instance is a huge emerging market; it is the third largest country in the world when it comes to population. We do a lot of investment in CSR in Indonesia.

Interview Conceptualizing\CSR measurement

It is extremely difficult to find a measure of CSR. We work closely with various consultants in order to try and measure the impact of CSR. However, there is no control factor.

In addition to the “conceptual codes”, the “new code” category also

emerged throughout the analysis. Whilst conceptual codes were defined on the

basis of detailed understanding of the meaning of every single line of the responses

to the questions in the interview, new codes were arising directly from the

respondents; they could be defined as representing a straight point, or a few word

wrap-ups of interviewees‟ answers to the questions.

Throughout the analysis of thirteen interviews, we came across the

situations where codes assigned were representing conceptually similar items.

Once the entire analysis was completed, we narrowed down the codes in order for

the concepts to become clearer. By doing this exploratory analysis the power of the

codes became significantly higher. This clustering step is presented in Table 3-18

below. The full list of conceptual and new codes, as well as refining of codes is

available in Appendix C.

68

Table 3-18: Example of Clustering of Conceptual and New Codes

Conceptualizing New Code

Cooperation with official institutions (i.e. government)

Collaboration with institutions (i.e. government)

Alignment of CSR activities with business strategy

Aligning CSR initiatives with company‟s strategy

Cooperation with official institutions (i.e. government)

Aligning CSR to company‟s business strategy

Cooperation with government Alignment of CSR activities and business strategy

Cooperation with official institutions

Alignment of business strategy and CSR activities

Cooperation with institutions (i.e. government)

Aligning business strategy and CSR

Teamwork

Teamwork and cooperation Company‟s support for CSR commitment

Support for CSR activities by company: Company‟s commitment

Teamwork, regular cooperation

More Focus on citizenship post financial crisis

More emphasis on CSR post financial crisis

Alignment of CSR activities and business strategy

Aligning business strategy of the firm with CSR

CSR commitment through company's product offering

CSR commitment through company's product offering *new hints

Alignment of CSR activities and core business (strategy)

CSR as mandatory field CSR as an obligatory concept

Focus on CSR activities with commercial rationale

Business/Commercial rationale for CSR activities

Ethics Business ethics

Usual candidates for CSR activities

Typical candidates needing CSR activities

Increased emphasis on CSR


Increase in commitment into CSR activities

More emphasis on citizenship CSR post crisis

Stronger emphasis on citizenship since the crisis

Increased focus on CSR post crisis outbreak

Personal drive for CSR involvement

Personal ambitions behind CSR involvement

Personal drive behind CSR involvement

Cultural aspects of CSR Cultural component behind CSR

Individual commitment to CSR

Individual commitment

Individual values and commitment to CSR

Individual passion for CSR

69


Philanthropy

Philanthropy support

Philanthropic activities

CSR as a response to improve reputation of the banks

CSR as a response to improve reputation/brand of the banks

CSR as a tool to attract and retain talent

CSR as a tool to attract talent

CSR as a tool to attract and retain best talent

CSR as a talent retention tool

CSR as talent attraction and retention tool

CSR as a talent attraction and retention tool

CSR as a business strategy tool

CSR as a strategy tool

CSR as an important strategy tool

CSR as comparative advantage

CSR as a comparative advantage

CSR as expected and mandatory

CSR as mandatory

CSR as obligatory field

Create jobs

CSR programmes to create jobs

Supporting jobs and growth

Focus on growth and jobs

Implicit focus on creating jobs

Education

Supporting education

CSR activities focused on education

Focus on education

Social entrepreneurship

Societal focus

Focus on social entrepreneurship

Supporting affected Supporting affected children and families

Supporting art and culture Supporting art

Helping young

Helping youth

Helping young people

Public pressure and stakeholder expectations

Public expectations and pressure

70

Figure 3-12 is a screenshot of MAXQDA during the open-coding phase.

The Document System section outlines full-transcripts of thirteen interviews

obtained as well as a set of documents, including Barclays sustainability report for

2013, 2014 and materials on CSR announcements obtained during the data

collection process for this dissertation. Conceptualizing was done in Document

Browser Window. When a code was generated in Document Browser Window, it

was immediately labelled and registered within the Code System Window. The

number next to the code shows the frequency of the code appearance through the

whole project. As per Figure 3-12, for example, code “cooperation with charities”

occurs four times through the project and once in Interview 4. Once a code in the

Code System Window is activated, all segments, within activated documents,

related to that code are revealed in the Retrieved Segments Window in the bottom

right corner.

71

Figure 3-12: Screenshot of Open-coding with MAXQDA

72

3.6.2 Barclays – Case study

3.6.2.1 Barclays: Historical Perspective on the British “giant”42

Throughout the history of multinational banking, British banks have

retained large market shares in a variety of countries over long periods of time

(Jones, 1990 and Wilkins, 1970). As outlined at the initial stage of this

dissertation, CSR as a concept appeared for the first time in the 1950s (Bowen,

1953). On that basis, this sub-section will focus on a historical perspective of

Barclays from the post-war period onwards. (...) “The main banking strategies of

the post-war period (1945-1980) emphasized geographical diversification.

Barclays established branches overseas on the grounds that British multinational

manufacturers would need the dynamic assistance of British banks in the post-war

world. By establishing foreign branches, Barclays signalled to its clients that it was

willing to guarantee all its global assets for local activities. Moreover, several

banks established development corporations, with the intention of providing credit

facilities in developing economies of Asian and African continents: Barclays

Dominion, Colonial and Overseas (DCO) led the field. It is noteworthy that the

share of the assets of the Barclay‟s group in overseas banking was only 4% when

Barclays started overseas expansion of its retail banking at the beginning of the

1920s. It had already risen to about a quarter by 1945, and outstandingly to 42%

by 1970 and to 56% by 1980 (Ackrill and Hannah, 2001). In 1980, the Barclays

Group still had more branches abroad than all American banks added altogether

(Wilkins, 1970, Casson, 1983 and Jones, 1995). In 1987, when Barclays had cut-

42 This sub-section adopts summary on the history of Barclays – prepared by the Author of this Dissertation for his

Master of Science thesis at Bocconi University, completed in July 2009. Author‟s Master Thesis used the case-study

of Barclays Bank in the context of internationalisation business strategies and organizational models. Therefore, PhD

dissertation does not represent extension or replication of the Author‟s Master thesis. It solely uses this summary on

the historical perspective within subsection 3.6.2.1 in order to provide more effective introduction into the object for

the case study discussion.

73

off half of its original overseas branches, it nevertheless had more than one

thousand branches overseas, while Citicorp had 190 and Chase Manhattan 134

(Akcrill and Hannah, 2001). Only Credit Agricole had more overseas branches

than the Barclays Group back in 1980. Barclays was a parent company of Barclays

DCO that was controlling overseas banks in the developing world. Local managers

had decision-making autonomy; thus they were flexible in responding to local

needs. In the African markets, particularly in Egypt and Sudan, local managers

decided to continue the old Anglo-Egyptian Bank policy of storing and handling

the cotton crop (Ackrill and Hannah, 2001). DCO had a distinct style from its

parent and it liked to emphasize its autonomy; however major initiatives were

discussed and agreed between its chairman and the chairman of Barclays, its

parent bank. Barclays DCO was a territorially diversified bank, therefore local

practices diverged more radically than in the domestic bank. There was a great

variety in the degree of DCO head office control over local boards (i.e. on

advances, premises and senior appointments); from time to time whole countries‟

branch networks were run without local boards, directly from London (Ackrill and

Hannah, 2001). The conditions for banking were different in different overseas

territories; it appeared that management of these local banks possessed only a

limited range of skills since they lacked the sophistication of the London financial

markets. Therefore DCO was a federation of overseas domestic banks. It was

„overseas‟, „multi-domestic‟, and „imperial‟ rather than „international‟ or „global‟

(Gray et al., 1981). Although its core business was in the retail routine of domestic

banking, not in wholesale international banking, it provided local banks with

powerful connections. Barclays tried to combine the benefits of local adaptation43

with the global economies of centralization in terms of training and knowledge.

Barclays DCO contributed the practices of Anglo-Saxon banking to the overseas

43 Adapted from Ghemawat‟s (2007) triple A framework (Aggregation, Adaptation, Arbitrage):

http://mbi.dirkjanswagerman.nl/static/files/MBI/Module%2021/Managing_Differences.pdf


74

territories. DCO staff provided training to local managers and employees.

Recruitment and promotion of non-British staff overseas, always the large majority

of DCO‟s staff, varied accordingly to the standard of education in the local

population, trade union pressures and conventions, laws or prejudices of different

societies (Ackrill and Hannah, 2001). George Money, the son of a director of the

Anglo-Egyptian, exploited arbitrage potential in the West Indies. He was

“dismayed at the colour and class consciousness of local white managers and its

high cost to the bank; he successfully reduced expatriate numbers and increased

local recruitment and training” (Money, 1970, p. 274). In addition, in East Africa

in the 1950s Barclays started employing local staff. By the mid-1960s the

recruitment of Africans had increased and DCO was ready to provide thorough

training to local recruits, therefore more Africans entered the bank and gained

promotions (Ackrill and Hannah, 2001)” (...) (Starovic, 2009, pp. 52-54).

(...)”Although the era of „imperial banking‟ was over at the beginning of

the 90s, Barclays still held overseas banks, both in the developed and

underdeveloped world. On the whole, it is evident that the international expansion

of Barclays in the decades of the 70s, 80s and 90s was an ambitious attempt to

achieve diversification both in terms of its geographical coverage and banking

product lines. This unquestionably required extensive investment in developing

new capabilities. Although its overall internationalization strategy in this period

was built in anticipation of diminishing returns in the highly competitive British

market, it became clear that it would be far more difficult to exceed the returns of

the domestic bank. In 1992, the group‟s ambition to „go global‟ and exploit

aggregation44 opportunities by offering a full range of services to multinational

customers in major financial centres, as well as using a single global brand across

multiple markets, still held. In 1990, 70% of the group‟s assets were in the UK,

44 Adapted from Ghemawat‟s (2007) triple A framework (Aggregation, Adaptation, Arbitrage):



75

11% of its assets were in other European Community countries, 12% in the USA

and 7% in the rest of the world (Annual Report, 1990). However, Barclays shifted

the group‟s international ambitions at that time. It had the intention to become a

major global bank, by moving away from its legacy in retail banking, but offering

Foreign Exchange (FX), broking, corporate finance and investment management

services worldwide. In the last decade of the 20th century Barclays developed its

two-pillar strategy of international expansion: expansion in the markets of

developed economies and emphasis on investment, rather than on retail banking.

Regarding the Asian market, Barclays was devoted to the narrow product-service

offering. In Singapore it was offering investment banking services solely, while in

Australia it was engaged in lending to small-and medium-sized businesses “(...)

(Starovic, 2009, pp. 56-58).

(...)”With more than 300 years of history and expertise in banking, at the

peak of the financial crisis of 2008, Barclays operated in more than 50 countries

and employed approximately 155,000 people; the group as a whole had more than

48 million customers and clients globally (Annual Report, 2008). Barclays

included two large clusters, divided into a number of business units. These

principal clusters were: Global Retail and Commercial Banking (GRCB) and

Investment Banking and Retail Management (IBIM). The third major area of the

business was Group Centre, which comprised all back-office functions, such as

operations, IT, etc. The organizational structure from that time frame with the

executive management is presented in Figure 3-1345 (Annual Report, 2009).

45 Five years later (May 8, 2014) Barclays CEO Anthony Jenkins announced restructuring of the firm‟s strategic

priority: significant reduction in headcount, merger of divisions for cost-cutting purposes, de-emphasizing of emerging

markets and focus on UK and US retail banking. This event is known as “Barclays Black Thursday”:

http://www.barclays.com/content/dam/barclayspublic/docs/InvestorRelations/IRNewsPresentations/2014Presentations

/8-may-speech-by-antony-jenkins-ceo-and-tushar-morzaria-group-finance-director.pdf

Media coverage:

http://www.bbc.co.uk/news/uk-politics-27361862

http://www.barclays.com/content/dam/barclayspublic/docs/InvestorRelations/IRNewsPresentations/2014Presentations/8-may-speech-by-antony-jenkins-ceo-and-tushar-morzaria-group-finance-director.pdf

http://www.barclays.com/content/dam/barclayspublic/docs/InvestorRelations/IRNewsPresentations/2014Presentations/8-may-speech-by-antony-jenkins-ceo-and-tushar-morzaria-group-finance-director.pdf

http://www.bbc.co.uk/news/uk-politics-27361862

76

Figure 3-13: Barclays Group Organizational Structure at the peak of the 2008

financial crisis

Two principal clusters of Barclays Group PLC at that time were: Global

Retail and Commercial Banking (GRCB) and Investment Banking and Retail

Management (IBIM), were further divided into nine business units. Among these

nine units, four business units were categorized on a geographical basis: the UK

Retail Banking, GRCB Western Europe, GRCB Emerging Markets and GRCB

77

Absa (South Africa). From the cluster of GRCB, Barclaycard and Barclays

Commercial Bank were categorized on the basis of product/service offering. The

entire cluster of Investment Banking and Investment management (IBIM) had

global presence and it was composed of three business units: Barclays Capital,

Barclays Global Investors46 and Barclays Wealth. The investment banking

activities were unified and headquartered in London, within strategic operations in

the United States, Asia and emerging markets. Barclays Capital coordinated

investment banking activities globally; it targeted large MNEs and institutional

clients with a wide range of product offerings in the arena of the investment

banking industry (commodities, foreign exchange, fixed income, emerging

markets, structured products, debt and capital markets advisory, financing and risk

management). Barclays Wealth provided private banking, investment

management, fiduciary services and brokerage. It managed clients‟ assets worth

GBP 145bn worldwide (Barclays Annual Report, 2009). Barclays Global Investors

was one of the largest players worldwide in the asset management sector47” (...)

(Starovic, 2009, pp. 59-60). Observing the peak of the financial crisis of 2008,

GRCB Emerging Markets opened over 300 distribution points in the first half of

2008 and it had approximately 3 million customers in Africa, Russia, Middle East

and Asia (Barclays Annual Report, 2008). (...) ”Although these two units access

economies of scope and scale in Barclays‟ resources that can be shared across

different national markets, GRCB Western Europe and GRCB emerging markets

had to adapt to meet the needs of local market circumstances “ (...) (Starovic,

2009, p. 62). The GRCB Emerging markets unit included markets such as Russia,

Middle East and Asia. Although all of these geographical markets could belong to

the same business cluster, each market differed greatly. As the literature suggests,

46 Barclays decided to sell the fund-management arm, Barclays Global Investors to Blackrock in summer 2009. Given

the USD 9bn gain, the bank boosted its tier 1 ratio and placed itself well within the market environment. Media

coverage: http://www.economist.com/node/13848711

47 Forbes‟ Top 200 Global Companies

http://www.economist.com/node/13848711

78

national markets remain fragmented by CAGE48 differences (Ghemawat, 2001).

(...) “For instance, the Russian market is significantly different from the market of

Indonesia, although both of them belong to the category of emerging markets. The

acquisition of Expobank in Russia and Akita in Indonesia present the 2008

milestones of Barclays‟ strategic priority: develop retail and commercial banking

activities in selected countries outside the UK (Barclays Annual Report, 2008)49.

The private Banking arm, Barclays Wealth, belonged to the category of medium

adaptation. Barclays expectations were that in the near future differences between

developing and developed countries would diminish and that its private banking

arm would be able to offer private banking products and services they used in

developed economies to the new millionaires created in China, India and Russia

(Barclays Wealth Annual Report, 2008). Barclays Capital and Barclays Global

Investors, two units of the Barclays IBIM cluster reflected a small degree of

adaptation. For example, Barclays Capital derivative product offering is “designed

to serve the global customer with homogenous needs across country boundaries”

(Venzin, 2009, p. 114)” (...) (Starovic, 2009, p.63).

48 CAGE Distance Framework: Cultural, Administrative, Geographical and Economic Distance

49 Barclays sold its Expobank business for barely a tenth of the amount paid in 2008, given that it was an

underperforming unit. Media coverage: http://www.theguardian.com/business/2011/jul/18/barclays-faces-large-loss-

russian-exit

http://www.theguardian.com/business/2011/jul/18/barclays-faces-large-loss-russian-exit

http://www.theguardian.com/business/2011/jul/18/barclays-faces-large-loss-russian-exit

79

3.6.2.2 Barclays CSR journey

(...) “The poor, of course, are less likely to have bank accounts at all. In

developing countries the richest 20% is more than twice as likely as the poorest

20% to have a bank account. Globally, less than 25% of people making $2 per day

or less have accounts; when average daily income rises above $10, the banking

rate rises to around 60% “ (...) (The Economist, November 15, 2014, p. 24).

In the wider external marketplace, there are many different terms used to

describe CSR. For Nestle, CSR is defined as “creating shared value”, whilst for

Nike it is “sustainable business”, whilst for Unilever “sustainable living”. By

observing the banking sector, notable examples are Goldman Sachs, which aligns

CSR to “environmental, social and governance (ESC)”, for Royal Bank of

Scotland (RBS) it is “sustainability”, while it is “citizenship” for Barclays. At the

Barclays Bank PLC group level, the quarter-of-a-century CSR journey is

graphically represented in Figure 3-14.

80

Figure 3-14: Barclays‟ CSR Journey (Source: CSR Ambassadors Briefing, October

2014 and Author‟s Experience)50

As Figure 3-14 demonstrates, the strongest emphasis on CSR at the group

level occurs from 2012, rather than straight after the 2008 global turmoil. This is

because the company reformulated its business strategy and values due to the event

of the Libor scandal of 201251. After the scandal outbreak, the new core Barclays

value became citizenship, which is mirrored in the words of the Barclays current

50 Author of this dissertation has been appointed as a Barclays Citizenship Ambassador.

51 Barclays CEO Bob Diamond as well as COO Jerry del Missier resigned a week after the bank was fined for trying

to manipulate inter-bank lending rates: http://www.bbc.co.uk/news/business-18685040

http://www.bbc.co.uk/news/business-18685040

81

CEO, Mr Anthony Jenkins “People rightly expect businesses to demonstrate

leadership by serving as a catalyst for helping societies to prosper. Barclays is

committed to meeting that responsibility” (Barclays Bank Strategic Review, 2013).

Citizenship at Barclays is organized around three pillars (Figure 3-15).

1. The way we do business (code of conduct, stakeholders, environmental

impact, transparency, risk minimization)

2. Contributing to growth (drive sustainable progress, supporting

businesses, youth employability)

3. Supporting our communities (Education, Job Creation and Training)

We selected notable measurable examples of Barclays CSR commitment:

Reduction in Barclays‟ global carbon emissions on an annual basis by 5.2%;

approximately half a million hours dedicated to Barclays‟ community programmes

by employees; GBP 35million donated to charities through Barclays matched

fundraising and giving programmes; GBP 137 million invested in communities

around the world with the target of GBP 250million in 2015 (Barclays‟ Citizenship

Report, 2013).

82

Figure 3-15: CSR pillars at the Barclays Group Level (Source: Barclays

Sustainability Report, 2014)

3.6.2.3 Barclays CSR Asia perspective

Table 3-19: Examples of Barclays CSR activities in Asia at the peak of the 2008

crisis (Source: Barclays Sustainability reports for 2007 and 2008. Selected by

Author)

Date CSR Activities in Asia

July 08, 2007 Barclays responds to South Asia floods (India)

May 15, 2008 Inclusive Banking Accounts in India

June 11, 2008 1,000 hours of personnel time to eight charity projects in China, Thailand,

Singapore and HK

Oct 01, 2008 Barclays donates to Red Cross Asia Disaster Appeal (Vietnam, Cambodia,

Indonesia, Laos)

Given that Barclays was already represented in the sample for theme one

of this dissertation (CSR and banks in Asia throughout the most recent financial

crisis (2008), Table 3-2), it was acknowledged that CSR involvement with global

impact was reflected in the launch of the GDP 5million three-year global

community investment partnership with UNICEF (Table 3-7). Notable examples in

Asia, in addition to disaster appeals after earthquakes, typhoons, flooding, etc.,

include promoting sustainable finance via strategic partnership with China

83

Development Bank (CDM) as well as CSR activities in India. The “Inclusive

banking” CSR initiative in India refers to banking services over mobile phones or

the internet to those who are excluded from the access to financial services.

(...)”Bank branches cost a lot to build and staff ...In India only rich minorities of

citizens have bank accounts, and two thirds of adults – many of them rural and

poor – have no access to financial services at all. Why should they have to spend

time, effort and money to travel to a bank branch? (...) “(The Economist,

November 5, 2014, p. 23). Barclays Corporate Citizenship Report for 2008 defines

inclusive banking as helping those who are excluded from the financial system to

join and benefit from it: “Financially excluded and unbanked people range from

poor individuals in the developing world to small businesses struggling to borrow

money in developed countries”. On the example of India, Barclays launched the

“Hello Money” application which allows customers to carry out banking

transactions over the Internet or mobile phones. With this CSR initiative, Barclays

provided access to banking for people from rural areas of India, which previously

were excluded from the financial system52.

Another interesting observation in the 2008 refers to the recognition of

CSR efforts by individuals working in Barclays. In 2008, circa 140 Barclays

colleagues in Asia Pacific donated more than one thousand hours of their personal

time to charity projects in China, Thailand, Singapore and Hong Kong. Internally,

the firm gave recognition to the employee in Asia who was acting as an “engine”

for the implementation of CSR activities. Chairman‟s Awards 2008 archive (June

11, 2008) outlines that none of these charitable activities in Asia would be

possible, without the inspiring vision of L.W. C., one of the managers at Barclays

Capital, Singapore, who was named as a finalist in the Barclays Chairman awards

2008: “Passionate about helping those in need, L.W.C was convinced that tapping

52 It is noteworthy that rural areas in India demonstrated significant increase in the penetration of mobile phone

services in 2008.

84

into the resources of teams across the region would be a far more effective way of

making a difference to a variety of causes than simply supporting individual

efforts. As a result she co-founded the Barclays Asia Pacific Volunteering Group

in 2004. What started as a special interest group aimed at bringing Barclays

Capital staff together to help people in need, soon grew into a conglomeration of

autonomous teams in Thailand, Taiwan, China, India, Singapore and Japan, all

determined to make a difference. With team leaders established in each country, Li

Woon now coordinates charitable events throughout the region, offering support

and advice for the wealth of fundraising and volunteering activities organised by

her colleagues. She is also the main liaison with Barclays Capital in London and

Group Centre, ensuring that the activities in the area get a maximum amount of

support and funding. In addition, she continues to spearhead activities in

Singapore and spends a lot of time raising awareness about the social problems in

the area53”. These are appealing statements because from today‟s perspective we

see institutional (teams, departments, subsidiaries, to name a few), rather than

individual recognition. We believe that exemplary individual recognition in 2008

occurred because Barclays‟ Asia CSR department and teams were not formally

established. In fact as our interviewees confessed, the first official headcount

named as the Community Investment Centre was established only in 2011.

53 Company‟s archive.

85

3.6.2.4 Barclays CSR stakeholders

“You cannot just deliver books – You have to teach people how to read” 54

Since the Libor Scandal of 201255, the concept of Citizenship has been

put at the core of Barclays activities. This is reflected in the reformulated business

strategy where the aim of Barclays Bank has been to become the “Go-To-Bank”

and to be recognized as an institution that helps people achieve their ambitions in

the right way. This shift in approach resulted from strong societal pressure after the

reputational scandals Barclays experienced56. Currently , Barclays offers a variety

of CSR/Citizenship programmes; one of the most exemplary being the “5 Million

Young Futures”, which aims to build the capacity of the young population

worldwide (i.e. financial literacy, money management, skills upgrading, etc.).

It could be expected that all our thirteen interviewees share similar

personal values in relation to their individual drive to get involved in this research

project. Whether their workplace is located in Singapore, Mumbai, London or New

York, our interviewees indicate their drive to become people that the Institution

they work for, as well as society would be proud of. Executed interviews and

applied coding technique have importance in illustrating and drafting conclusions

for the following four aspects57:

54 From one of the interviewees based in Mumbai

55 Media coverage: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9361646/Barclays-Libor-

scandal-as-it-happened-June-28-2012.html

56 Scandals such as the Libor fixing scandal have hit the bank‟s recovery from the 2008 crisis. Media coverage:

http://www.theguardian.com/business/2012/sep/10/barclays-reputation-battering-libor-scandal

57 These listed sub-questions do not represent principal research questions. They rather represent a narrower

breakdown of Research Question 4 and Research Question 5, which are outlined in Section 2.4 Research Question.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9361646/Barclays-Libor-scandal-as-it-happened-June-28-2012.html

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9361646/Barclays-Libor-scandal-as-it-happened-June-28-2012.html

http://www.theguardian.com/business/2012/sep/10/barclays-reputation-battering-libor-scandal

86

1. How to incorporate Citizenship commitment in Barclays‟ business

proposition and its business objectives58 ?

2. How CSR is reflected in the countries where Barclays has market

presence and business case?

3. What is the prospect of CSR measurements from Barclays‟ stakeholders‟

perspective?

4. Is CSR becoming a license to operate and what is the extent to which

Barclays moves beyond the obligatory when it comes to its citizenship

commitment?

In spring 2015, Antony Jenkins, Barclays CEO, became chairman of the

Businesses in the Community Charity (BITC). During the takeover ceremony, Mr.

Jenkins emphasized his commitment to the Citizenship: “Businesses do not operate

in isolation – we have customers and staff, what we do and how we do it has a

huge impact on the society in which we live and work” (The Evening Standard,

February 25, 2015, p. 38). Although this might be considered a ceremonial role,

the timing of its occurrence is important; it took place just couple of weeks after

the HSBC‟s tax scandal59, the UK‟s largest bank , which is one of Barclays main

competitors.

58 Barclays announced investment in the Green Bond market. This is recognized as an example of incorporating CSR

in the business objectives (See Interview 10, 11 and 12). Media coverage:

http://www.businessgreen.com/bg/news/2371393/barclays-pledges-gbp1bn-green-bond-investment

59 In spring 2015, an investigation has been launched on HSCB tax avoidance schemes. Media coverage:




87

4. Key Findings and Discussions

4.1 CSR throughout the crises. The Evolutionary Perspective. Establishing

the ENMEM framework

Prior to expanding key findings and the discussion section of this

dissertation it is relevant to produce a timeline of events that shaped the context of

CSR. As this research shows, prior to the Asian crisis in 1997, involvement in

CSR activity within the banking sector was very minor; most CSR initiatives were

realised through philanthropy programmes and one-off donations. Even recent

study by PWC (2013) suggests that CSR in India has traditionally been seen as

philanthropic activity60. The most plausible reason is that the first half of 1990s

was not characterized by events (crises, corporate scandals, etc.) that could trigger

and demand more intense dedication towards CSR activities. An important event

prior to the Asian crisis of 1997 was recession in Japan; bankruptcies of Yamaichi

Securities and Hokkaido Takushoku Bank due to non-performing loans are notable

failures of this period. However, there was no evident additional pressure from the

official institutions or community to redefine and reinforce the focus on CSR

activities; Japan in that period is considered to be an example where recession was

not handled efficiently at the expense of CSR incorporation within the Japanese

culture. The first notable CSR commitment in Asia prior to the crisis of 1997 is

evident in Thailand. In 1993, The Thailand Business Council for Sustainable

Development (TBCSD) was founded with a mission to promote sustainable

development within the business sector.

60 Handbook on Corporate Social Responsibility in India, Published by PWC: www.pwc.ru

http://www.pwc.ru/

88

The Asian crisis in 1997 did not trigger more CSR activity. Even three

years after the event of the crisis, CSR within the banking industry was still in

quite an embryonic stage. Even if observed on a wider industry perspective and on

a global scale, just circa 11% of CEOs, in 2000, believed that CSR was an integral

factor in improving commercial success61. The period between 2000 and 2003 was

quite “empty” when it comes to CSR developments. The year 2003 however could

be acknowledged to be a boom year for CSR in Japan. Another notable event in

the Asian perspective of CSR relates to the establishment of the Thaipat Institute

in Thailand with the aim of promoting corporate sustainability in the business

sector. It is worth summarizing these developments from the Asian perspective

prior to moving to 2007, the year of the ultimate crisis, which naturally deserves

special attention.

Table 4-1: The timeline of CSR evolution in Asia (Source: Author)

Period Characteristics

1992 Recession and bankruptcies in Japan. CSR at the expense of efficiency

1993 Establishment of Thailand Business Council for Sustainable Development (TBCSD)

1997 Establishment of Business Ethics Research Centre in Japan

2000 No particular activity, CSR in embryonic stage

2003 CSR boom in Japan

2005 Establishment of Thaipat Institute in Thailand to promote sustainability

Outbreak of the crisis in 2007/2008 added an additional dimension to the

concept of CSR. Given that just a few months prior to its collapse, Lehman

Brothers was one of the most admired companies to work for, it is reasonable that

some changes had to take place in how the banking business had been managed. It

is not accidental that at the peak of the 2008 crisis Barclays signed a Memorandum

61 Echo Research Survey in collaboration with International Business Leaders Forum: outlined in introductory section

of this dissertation.

89

with UNICEF on global initiatives62. Another example refers to the provision of

access to mobile banking to the disadvantaged areas in India. This initiative could

closely be linked to Barclays‟ business strategy of that period: doubling the Asia

revenues in the period of (2008-2013). We recognize that CSR initiatives in Asia

in 2008 are closely aligned to the business objectives at the company level.

The crisis outbreak in the banking industry throughout the years of 2007

and 2008 brought new emphasis on CSR commitment and this is summarized in

the Table 4-2 below. It is notable that in recent years CSR has been given more

attention than ever before. The Echo Survey which had been refreshed for 2010

showed that 96% of CEOs believe that CSR commitment is of the uttermost

importance, which is significant jump from 11% recorded ten years before.

Table 4-2: Timeline of the CSR activities. Since 2007 onwards (Source: Author‟s

selection of publicly available sources)

Period Characteristics

2007 Mohammed Yunus and Grameen Bank receive Nobel prize for their efforts to create socioeconomic developments

2008 SMFG63

establishes CSR department

2008 Krung Thai Bank64

establishes CSR department

2008 Barclays-Unicef partnership65

2008 Barclays focus on CSR activities in Asia

2008 "Most admirable companies" from Fortune List (2007) "fail" due to reckless behaviour and mismanagement

2010 Frequent emphasis on CSR commitment and values by CEOs financial services firms

2012 Barclays defines Citizenship principles and core values following up Libor scandal

2013 Barclays announces "5 million Young Futures Programme"

2014 Barclays issues Green Bond

62 This initiative is covered in Table 3-7.

63 See Table 3-9.

64 See Tables: 3-10 and 3-15.

65 See Table 3-7

90

The key findings of this dissertation lead to the definition of five periods

within the evolutionary perspective of the CSR. We are naming this the ENMEM

framework. The description of each period and nomenclature is presented in the

table below.

Table 4-3: The ENMEM framework: The Classification of CSR periods by Author

CSR typology Periods Description

Embryonic 1997-2003 Very light dedication globally

Nascent 2003-2008 Boom of CSR activities in Japan. Still light, however CSR concept is more spread across the industry in comparison to the previous period

Maturing 2008-2010 Significant push from CEO level to change the practices and be more socially responsible

Expectancy 2010-2015 Significant public pressure results in CSR activities being expected by the society

Mandatory 2015- CSR principles becoming formalized and more and more incorporated into business strategy of the banks given the increasing social demand

These periods identified are characterized by different levels of CSR

involvement by the employees in the banking industry. The “Embryonic” period is

mostly characterized by philanthropic activities or charitable activities on the

individual level, while more collective/team initiatives are noticeable within the

“Nascent” period. The move from collective/team initiative towards CSR

commitment at the corporate level starts to appear through the “Maturing” phase,

although it is far from being formalized at the institutional level. Full commitment

at the institutional level has been appearing in the period since 2010 up to the

present day (“Expectancy”). Therefore we would not be surprised if we see banks

competing, mirroring each other‟s activities when it comes to their CSR

commitments going forward. This is graphically presented via Employee

Involvement Factor in Figure 4-1 below.

91

Trust in the banking sector has declined progressively over time; in the

“Maturing” phase this downwards trend accelerated66. Therefore it is important to

assess what banks are doing in order to regain something which has been lost due

to their irresponsible behaviour. There is certainly still a chance for a 180-degree

reversal in the “Mandatory” phase. The sole responsibility lies with the

management of the banks and this will be covered in the form of

Recommendations for Management practice in the final section.

Figure 4-1: Employees involvement in Banks across the ENMEM framework

(Source: Author)

66 See Table 1-2.

Good Management Practice

92

4.2 CSR throughout the crises. Key findings from the Mixed-Methods

Research Design

4.2.1 CSR throughout the Asian Crisis of 1997. Qualitative Analysis

It can be concluded that banks forming the sample for theme two of the

dissertation67 did not strengthen their CSR commitment as a response to the Asian

crisis of 1997. As illustrated by Sections under Chapter 4.3, even the Labor Act,

which was passed in Thailand one year after the Asian crisis, improved the

position of Thai workers only one decade after the crisis outbreak. Moreover,

banks were under immense pressure to solve their liquidity and balance sheet

problems; thus they did not dedicate ample resources to CSR activities which

could have helped to reduce poverty, which reached its peak in Thailand in 1998.

67 Theme two of the Dissertation is “CSR Dynamics throughout the Asian crisis of 1997”. For the graphical

presentation of the dissertation themes, please see Figure 1-1b.

93

Figure 4-2: Comparing CSR activities among the two samples from the

dissertation (Source: Author)

As figure 4-2 demonstrates, CSR activities in 2008 by those banks

forming the sample for theme two of the dissertation68 are almost equally split

between Environmental focus and Investing into talent. Detailed overview of

activities is outlined in the Section 3.4.2. The additional component which does

not appear in theme one of the dissertation69 is related to those CSR activities that

support disabled people and communities.

We can infer that the Asian crisis did not act as a driver for stronger

dedication towards CSR activities. The approach towards CSR was still quite

embryonic, which mirrors the description of the assigned period in the previous

section (1997-2000). However, in a decade (1997-2008) where three different

68 Theme two of the Dissertation is “CSR Dynamics throughout the Asian crisis of 1997”. For the graphical

presentation of the dissertation themes, please see Figure 1-1b.

69 Theme one of the Dissertation is “CSR Dynamics throughout the most recent financial crisis of 2008”. For the

graphical presentation of the dissertation themes, please see Figure 1-1b.

94

periods were shifted (ENM70), we see progressive development in terms of

stronger emphasis on CSR. As Section 4.1 shows, the “Maturing” period (2008-

2010) from the ENMEM model, previously defined records active CSR

involvement by the Asian banks.

4.2.2 CSR throughout the most recent financial crisis of 2008. Event

Study and Regression Analysis

By looking into cases with significant share price moves (see Table 3-11),

a notable example is the extreme drop in the share price of the Bank of America by

21.31% on September 15, 2008. However it is noteworthy that in general market

forces and events during the crisis would neutralize CSR impact to a greater extent

than in normal market conditions (i.e. Lehman Brothers filed for bankruptcy just

three days before this day, on September 12, 2008). It is also evident that some

listed in the table have several CSR activities, whilst others have none. We also

plotted share price changes against the Global Banks Index, in order to assess the

degree of correlation between the data sample and the index, with a special focus

on CSR activities of banks in Asia and events around their share price moves. By

analysing these share price moves together with the Global Banks Index, we get a

strong correlation of 0.77. For instance, one of the extreme cases of correlation

refers to the share price performance around dates when HSBC launched the first

CSR index in Asia (-15.12% vs. -17.09% of index). Another example is Societe

Generale‟s launch of the first Chinese responsibility fund (+5.65% vs. +22.24% of

an index). Another disproportional example is related to the launch of European

low carbon index by BNP Paribas, whereby the share price moved positively

1.41% over a one week period, whilst the Global Banks Index had a positive

70 Component of the ENMEM model, which is defined in the previous section: Embryonic, Nascent, Maturing,

Expecting and Mandatory.

95

performance of almost 15%. Given the established correlation, it is worth debating

why in these illustrative instances on the one hand we have positive CSR news

related to positive share price moves, whereas on the other we have a significant

negative performance of the share price on the analogous positive news. By

observing the date around which HSBC launched the first CSR Index in Asia, it is

notable that it corresponds to the Fed announcement of the Term-Asset Backed

Securities Loan Facility (TALF)71, which was a measure to offset liquidity

concerns given the catastrophic global financial crisis. Therefore, this event per se

was triggering the share price performance of the global banking sector in that

time period and any CSR initiative, albeit its strategic and social importance was

not on the investors‟ radar. On the other hand, if we take the example of the Credit

Agricole, we see a positive impact on share price following the CSR

announcement on the Gramen Credit Agricole Foundation. In this particular

instance, we can eliminate other macro events related to the date of this

announcement, such as Quantitative Easing, a joint action by Central Banks

worldwide72, or even the announcement of financial results.

Given the contributions from the clustered Tables 4-4 and 4-5 below, we

built the following frequency graph presented as Figure 4-2 below (X axes:

percentage range; Y axes: Number of events).

71 TALF, Term Asset-Backed Securities Loan Facility, a programme created by FED at the outbreak of the 2008 crisis,

with the aim of helping consumer spending.

72 The Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve (FED), Sveriges

Riksbank, and the Swiss National Bank jointly announced reductions in policy interest rates. Media coverage:

http://www.federalreserve.gov/newsevents/press/monetary/20081008a.htm

http://www.federalreserve.gov/newsevents/press/monetary/20081008a.htm

96

Table 4-473: One Day Post CSR

Announcement Change in Share Price

Table 4-574: Pairing Number of

Events with One Day % Changes in

Share Price Post CSR Announcement

One day % change One day % change

(cont’d)

-21.31% -1.11%

-14.03% -1.04%

-11.07% -0.91%

-8.22% -0.74%

-7.08% -0.65%

-6.76% -0.21%

-5.88% -0.16%

-5.45% 0.08%

-4.55% 0.31%

-3.61% 0.64%

-3.58% 1.15%

-3.07% 1.31%

-2.82% 1.89%

-2.64% 2.93%

-2.49% 3.16%

-1.60% 3.50%

-1.46% 4.75%

-1.28%

% change in share price

Number of events

<-5 8

-4 1

-3 3

-2 3

-1 5

0 5

1 3

2 3

3 1

4 2

5 1

73 Built on the basis of the Table 3-11.


97

Figure 4-3: One Day Change in Share Price Frequency Graph

Following the same approach, we built analysis for a one-week period

post the CSR announcement to mitigate the sharp daily changes that may be a

reaction to broader market disruption during crisis period. Tables 4-6, 4-7 as well

as Figure 4-3 relate to this analysis.

98

Table 4-675: One Week Post CSR

Announcement Change in Share Price

Table 4-776: Pairing Number of Events

with One Week % Changes in Share

Price Post CSR Announcement

One week % change One week % change

(cont’d)

-19.93% -0.87%

-15.30% -0.27%

-15.12% 0.04%

-11.42% 0.53%

-9.68% 0.96%

-9.04% 1.41%

-7.95% 2.02%

-6.26% 2.76%

-6.13% 3.29%

-5.62% 5.08%

-5.36% 5.24%

-5.32% 5.65%

-4.81% 6.97%

-4.81% 8.04%

-4.30% 8.52%

-4.07% 9.96%

-2.81% 11.08%

-2.17%

% change in share price

Number of events

<-5 12

-4 4

-3 0

-2 2

-1 0

0 2

1 3

2 1

3 2

4 1

5 0

>5 8



99

Figure 4-4: One Week Change in Share Price Frequency Graph

Once we isolated the effect of macro events for the entire sample and take

a look at CSR initiatives prior to the Lehman collapse77 and all the market

disruption that followed, we got very mixed results. Out of 23 initiatives78,

negative vs. positive reaction share price moves can be summarized within the

following charts.

Figure 4-5: Share Price Performance in the isolation of macro events (Source:

Author)

77 By focusing on period prior to September 2008.

78 By focusing on period prior to September 2008 (i.e. Lehman filed for bankruptcy on September, 12th, 2008)

100

When narrowed down to the Asian banks, as can be seen from Table 3-9,

there are hardly any CSR activities employed by Asian banks in the second half of

2008, thus we do not need to analyse the potential effects of global macro events

related to the financial crisis79. However, if we observe the share price

performance of Asian banks in one-week window post the CSR announcements,

we still see a strong correlation with the global banks index over the same time

period, the correlation being 0.55 (Table 4-8).

Table 4-8: Asian Banks CSR activities and Share Price Performance at the peak of

2008 crisis

Entity-Short Name



Week after

1 week chang

e

GBI change

MITSUBISHI UFJ F

June 19, 2008 Next Generation Leaders Training Programme for

Asia and Pacific 9.61 9.02 -6.13% -3.8

IND & COMM BK-A

May 15, 2008 Disaster recovery post-earthquake

0.87 0.84 -2.81% -3.97

MIZUHO FINANCIAL

July 25, 2008 Renewable energy

cooperation between Japan and Bulgaria

4.91 4.71 -4.07% -0.57

CHINA CONST BA-H

June 03, 2008 CSR investment post-

earthquake 0.85 0.813 -4.30% -6.1

June 19, 2008 CSR investment post

flooding 0.79 0.79 0.04% -3.8

AGRICULTURAL-A

N/A

BANK OF CHINA-H

N/A

SMFG Mar 26, 2008 Establishment of CSR

department 71.58 71.96 0.53% 4.84

79 It is noteworthy that most of the turbulent events with macro effect took place in the second half of 2008, mainly

August – December (i.e. Lehman Brothers filing for bankruptcy on 12/09/2008, FED announcing TALF on

05/11/2008, Main Central Banks jointly announced easing of monetary policy on 08/10/2008, etc.)

101

This implies that even when isolating the effect of macro events, we

cannot find a strong pattern that explains the dynamics of CSR initiatives and

share price performance in the short term80. With the contribution of results of the

regression analysis, we can organize these findings as follows:

1. The level of CSR involvement does not generate impact on share price

performance of global banks in the short term.

2. There is some dependency between the involvement in CSR activities and

the share price of global banks, but only over the longer term. We believe

that this finding occurs as a result of “signalling” effect. Employing CSR

activities over a longer time period signals to investors that a firm has

long-term commitment; this perception of commitment leads to stronger

investors‟ confidence; higher investors‟ confidence brings in more

investments, which in turn has the potential to maximize return on share

price.

Finally, as our interviewees are regarded as the most knowledgeable sources

of first-hand information, findings from the case study with features of grounded

theory should identify stronger patterns81, and complement the findings resulting

from the quantitative part of the mixed research method.

80 What appears a convincing example is Grameen Credit Agricole Foundation, where share price moved positively on

this significant global news (0.31% day after and 3.29% one week after).

81 For example one of the interviewees points out the dynamics of Citizenship Activities and bank‟s share price, by

emphasizing Barclays‟ product and service offering through the lens of CSR (i.e. Barclays Green Bond).

102

4.2.3 CSR throughout the Asian Crisis of 1997 and the most recent

crisis of 2008. Qualitative/Case Study Analysis with Features of Grounded Theory

On the basis of the executed interviews as part of the case study analysis,

coupled with features of grounded theory applied (coding process) (Appendices A

– C), we organize the findings into the following four categories:

1. CEO and Top Management Commitment to CSR

2. Value Drivers for Individual Involvement in CSR activities

3. Country Focus and Alignment of Corporate Strategy with Public Policy

4. Determining Typology of CSR Activities

4.2.3.1 CEO and Top Management Commitment to CSR

As mentioned throughout the interviews, Barclays CEO represents the

core figure when it comes to the institutional emphasis on citizenship commitment.

This commitment is evident in many examples: As soon as the Libor scandal

occurred, Antony Jenkins initiated reform of company values and the firm‟s

culture. Moreover Anthony Jenkins personally spends a good portion of his time

with employees on various CSR activities; he is regularly represented in the media

and is perceived to be an exemplary new face for the socially responsible banking

industry. From the regulator‟s perspective, it appears that this is much needed

following the global turmoil of 2008. Other examples include the cooperation with

Clinton Global Initiative (CGI) since 2009, through which they mutually aim to

103

work on “business models that deliver combined social and financial return”82.

Barclays has four current CGI Commitments to Action including:

1. The Dream Accounts

2. The Women in Leadership Index

3. Healthy Communities Healthy Markets (in partnership with

GlaxoSmithKline)

4. Banking on Change

The most recent commitment to citizenship by Barclays CEO is reflected

in the fact that he became chairman of the Business in the Community Charity in

the UK (BITC)83. As our interviewees note, the identification of Antony Jenkins as

a socially responsible CEO makes them feel proud to be employed by the

institution, where citizenship is at the core of its mission. Moreover, it is worth

mentioning that in several instances Barclays‟ CEO stated that financial

endowment directed towards citizenship activities will not be correlated to

business performance and cost-cutting, which might be mandatory given the latest

financial crisis. This is contrary to the findings by Jacob (2012), whose case study

of Sulzer‟s sustainability policy84, finds that although CSR activities continued

after the crisis, “the financial pressure was very high, and all business had to fight

for survival” (p. 268). By the same token, Barclays‟ CEO approach is contrary to

the findings by Orlitzky et al (2003), Fernandez and Souto (2009) and Njoroge

(2009), who find that companies restrict their expenses on CSR activities

throughout financial crises.

82 On November 20, 2014, Antony Jenkins and Tom King (Investment Bank CEO) hosted a discussion with President

Clinton and private-sector and non-profit leaders at Barclays Offices in New York, focused on “Shared Growth:

Valuing What Matters”: www.clintonfoundation.org

83 The Evening Standard, February 25, 2015, p. 38.

84 As already mentioned in Ch. 2.3, Sulzer is one of the world‟s leading pumps and pumps‟ equipment manufacturers:

http://www.sulzer.com/.

http://www.clintonfoundation.org/

http://www.sulzer.com/

104

4.2.3.2 Value Drivers for Individual Involvement in CSR activities

Throughout the interview process and coding applied, we recognize that

all the interviewees have almost identical personal -value drivers when it comes to

their involvement85 in the company‟s commitment towards citizenship86. Once

values of employees are aligned with company‟s values, together with support by

company‟s CEO there is a strong institutional framework for citizenship

commitment. The next important factors are: country focus and cooperation with

government and NGOs in countries of focus as well as typology of CSR in these

countries of focus.

4.2.3.3 Country Focus and Alignment of Corporate Strategy with Public Policy87

Country focus results from the business objectives. As reflected within

Interviews (Appendix A), in countries such as Vietnam and Laos, there is no

business case to justify active CSR commitment. This is opposite to the

involvement in countries such as India and Indonesia, where CSR commitment is

significantly stronger. In corporate banking space, Barclays provides services to

multinational corporations that have significant presence in India, such as

Vodafone Group Plc, Siemens AG, etc. Moreover, famous Indian conglomerates

are important clients for its investment banking division, such as: Tata Group,

Aditya Birla Group, the Essar Group and Reliance Industries Ltd. This alignment

85 This is reflected in codes (Appendix C): Individual drive to get involved in citizenship activities, Passion to have

social impact, Individual commitment to CSR, Personal drive for CSR involvement, aligning employees‟ skills with

citizenship mission and initiatives, Alignment of Individual and Company‟s values to citizenship and committed focus

by employees in CSR department.

86 Please note those terms CSR and citizenship have been used interchangeably in this section. This is simply because

Barclays internally defines Corporate Social Responsibility (CSR) as Citizenship.

87 Code that best depicts connotation Alignment of Corporate Strategy with Public Policy is: “Partnership in

Performing Sustainable Action”. Derived from one of the Interviews.

105

of CSR to the corporate strategy can be defended by the excerpt from an interview

with Jaideep Khanna, Barclays India CEO, who clearly outlines that Barclays as an

institution views India as a long-term business opportunity:

“We have always made money in the investment banking business. It’s

the largest in Asia-Pacific for several years in terms of contribution to Barclays’

investment banking revenues. In the coming years, I expect that to continue. There

are multiple ways where we can work with these clients in jurisdictions where we

have a foothold that they may seek to develop. ICICI Bank has a UK subsidiary

and Axis Bank has set up in the UK, where we would love to offer them cash

management services”. 88

Alignment with public policy, throughout the cooperation with official

institutions and local NGOs, remains a quite frequent notion throughout the

interviews. In the example of India, which as previously mentioned represents a

country of strategic focus for Barclays; the government passed the Companies Act

in 2013, which governs the concept of CSR. Clause 135 of the Companies Act,

2013, encourages companies to spend at least 2% of their average net profit in the

previous three years on their CSR activities89. Moreover, only CSR activities

undertaken in India will be taken into consideration and if there is surplus resulting

from CSR activities, it is supposed to be reinvested further in CSR activities.

Guidelines provided by this Act are quite precise. For instance it is stipulated what

an effective CSR strategy should articulate (i.e. target group, geography, issue of

concern). Overall, the Government sent a clear signal that country growth is at the

88 http://www.livemint.com/Companies/9wfGorgvfmx5aC6TFFgPdJ/Barclays-banks-on-corporate-clients-

partnerships-in-India.html

89 Handbook on Corporate Social Responsibility in India. Confederation of Indian Industry. Handbook published by

PwC India (www.pwc.in): The CSR Provisions within the Act are applicable to companies with an annual turnover of

1,000 crore INR and more, or a net worth of 500 mio crore INR and more, or a net profit five crore INR and more.

The new rules, which are applicable from the fiscal year 2014-2015 onwards, also require companies to set up CSR

Committee consisting of their board members, including at least one independent director.

http://www.livemint.com/Search/Link/Keyword/ICICI%20Bank

http://www.livemint.com/Companies/9wfGorgvfmx5aC6TFFgPdJ/Barclays-banks-on-corporate-clients-partnerships-in-India.html

http://www.livemint.com/Companies/9wfGorgvfmx5aC6TFFgPdJ/Barclays-banks-on-corporate-clients-partnerships-in-India.html

http://www.pwc.in/

106

top of their political agenda and that companies operating in India must engage

with the country‟s development agenda. Therefore in order for Jaideep Khanna‟s,

Barclays India CEO, mission to materialize with respect to India being a long-term

business opportunity, complying with the Companies Act and cooperating with

NGOs platforms operating in India, remains substantial90.

4.2.3.4 Determining Typology of CSR Activities

Once country focus is defined on the grounds of strategic business

objectives and once alignment with public policy in these countries is established

(i.e. governments, NGOs), it is necessary to determine typology of CSR activities

that are employed. Coding process helped us classify the following major CSR

activities, among which Education and Job creation for young people and Social

Entrepreneurship represent the core.

1. Education and Job creation for young people

2. Social Entrepreneurship. Supporting Communities

3. Environmental concerns

Education and Job creation for young people intersects with Social

Entrepreneurship and overall Supporting Communities. However, we make a

division between these two, because Social Entrepreneurship focuses not solely on

the next generation, but also on disadvantaged communities (i.e. rural areas in

India where there is no access to banking system, supporting poor communities

across countries of focus, disaster recovery programmes in affected areas, etc.).

90 Confederation of Indian Industry (CII) outlines the following illustrative list of NGOs and CSR platforms in India:

GiveIndia, Voluntary Action Network India, Charities Aid Foundation, Oxfam India, and Confederation of Voluntary

Associations, Partners in Change, Credibility Alliance, Samhita, and Indian Confederation of NGOs GuideStar India.

Source: www.pwc.in

http://www.pwc.in/

107

Education and Job creation for young people is the building block of the

focus on the “5 Million Young Futures” programme. In terms of 2014 performance

targets, Barclays has supported 4.19 million young people in developing

enterprise, employability and financial skills since 2012 and as suggested by its

CEO it is on its track to meet their goal of supporting these 5million young futures

by the end of 2015 (Barclays Sustainability Report 2014).

All these identified three macro categories correspond to the dimensions

identified by Dahlsrud (2008). Environmental concerns do not receive as much

focus as the first two categories throughout our interviews. However, Barclays is

strongly committed to environmental concerns as it has reduced carbon emissions

by 21.7% since 2012, exceeding the target of a 10% reduction by 201591. This is

worth assessing in comparative perspective with other banks from the competitive

landscape, as environmental concerns have been present for quite some time across

various industries and abiding by the requirements for environmental

responsibility has become a license to operate (i.e. reduction of CO2 emissions

across various industries)92.

91 Barclays on Track to achieve Citizenship commitments:

https://www.home.barclays/content/dam/barclayspublic/docs/Citizenship/2015_citizenship_plan_two_page.pdf

92 Thirty seven industrial countries jointly with European Community addressed these environmental concerns via

international agreements such as: Kyoto Protocol (1997) and its Doha Amendment (2012):

http://unfccc.int/kyoto_protocol/items/2830.php

https://www.home.barclays/content/dam/barclayspublic/docs/Citizenship/2015_citizenship_plan_two_page.pdf

http://unfccc.int/kyoto_protocol/items/2830.php

108

We synthesize findings outlined in this section graphically with Figure

4.6 below.

Figure 4-6: Model of Strategic CSR. Alignment of CSR commitment with business

objectives (Source: Author)

Furthermore, we would like to adopt the “incentive check list” from Hilb

(2008) model into our findings. Hilb (2008) suggested that “depending on the

extent of responsibility, different variable proportions and long term orientation

can be chosen” (p. 135). However this model and quotation relate to the

compensatory aspects of corporate governance; it is meant to provide basis for the

integrated remuneration system. We are however adapting Hilb (2008) “vision-

based benefit dimension” (p. 135) in the context of our findings on CSR.

109

Vision-based benefit dimension should clarify the following elements:

1. Added value for customers

2. Added value for employees

3. Added value for public

4. Added value for shareholders

We adjust this model in the table below.

Table 4-9. Vision-Based Benefit Dimension in the context of CSR. (Source:

Developed from Hilb (2008), p. 135, and author‟s experience.)

Constituents Added Value by CSR

Customers

Efficiency and Accessibility of banking product and services integrated within “Go-to-Bank approach”. As an example, in the United Kingdom there are two million registered users for Barclays‟ mobile banking application. It is predicted that 40% of us will bank on our mobiles by 2020

93. Mobile application is also rolled out in India, which gives accessibility to disadvantaged

communities (See Section 3.5.2.3.).

Employees

We identify Barclays‟ leadership (i.e. CEO and management) as participatory with high continuity (i.e. shared identity)

94. Barclays CEO is responsible for the Barclays‟ Transform programme: the

introduction of a new purpose and values, with the aim of making Barclays the „Go-To‟ Bank for customers and clients.

Public Orientation towards sustainable returns, rather than speculative short-term revenues reduces public criticism, which has appeared on a regular basis since the outbreak of the crisis.

Shareholders

Commitment to CSR sends positive signals to investors that a company is orientated towards long-term strategic performance (i.e. 3 years). If emphasis lies in the long-term value approach, shareholders interest becomes more central as there is significant potential for increase in the equity/debt ratio

95.

93 http://www.barclays.co.uk/P1242655500813

94 Adapted from Hilb (2008), p. 43.

95 Adapted from Hilb (2008) and Aguilera and Jackson (2003).

http://www.barclays.co.uk/P1242655500813

110

5. Conclusions and Recommendations for Further Research and

Practice

This dissertation outlined in the introductory section that CSR as a

concept appears for the first time in the management literature in the 1950s. By

going through the company‟s archive, we found an interesting quote, which dates

back to a quarter century before the CSR concept was established:

“Responsibility differs in degree but not in essence. Each one is under

some obligation, and to the extent to which he falls short the whole community

must suffer”96.

-Speech given in 1924 by Sir William Carruthers, General Manager of

Barclays from 1918-1923

As these words imply, Barclays might have been a pioneer in the field of

CSR almost a century ago. As Dahlsrud (2008) suggests: “ the challenge for

business is not so much to define CSR, as it is to understand how CSR is socially

constructed in a specific context and how to take this into account when business

strategies are developed” (p. 6). It does seem that Barclays, under its current

management, is emphasizing this direction. Time will show whether it is becoming

a license to operate and the only way to survive in the new landscape within the

financial services industry, following the latest global turmoil. This, the ultimate

chapter of this dissertation offers some conclusions and recommendations for

further management practice and research.

96 https://www.home.barclays/news/2014/August/the-impact-of-the-war-on-banking.html

https://www.home.barclays/news/2014/August/the-impact-of-the-war-on-banking.html

111

The following section presents conclusions and recommendations for

management of Barclays Bank PLC, regarding the implementation of effective

CSR/citizenship strategy.

5.1 General Conclusions and Recommendations for Management. The

Establishment of the G.I.P.R.S framework

Given the inputs from the previous four chapters of this dissertation, we

are introducing the model, which we abbreviate as GI.P.R.S. Our underlying

conclusion is that one of the largest UK banks with significant international

presence must build an effective CSR strategy around the following four elements:

1. Global Issues

2. Positioning across countries it serves and product/services it offers

3. Reputation

4. Social Entrepreneurship

5.1.1 CSR as an instrument to tackle Issues of Global Importance

Sustainable long term players in the financial services industry need to

embrace and address societal and global issues such as: climate change and

environmental concerns, UN Millennium Development Goals for poverty

alleviation and gender equality, to name a few. The following examples

demonstrate how Barclays is dealing with these issues within its sphere of

influence:

112

Gender Equality: Barclays launched the Women in Leadership Index97,

listed on NYSE in July 2014. An example of this global issue tackled locally is

evident in the occasion of International Women‟s Day, when Barclays Community

Investment Unit in India partnered with local NGOs to raise awareness of equal

opportunities for men and women (i.e. they organized workshops with children

mothers and various other activities with children and their parents).

Figure 5-1: Barclays Women in Leadership Index (Source: Bloomberg)

Environmental management: Given the dissertation focus on Asia, it is

worth mentioning the example of the Barclays office in India, which is powered by

solar panels. Also the Singapore building incorporates state-of-art energy

97Bloomberg ticker: WIL ETN. This product is designed to provide investors with exposure to US companies with

gender-diverse executive leadership and governance. The index uses data compiled by Institutional Shareholder

Services; to be included in the index; a company must have a female CEO and/or at least 25% female members on the

board of directors, as well as meet market capitalization and trading volume thresholds.

113

management, lighting and cooling systems, as well as other environmentally

friendly features such as bicycle racks to allow for maximum environmental

compliance98. In addition to the annual goal to reduce carbon emissions by 5.2%,

an additional target we would recommend to Barclays is to define a percentage of

their buildings worldwide that should be powered by solar energy.

5.1.2 CSR as an Instrument for Positioning

Positioning refers to CSR, being used as a tool by firms to position in

countries it serves and products and services it offers. As outlined in the previous

chapter, India is a country of particular importance for Barclays, given its revenue

potential. Given the requirements of the Companies Act of 2013 described in

Section 4.2.3, specific attention has to be given to CSR activities in India and

strong cooperation with local institutions is required (i.e. government, NGOs)99.

Among notable recent examples is Green Bond: Barclays has pledged to invest a

minimum of GBP 1bn over the next year, which is double than its current

portfolio100. However, historical events within financial markets teach us that the

products and markets which face explosive growth very often have a tendency to

fail (i.e. subprime mortgages that caused the most recent financial turmoil).

According to the Climate Bond Initiative101, the supply of green bonds is expected

to reach USD 40bn this year, which is four times more than the amount issued in

2014. We recommend that Barclays, being a substantial investor in this field, stays

extra compliant going forward, by addressing the following two questions:

98 Source: Company‟s archive

99 See links to the footnote 83 in the previous chapter.

100 Green bonds are fixed income securities designed to raise capital to finance low-carbon investments. Media

coverage: http://www.businessgreen.com/bg/news/2371393/barclays-pledges-gbp1bn-green-bond-investment

101http://www.climatebonds.net/2015/01/dec-2014-media-digest-institutional-investor-reuters-business-news-network-

and-more


http://www.climatebonds.net/2015/01/dec-2014-media-digest-institutional-investor-reuters-business-news-network-and-more

http://www.climatebonds.net/2015/01/dec-2014-media-digest-institutional-investor-reuters-business-news-network-and-more

114

1. What is the reputation and investment background of the other investors

active in this field (i.e. green bond market)?102

2. Whether “green-business” commitment by issuers of green bonds is

carefully assessed and whether it represents genuine determination

towards CSR?103

5.1.3 CSR as a Reputation Management Instrument

CSR can act as an important tool for enhancing a company‟s reputation.

This is of utmost importance, following the most recent global turmoil and

frequent corporate scandals (i.e. Libor fixing, gold price fixing, foreign exchange

manipulation, etc.). As it follows from our interviews, internally in Barclays, it is

considered that CSR can act as a tool to attract the best talent. Also we recommend

that interview processes for future employees include workshops that would assess

candidates‟ past commitment to citizenship, as well as the extent to which they

want to be involved in CSR in the future (i.e. number of hours dedicated to

mentoring, helping disadvantaged etc.) . This reputational aspect is consistent with

few other findings available within the management literature. Gotsi and Wilson

(2001) suggest that in times of crisis there is fundamental need for reputational risk

management, while Gyomlay and Moser (2005) believe that treatment of staff as

well as social and environmental responsibility became the main drivers of

reputation. Nowadays, almost a decade after the latest financial crisis outbreak, we

believe that the typology of CSR activities, which goes beyond

102 If competitors are involved in this growth for “green-washing” purposes, rather than alignment with its corporate

strategy, there is a risk that the green-bond concept will be “downgraded” in the medium term.

103 Given that green-bond market is forecasting explosive growth, issuers will gradually include more institutions,

where precise assessment is required. At the moment the issuers were mainly supranational institutions, such as World

Bank. Media coverage: http://www.worldbank.org/en/news/feature/2015/02/25/green-bond-story-market-growth-

innovation

http://www.worldbank.org/en/news/feature/2015/02/25/green-bond-story-market-growth-innovation

http://www.worldbank.org/en/news/feature/2015/02/25/green-bond-story-market-growth-innovation

115

socio/environmental factors proposed by Gyomlay and Moser (2005), could shape

a firm‟s reputation104. Our findings are consistent with conclusions by Jacob

(2012), which suggest that reputation reflects on financial performance: attracting

the best people implies that you are attracting investors, who are keen to put their

funds in the responsible companies. If we reflect this onto the example of Barclays

India, attracting the best people who are keen to deliver in line with employer and

government objectives (as per Companies Act 2013), would enhance the bank‟s

reputation both locally and regionally. The image of the socially responsible

company could attract additional investments, which might increase the probability

of improved financial performance.

5.1.4 CSR as an instrument to foster Social Entrepreneurship

Within the company archives, we find the appearance of the term “social

entrepreneurship” back in 2009, when Barclays organized an annual event to host

charities they were partnering with. By analysing the sustainability reports for the

periods 2009-2015, we notice that the use of this term has increased in frequency

since the appointment of the new CEO. We synthesise few initiatives to which the

concept of social entrepreneurship has been related.

104 As effective CSR activities vary across different geographies, typology of CSR activities is outlined in detail in

section 4.2.3 (once country focus has been established).

116

Table 5-1: Social Entrepreneurship and Barclays Citizenship Activities (Source:

Sustainability Reports for the respective years and Author‟s experience)

Period Social Entrepreneurship in Barclays

2009 Social Entrepreneurship mentioned as a term during Inaugural Charities Showcase in London.

2012 Established partnership with Youth Business International (YBI). According to company data, over 7,500 entrepreneurs have been helped globally across 35 countries, which generated 25,000 jobs globally thanks to the YBI initiatives.

2013 Barclays invested circa 350,000 GBP into agricultural enterprise programmes in South Africa. Barclays provided mentoring support to the farmers, technical and enterprise raining with focus on strategic and financial planning.

2014 Focus on retail clients: how to generate safer savings, how to “climb on the property ladder” as a first time buyer, financial management and rolling mobile banking application to even inaccessible areas.

2015 Empowering Social Entrepreneurs mentioned in all strategic updates by company‟s CEO.

5.2 Specific Conclusions and Recommendations for Management.

Applying the GI.P.R.S framework

The following section will apply the G.I.P.R.S framework on the example

of Social Enterprise for Economic Development (SEED), given the relevance and

uniqueness of its projects. SEED105 is an innovative learning approach which

promotes social sensitivity and entrepreneurial thinking in a cross-cultural context.

Students from around the world work closely with villagers in underdeveloped

regions in Asia to find solutions for economic development and social change in a

joint effort. So far the SEED project has done work in Cisandori and Pangalengan

(Java, Indonesia), in the Philippines, in Malaysia, as well as in Vietnam through

collaboration with member Universities of the ASEAN learning network106. This

section outlines how SEED programme leverages our GIPRS model.

105 http://www.arc.unisg.ch/en/arc-hsg/seed

106 The ASEAN Learning Network is a network of like-minded professors in the Asian region who involved their

universities to collaborate in the development of the context-based approach to management research, teaching and

practice-learning and its current flagship SEED programme, as pioneered by Prof. Chong of the Asia Research Centre

at the University of St Gallen, Switzerland.

http://www.arc.unisg.ch/en/arc-hsg/seed

117

5.2.1 SEED Programme tackling issues of Global Importance

The SEED project tackles problems of global relevance, mainly related to

poverty and sustainable agriculture/ food production through a bottom-up

approach. The involvement of students, working jointly with villagers in poor,

difficult-to-access regions, has a direct impact on the communities served in a

specific geographical area. The mission of the SEED program thereby is to help

people to help themselves, and has had a tangible effect on improving

infrastructure (water wells, schools, etc.) and has improved micro start-up creation

(from self-sufficiency to business creation).

Equally as important, the students have repeatedly stressed that the SEED

program has empowered them move from thinking to actually performing social

enterprise activities. Many of University of St Gallen former students have started

to perform such activities on their own, or join NGOs in these areas. In this way,

the SEED project can also be understood as a conduit/ starting platform for social

enterprise.

5.2.2 SEED Programme as an instrument for Positioning

Barclays, being the second largest British bank, has backed the funding of

the national carrier, British Airways, with the following strategic plan:

construction of the world‟s first facility to convert landfill waste into jet fuel. This

project is known as Green Sky: approximately 575,000 tonnes of post-recycled

waste will be converted into 120,000 tonnes of clean liquid fuels; British Airways

has committed to purchase on a yearly basis all of the jet fuel produced at

118

competitive prices107. We can draw a parallel between this example which aligns

CSR to Barclays‟ corporate strategy (i.e. a product that firm wants to position and

offer) and the SEED programme. Analogously to the Green Sky Project, the SEED

programme also raises environmental awareness in applying creative ideas to solve

existing problems on environmental pollution and energy needs. For example, in

villages in Asia108 , SEED is making a proposal to centralise a villages‟ cows to

minimize pollution and for ease of collection of cow dung for economic use as

fertilizers and energy source.

5.2.3 The SEED Programme as a Reputation Management Instrument

The idea is to have students learn to work cross-culturally with local

students in an Asian village on new enterprise creation, which will eventually

contribute towards the development of the self-sustainable village economy.

Students therefore act as transformational leaders, as they work to change attitudes

and work values of the villagers and provide economic opportunities for the

villagers. Throughout their engagement students sharpen their intercultural,

interpersonal and team-building skills as each team learn to empathise with

villagers, so as to perceive and explain things from the villagers‟ perspective, in

order to creatively overcome the villagers‟ objections and solve their problems, as

they work together to develop a viable business plan for the villagers to

implement. Therefore, CSR within the SEED programme is a tool to attract and

retain best talent. As an educational programme, SEED trains students to become

transformational leaders who are creative, innovative and entrepreneurial. These

are exceptional abilities relevant and required in the current rapidly changing

world which has to be sustainable (i.e. resource-wise and pollution-wise).

107 http://www.ciwm-journal.co.uk/archives/7214

108 Assuming villages in countries that fit strategic focus of Barclays. This is explained in detail within Section: 4.2.3.

http://www.ciwm-journal.co.uk/archives/7214

119

5.2.4 The SEED Programme as an instrument to foster Social

Entrepreneurship

The SEED Programme is about the practice of social entrepreneurship to

empower villagers in Asia to become creative and entrepreneurial and to solve the

problems faced by the poor villagers in their village. Students practice social

entrepreneurship by identifying and seizing business opportunities for the villagers

based on the resources which are available to villagers through the business plan.

Students and facilitators spend up to two weeks at the village in each SEED project

to work selflessly and exclusively for the good of the villagers. In doing so, they

support communities, eventually leading not only to successful and sustainable

enterprises, which means better livelihoods and new and better jobs, but also to

eventually sustainable economic development at the village or region of the village

level109. Back in 2013, due to their relevance and appropriateness, Barclays

sponsored similar projects in South Africa, another country of significant

importance for Barclays corporate strategy110.

5.3 Recommendations for Further Management Research

The frameworks outlined in this dissertation could be used as a starting

point for further studies. Further research could explore to what extent the

frameworks and patterns established, particularly as a result of the Case study with

features of grounded theory, apply to other players in the financial services

industry.

109 As per testimonial of University of St. Gallen PhD Candidate Melk Bucher, one of the SEED programme

facilitators; based on the students‟ feedback over the years, the project not only helps the communities served, but also

the students, who were able to practice real-life entrepreneurship at the village and creatively sole problems of

villagers through empathy as transformational leaders. This learning is also clear from the learning diaries written by

the students as part of the programme.

110 Barclays Africa is one of Africa‟s major financial services providers.

120

We suggest three aspects which could be fruitful for further management

research. Those aspects address CSR in the context of: organizational structure,

incentives and compensation policies as well as regulatory perspective. As a

priority we recommend that further research in the field of CSR might address the

following research question: How to “institutionalize” CSR at the organizational

level, taking into consideration regulatory requirements, post the most recent

financial crisis?

Given that the impact of the latest global turmoil is still significantly

affecting the world economy, a wave of consistent redundancies or various cost

cutting initiatives across various industries is expected. What is worth assessing

further is the dynamics between CSR and organizational structures of the firm. A

question that deserves further attention could be formulated as follows: How to

execute socially responsible cost-cutting programmes and as a result re-establish

efficient organizational structure with maintained commitment towards CSR?

Another area which deserves further research interest is related to the

motivation of the work force to be involved in CSR in the context of the

compensation mechanisms. Therefore, another germane research question could

be: How to establish a positive correlation between CSR involvement and

company‟s rewards? This is a very relevant aspect, as the majority of banks have

historically rewarded their staff on the basis of absolute revenues that deals have

brought to the firm. What remains challenging is how to measure employees‟

values and how to establish compensatory mechanisms to reward or penalize

employees depending on the level of their CSR involvement. Visser‟s (2010)

comment that “executive greed, banking greed, financial market greed, corporate

greed and capitalist greed had together acted like a cancer in the body which ended

up destroying the health of its host society” (p. 231) is of particular relevance here.

Ultimately, given the increasing importance of the role of the regulator

for the financial services industry, it is worth assessing the degree towards which

121

definition and measurement of consistent CSR commitments is moving. Hence, we

feel that the question whether CSR is becoming obligatory or the “license to

operate”, post the most recent crisis, calls for further elaboration in the

management research.

122

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129

Appendix A: Full Transcripts of Interviews

All the interviews were recorded and put into notes format on the day after the

interviews were conducted. Complete Interviews have been analysed with the

Supervisor and Co-Supervisor and submitted to the Programme Committee for

their Review.

130

Appendix B: Open Coding

The entire coding process for each and every interview have been analysed with

the Supervisor and Co-Supervisor and submitted to the Programme Committee for

their Review (24 pages).

Table A-1. Coding Process. Sequence of Interviews.


Interview Conceptualizing\Community centres


Interview Conceptualizing\Community Support

CSR activities are fundamental for supporting our community.


It is about building capacities and supporting growth, creating Jobs and this is a strongly supported by the Indonesian government.


Banks started competing in CSR. Banks have similar focus. It could generate comparative advantage only if you work in cooperation with Government. We do have to use CSR to work more with Government and fill their gaps.




We are starting in Asia and plan to roll out these initiatives in Africa and in the States. The process is led by headquarter in London.

Interview Conceptualizing\Coordination of CSR activities at group vs. Local level

Barclays Asia CSR Committee consists of 5 business heads (i.e. Barclays Wealth, Barclays Investment Banking, Barclays Corporate Banking, etc.). Chair of Asia Pacific Committee is representing Asia within the Global Committee. All these regional committees are represented into Global Committees, so technically everything feeds into global reporting lines.

Interview Conceptualizing\Corporate Citizenship

Citizenship is at the core of everything Barclays does

Interview Conceptualizing\Corporate Social Responsibility as a license to operate


Interview Conceptualizing\Create jobs We focus on skills training, rather than disaster recovery.

Interview Conceptualizing\Create jobs

Japanese companies focus on innovation and technology rather than job creation, which is contrary to the CSR activities in Hong Kong and Singapore, where employment is very high on government radar.

Interview Conceptualizing\CSR as a tool to attract and retain talent

CSR is seen as talent attraction and retention tool. If company is not active in CSR activities in Asia, it cannot attract best talent.

Interview Conceptualizing\CSR focus in countries with opportunities

Our presence in Asia is mostly reflected in developed Asian economies.

Interview Conceptualizing\CSR in Asia From Barclay‟s perspective we have invested in countries where we have market presence (Barclay‟s presence in Asia is reflected in investment banking operations).

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Interview Conceptualizing\CSR investment

We do not have business presence in countries such as Vietnam or Laos. We simply do not see opportunities from the business side. Given the limited resources, we are focused mainly on CSR activities within these developed markets. Indonesia, for instance is a huge emerging market; it is the third largest country in the world when it comes to population. We do a lot of investment in CSR in Indonesia.

Interview Conceptualizing\CSR measurement

It is extremely difficult to find a measure on CSR. We work closely with various consultants in order to try and measure impact of CSR. However, there is no control factor.

Interview Conceptualizing\Environmental concerns

Environment 2


Environmental concerns: 2

Interview Conceptualizing\Ethics CSR is a license to operate. It is obligatory and it is increasingly expected. People tend to ask what the company does.

Interview Conceptualizing\Financial crisis

Official headcount was established only in 2011, three years after the last financial crisis outbreak.

Interview Conceptualizing\Financial crisis

Art, culture and media support: 1 This is less common, particularly when it comes to Singapore Support for families (social programmes) and helping SMEs: 3 We are very active across Hong Kong, Singapore and Japan; we are doing a strong push for these aspects and social entrepreneurship. We want to help SMEs to grow. Environmental concerns: 2 Other (if so please specify categorization): N/A We are working on programmes that focus on children and women.

Interview Conceptualizing\Gender equality

We are working on programmes that focus on children and women.

Interview Conceptualizing\Partnership in performing sustainable action

It is all about partnership and collaboration. In terms of collaboration with Government for Barclays in Asia we do not coordinate our CSR activities. But the trend is essential as we tend to fill the gaps that government cannot do. CSR activities are expected by the government across the country, as it is license to operate.

Interview Conceptualizing\Reporting on CSR activities

Company is expected to report its CSR activities.

Interview Conceptualizing\Similarities and differences between countries in terms of CSR

Comparing across countries, landscape is pretty much the same, most similar countries being Hong Kong and Singapore. Japan is quite different.

Interview Conceptualizing\Social entrepreneurship

We focus on social innovation facility, running projects that have huge social value and there is business proposition in it.

Interview Conceptualizing\Social entrepreneurship

Support for families (social programmes) and helping SMEs: 3 We are very active across Hong Kong, Singapore and Japan; we are doing strong push for these aspects and social entrepreneurship. We want to help SMEs to grow.

Interview Conceptualizing\Supporting affected

Disaster Recovery: 2


While Disaster Recovery is reactive rather than pro-active.


We are working on programmes that focus on children and women.

Interview Conceptualizing\Supporting art and culture

Art, culture and media support: 1 This is less common, particularly when it comes to Singapore

Interview Conceptualizing\Supporting talent

Invest in Talent: 3

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Interview Conceptualizing\Supporting talent

Invest in talent is ongoing; it is getting significant traction;

Interview New Code\Alignment of CSR activities with business strategy

From Barclay‟s perspective we have invested in countries where we have market presence (Barclay‟s presence in Asia is reflected in investment banking operations). However, our presence in Asia is mostly reflected in developed Asian economies. We are not having business presence in countries such as Vietnam or Laos. We simply do not see opportunities from the business side. Given the limited resources, we are focused mainly on the CSR activities within these developed markets. Indonesia, for instance is huge emerging market; it is the third largest country in the world when it comes to population. We do a lot of investment in CSR in Indonesia. We focus on skills training, rather than disaster recovery.

Interview New Code\Citizenship It certainly did. Moreover, Barclays increased its business presence throughout the latest financial crisis. It is important to mention that CSR is a license to operate, stakeholders require it.

Interview New Code\Citizenship as a corporate value

Essentially, citizenship is in the core in everything Barclays does.

Interview New Code\Community Support

CSR activities are fundamental for supporting our community. We focus on social innovation facility, running projects that have huge social value and there is business proposition in it.

Interview New Code\Community Support at the time of crisis

Invest in Talent: 3 Disaster Recovery: 2 Environment 2 Other (if so please specify categorization): N/A Invest in talent is ongoing; it is getting significant traction; while disaster Recovery is reactive rather than pro-active.

Interview New Code\Community support programmes since the crisis outbreak

Art, culture and media support: 1 This is less common, particularly when it comes to Singapore Support for families (social programmes) and helping SMEs: 3 We are very active across Hong Kong, Singapore and Japan; we are doing strong push for these aspects and social entrepreneurship. We want to help SMEs to grow. Environmental concerns: 2 Other (if so please specify categorization): N/A We are working on programmes that focus on children and women.

Interview New Code\Coordinating and implementing CSR initiatives

It is extremely difficult to find a measure on CSR. We work closely with various consultants in order to try and measure impact of CSR. However, there is no control factor. It is all about partnership and collaboration. In terms of collaboration with Government for Barclays in Asia we do not coordinate our CSR activities. But the trend is essential as we tend to fill the gaps that government cannot do. CSR activities are expected by the government across the country, as it is license to operate.

Interview New Code\Corporate Governance

Barclays Asia CSR Committee consists of 5 business heads (i.e. Barclays Wealth, Barclays Investment Banking, Barclays Corporate Banking, etc.). Chair of Asia Pacific Committee is representing Asia within the Global Committee. All these regional committees are represented into Global Committees, so technically everything feeds into global reporting lines.

Interview New Code\CSR as a rebranding tool

Banks started competing in CSR. Banks have similar focus. It could generate comparative advantage only in you work in cooperation with Government. We do have to use CSR to work more with Government and fill their gaps.

Interview New Code\Effective CSR programmes

Banks started competing in CSR. Banks have similar focus. It could generate comparative advantage only in you work in cooperation with Government. We do have to use CSR to work more with Government and fill their gaps.

133


Interview New Code\Expectation of official institutions with respect to CSR activities

Company is expected to report its CSR activities. Comparing across countries, landscape is pretty much the same, most similar countries being Hong Kong and Singapore. Japan is quite different. Japanese companies focus on innovation and technology rather than job creation, which is contrary to the CSR activities in Hong Kong and Singapore, where employment is very high on government radar.

Interview New Code\Shareholders support


Interview New Code\Support by government to create jobs and growth

It is about building capacities and supporting growth, creating job and this is a strongly supported by Indonesian government.

Interview New Code\Sustainability Barclays increased its business presence throughout the latest financial crisis. It is important to mention that CSR is a license to operate, stakeholders require it.

Interview Conceptualizing\Bottom of the Pyramid concept

It is important to note that we started CSR at Barclays at the bottom of the pyramid (BOP)


Central Bank of Sri Lanka as well as other authorities was constantly pleased by us fulfilling our objectives.


Government of India recently said that all organizations (possessing certain parameters in terms of turnover, etc.) are required to satisfy particular threshold in terms of CSR.

Interview Conceptualizing\Cooperation with selected NGOs

It is important to mention the importance of local NGOs. NGOs we cooperate with have to be aligned with these three pillars. Our focus is on four cities in India across North, South and West. These are Mumbai, Delhi, Chennai and Poonch. NGOs that are fulfilling our CSR objectives and initiatives have to be possessing good footprint within these cities.

Interview Conceptualizing\Create jobs Barclays follows CSR spirit. We are going beyond obligatory; it is something we want to build in our culture.

Interview Conceptualizing\CSR as a business strategy tool

We are now taking a step forward, using CSR as a strategy tool: how to incorporate employability, creating enterprise and financial literacy within our business objectives.


It was strategic to do it. Manufacturing industries always attached importance to CSR activities in one way or another (i.e. working on programmes to help workers send their kids to school).


These are early days as of yet to make such a judgment. Going forward it will become key to what we do as a firm and definitely something for which we will be recognized.

Interview Conceptualizing\CSR presence vs. Business presence

As a bank we do not have presence in Sri Lanka, but we were active in terms of CSR activities. A lot of times we would remotely get in touch with client, and our investment banking department had a number of relationships.

Interview Conceptualizing\CSR presence vs. Business presence

We are now taking a step forward, using CSR as a strategy tool: how to incorporate employability, creating enterprise and financial literacy within our business objectives.


Environment 1, not the key to what we do in India Other (if so please specify categorization): N/A Environment is not the most important aspect for us in India as of yet. But Barclays will look into this more going forward. For instance by launching Green Bond; we signal our intention to bring the focus back to environment.

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Appendix C: Full List of Codes

Table A-2. Full List of Codes in the Sequential Order


Community centres Alignment of CSR activities with business strategy

Community Support Citizenship

Cooperation with official institutions (i.e. government) Citizenship as a corporate value

Coordination of CSR activities Community Support

Coordination of CSR activities at group vs. Local level Community Support at the time of crisis

Corporate Citizenship Community support programmes since the crisis outbreak

Corporate Social Responsibility as a license to operate Coordinating and implementing CSR initiatives

Create jobs Corporate Governance

CSR as a tool to attract and retain talent CSR as a rebranding tool

CSR focus in countries with opportunities Effective CSR programmes

CSR in Asia Expectation of official institutions with respect to CSR active

CSR investment Shareholders support

CSR measurement Support by government to create jobs and growth

Environmental concerns Sustainability

Ethics Community Investment

Financial crisis Company focus beyond obligatory

Gender equality CSR alignment with company mission and brand

Partnership in performing sustainable action CSR as a core of company‟s business strategy

Reporting on CSR activities CSR as a response to crisis

Similarities and differences between countries in terms of CSR

CSR as mandatory field

Social entrepreneurship Effective CSR activities

Supporting affected Global CSR initiatives implemented in India jointly with local

Supporting art and culture Specific social responsibility focus depending on specific region

Supporting talent Typology of CSR activities

Bottom of the Pyramid concept CSR as a branding tool

135

Cooperation with selected NGOs Lack of CSR activities in Central Asia

CSR as a business strategy tool Alignment of individual and business strategy with impact for s

CSR presence vs. Business presence Business strategy with impact for society

Government requirements with respect to CSR Citizenship as core value of the bank‟s strategy

Helping employees in industries and service sector Global coordination and implementation of CSR activities

Helping young Global social mission aligned to strategy

Philanthropy Individual initiative and company‟s support

Pillars of Community Investment Significant Community Investment

Variety of CSR activities across different Asian countries Supporting disadvantage young

Countries lacking in CSR aspects Citizenship as a core of personal as well as employer‟s mission

CSR as a useful additional activity CSR activities with global impact

CSR in embryonic phase in Central Asia CSR as a tool to develop capabilities of young people and help

Management initiative to perform CSR initiatives Active approach to CSR

Minimal commitment to CSR activities Alignment of individual and company‟s values to citizenship

Spreading CSR spirit across employees and client base Company‟s support for CSR commitment

CEO‟s commitment to citizenship Consistent commitment and teamwork

Company‟s support Consistent commitment to CSR activities

Cooperation with charities CSR activities focused on education

Coordination of CSR activities between headquarter and local of

Focus on delivering effective CSR programmes

CSR as talent attraction and retention tool Focused joint citizenship approach

Focused CSR activities Increase in CSR since the financial crisis

Helping and Educating Young Institutional framework for CSR activities

Helping Young people finding jobs Mentoring and teaching new generations

Increased public awareness and pressure Global importance of CSR for society

More emphasis on citizenship CSR post crisis More Focus on citizenship post financial crisis

Personal drive for CSR involvement Public awareness

Personal values and CSR Reformulating business strategy

Public knowledge Setting CSR strategy at company level

Public pressure and stakeholder expectations Stakeholder‟s role (expectations)

136

Teamwork CSR as a reputational tool

Value drivers for citizenship involvement Company values linked to CSR

Active support to CSR by senior management CSR as a benefit to society

Aligning employees skills with citizenship mission and initiative

Supporting community

Coordination of CSR activities globally Alignment of company‟s values/culture with citizenship activity

Country specific CSR programmes Crisis affecting urge for CSR

CSR as a tool to increase involvement in sports Crisis not affecting financial endowment of a firm

CSR initiatives directed towards global issues CSR as an expected activity going forward

Focus on sports CSR commitment through company‟s product offering

Helping disadvantaged communities Collaboration and coordination of CSR initiatives

Higher public expectations Effective vs. Non effective CSR strategy

History of CSR involvement Focus on CSR activities aligned with core values and business s

Importance of teamwork Public pressure and stakeholder expectations

Individual drive to get involved in citizenship activities Strategic versus non-strategic CSR initiatives

Job creation Structuring CSR activities around core values of the firm

More public emphasis on CSR activities CSR as a comparative advantage

New reality and high expectations of Citizenship involvement

Expectations and CSR commitment in developed vs. Developing

Typology of CSR investment Passion to have social impact

Understanding importance of mechanism of CSR programmes

Significant resource allocation for community support

Company‟s values Stakeholder expectations post financial crisis

CSR as expected and mandatory Trust in future of CSR

CSR initiatives in India

Cultural aspects of CSR

Education

Government pressure to be active in CSR activities

History of CSR in India


Individual commitment to CSR

Link of CSR and business strategy of the firm

137

Public awareness

Recent institutional support to CSR activities

Spreading awareness across country

Teamwork and volunteering CSR initiatives

Workshops to foster development

Alignment of CSR activities and business strategy

Assessing need for CSR

Banks redefining their purpose and values

CSR as a core principle

Defining Measurement of CSR

Measuring CSR

Need for CSR activities in developing countries

New dimension of CSR after financial crisis

Potential negative effect of non CSR involvement

Stakeholders‟ role

Barclays mission to become champion in CSR

Citizenship plan

Consistent commitment to CSR

Crisis and reputational issue

CSR as a response to improve reputation of the banks

CSR as a tool to improve banking standards

CSR as comparative advantage

Filling citizenship gaps

From corporate finance to corporate citizenship

Individual initiative

Limited resources in terms of headcount

Supporting poor communities

Colleague engagement

CSR as an extracurricular activity

CSR target

Personal achievement with citizenship activities

138

Strong commitment to CSR

Business rationale (strong business case) for CSR

Citizenship as a corporate heritage

CSR as a tool fostering innovation

Financial commitment to CSR activities

Focus on education and creating jobs

Helping disadvantaged people

Importance of CSR for company‟s performance (i.e. share price)

Importance of leadership for CSR

Inefficient “advertising” of historic CSR commitment

Perception on need for citizenship programmes

Progress of CSR: from expected (before/now) to desirable (now)

Usual candidates for CSR activities

Citizenship platform

Commercial opportunities for CSR activities

Company‟s commitment to society

Competitive landscape of CSR

Concept of shared values

Coordination of CSR activities at group level

Difference of CSR activities for investment vs. Corporate bank

Effective CSR activities

Filling CSR gaps

Focus on CSR activities aligned with CV and BS

Focus on CSR activities with commercial rationale

Match of profitability, responsibility, and positive impact

More emphasis on society post crisis

Negative impact of FC for rep of banks: Crisis and rep issue

Senior management commitment to CSR

Stakeholder approach

CSR initiatives desirable

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Impactful CSR initiatives in developing world

Institutional initiative prevailing individual efforts

Aligning personal values, beliefs and career choice

Alignment of business strategy and citizenship

Committed focused by employees in CSR department

Community investments

Coordination

Importance of network

Less focus on volunteering by workforce

Monetary sacrifice in favour of citizenship

More CSR activities in developed world

Supporting communities

Transparency and regulation

Volunteering

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MILOŠ STAROVIĆ

Birth date: 21/11/1985

Current address: 22 Chase House, 1 Hansel Road, NW6 5DQ, London, UK

Cell-phone: +447554427799

E-mail: [email protected]

PROFESSIONAL EXPERIENCE

June 2008- BARCLAYS BANK, Vice President, London, United Kingdom

Responsible for Risk Solutions Group coverage of financial institutions

in Russia, CIS and CEE; Working jointly with Debt Capital Markets

team within CEEMEA region. Previously covered flow and structured

business across various asset classes within Distribution department for

countries in Southern Europe.

Fall 2006 ERNST&YOUNG, Trainee, Moscow, Russia

Summer 2005 DELOITTE Central Europe, Intern, Belgrade, Serbia

ACADEMIC PERFORMANCE

2013- UNIVERSITY OF ST GALLEN, St Gallen, Switzerland

PhD Candidate in Business Administration. Major in International

Business.

PhD thesis: “CSR within banking industry throughout financial crises:

Focus on banks in Asia during two financial crises: 1997 and 2008”.

Supervisor: Prof. Li-Choy Chong. Co-Supervisor: Prof. Martin Hilb.

141

2004-2009 UNIVERSITA COMMERCIALE LUIGI BOCCONI, Milan, Italy

2009 Master of Science (MSc) degree in International Management with

Suma Cum Laude

MSc thesis: “Internationalization of Universal Banks: Value drivers

and Organizational models”; Mentor: Prof. Markus Venzin. President

of Commission: Prof. Robert Grant.

2007 Bachelor of Science (BSc) degree in International Economics

Scholarship fellow of Italian Government and Lombardy region during

the entire duration of BSc and MSc programme.

Fall 2008 COPENHAGEN BUSINESS SCHOOL, Copenhagen, Denmark

M.A, Joint Master Degree- Semester abroad as part of CEMS

Programme.

Fall 2006 MOSCOW STATE INSTITUTE OF INTERNATIONAL

RELATIONS (MGIMO), Russia

Exchange-Programme Completion.

July 2006 WIRTSCHAFTSUNIVERSITÄT WIEN, Vienna, Austria

Summer-fellow, 17th International Summer Academy in Supply Chain

Management and Strategy.

LANGUAGES

Serbian and Croatian (mother tongue), English, Russian and Italian (fluent),

Spanish (intermediate)

142

RECOGNITION

Bachelor thesis incorporated in book “Organizing Entrepreneurship” –

Grandori, Gaillard (May 2011)

Scholarship from Bocconi University for the academic years from 2004-

2009

Scholarship from Serbian Ministry of Education and Sport and Embassy

of the UK for the remarkable results in High School Curriculum 2003-

2004

OUTSIDE AFFILIATIONS

June 2014- ZAGREB SCHOOL OF ECONOMICS and MANAGEMENT,

Zagreb, Croatia

Advisor to the Associate Dean for International Relations.

Sept 2015- SION-MANNING RC GIRLS SCHOOL, London, UK

Member of the Board of Governors.

Sept 2015- ONE YOUNG WORLD (OYW), Ambassador, London, UK

Appointed to represent Barclays and UK on the OYW Summit in

Bangkok 2015; global forum for young leaders aged 18-30.

OTHER INTERESTS

Hiking, Roller-skating, Ice-Skating, Travelling, Reading, Politics

milos starovic prof. dr. li choy chong prof. dr. martin hilbfile/dis4499.pdfcorporate social...

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