CORPORATE SOCIAL RESPONSIBILITY IN THE NIGERIA BANKING SECTOR (A CASE STUDY OF SELECTED COMMERCIAL BANKS IN AUCHI, EDO STATE)

CHAPTER ONE

INTRODUCTION

• BACKGROUND TO THE STUDY

Corporate social responsibility (CSR) as a concept entails the practice whereby corporate entities voluntarily integrate both social and environment upliftment in their business philosophy and operations. A business enterprise is primarily established to create value by producing goods and services which society demands. The present-day conception of corporate social responsibility (CSR) implies that companies voluntary integrate social and environmental concerns in their operations and interaction with stakeholders. The notion of CSR is one of ethical and moral issues surrounding corporate decision making and behaviour. Thus, if a company should undertake certain activities or refrain from doing so because they are beneficial or harmful to society is a central question. Social issues deserve moral consideration of their own and should lead managers to consider the social impacts of corporate activities in decision making. However, some arguments that the contribution of concepts such as CSR is just a reminder that the search for profit should be constrained by social considerations (manuel and Lucia, 2007) and increasingly CSR is analyzed as a source of competitive advantage and not as an end in itself (Branco and Rodrigues, 2006). In effect, the concept of CSR has evolved from being regarded as detrimental to a company’s profitability, to being considered as some – how benefiting the company as a whole, at least in the long run.

Today, managers of Nigerian banks have found a need that the environment in which they operate should be provided for because their intermediate and macro environments have a direct impact on the attainment of the corporate goals. Objectives and mission statement. The purpose of all profit- making organizations is to maximize profit and in turn minimize cost, through optimal utilization of available resources to achieve the best results they are capable of profitability is an important factor to all banks, because it is one of the major purpose for which the banks are established.

CSR involve a business identifying its stakeholders groups and incorporating their needs and values within the strategic and day-to-day decision making process. Thus a means of analyzing the inter-dependent relationships that exist between business, the economic systems and the communities within which they are operating. CSR is a means of discussing the extent of obligations a business has to, its immediate society; a way of proposing policy ideas on how those obligations can be met; as well as tool by which the benefits to a business for meeting those obligations can be identified (CSR Guide). CSR is also referred to as ‘corporate’ or ‘business responsibility’ ‘corporate’ or ‘business citizenship’, ‘community relations’, ‘social responsibility’. It involves the way organizations make business decision the products and services they offer, their efforts to achieve an open and honest culture, the way they manage the social, environmental and economic impacts of business activities and their relationships with their employees, customers and other key stakeholders having interest in the business and its operations. The motivations to engage in CSR are varied – response to market forces, globalization, consumer and civil society pressures, corporate objectives, etc. the activities of these firms are therefore visible because of their global reach. As such there is a higher incentive to protect their brands and investments through CSR. The CSR activities in this sector are mainly focused on remedy the effects of their business activities on the local communities. So, the firms operating in this sector have often provided pipe – borne waters, hospitals, schools, etc.

The Nigerian banks seek to conduct CSR so that they meet their financial, social and environmental responsibilities in an aligned way. At its core, it is simply about having a set of values and bahaviours that underpin its everyday activities, its transparency, its desire for fair dealings, its treatment of people, its attitudes towards and treatment of its customers and its links into the community. As a result, the environmental aspect of CSR is seen as the duty to cover the environmental implications of the company’s operations, products and facilities; eliminate waste and emissions; maximize the efficiency and productivity of its resources; reward for externalities and minimize unethical practices that might adversely affect the enjoyment of the county’s resources by future generations. In the emerging global economy, where the internet, the news media and the information revolution shed light on business practices around the world, companies are more frequently judged on the basis of their environmental stewardship (CIBN). Partners in business and consumers want to know what in inside a company. This transparency of business practice means that for Nigerian Banks, CSR is no longer a luxury but a requirement.

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