The Effects of Corporate Social Responsibility Reporting on the Financial Performance of Nigeria Money Deposit Banks
Chapter One
Objective of the study
The main objective of this study is to examine the impact of CSR on financial performance of selected Nigerian banks. The specific objectives are to:
- examine the impact of CSR on ROE of selected Nigerian banks
- examine the impact of CSR on ROA of selected Nigerian banks
- examine the impact of CSR on EPS of selected Nigerian banks.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
Corporate Social Responsibility:
History and Origin Some American executives in the 1950s laid the groundwork for the concept of corporate social responsibility (CSR) and the idea that corporations should work toward sustainable development. What did they intend to do? Businesses, in their view, would benefit more from considering their social and environmental impacts alongside traditional financial ones. Paying employees more means more money out of the company’s pocket, but it also means more likely sales of the company’s products. If a company takes measures to lessen the environmental impact of its operations, it can save money in two ways: in the short term, by avoiding fines, and in the long term, by reducing the likelihood and severity of natural disasters. In his 1953 book “The Social Responsibility of the Businessman,” Howard Bowen laid out the first “recognized” definition of CSR (CSR) and provided an argument for why businesses should care about social and environmental responsibility. 10 Additionally, CSR became an issue in the latter half of the twentieth century as environmental concerns expanded alongside economic and social concerns. People started being more critical of businesses and demanding that they do the right thing in terms of the law, the environment, and social responsibility. Many nations’ governments enacted statutes in the 1990s and 2000s that established the framework for contemporary CSR. For the first time, French NRE laws mandated that businesses share their progress on sustainable development. There were then a number of regulations enacted, such as the Grenelle Laws and the Laws of Vigilance, which were enacted to ensure the enforcement of these statutes. After that, companies realized they needed to start spending money on CSR if they wanted to stay competitive. At this point, CSR was recognized and utilized as a resource for management, communication, and business growth. CSR gained prominence as a means to boost the public’s perception of businesses, enhance internal communication and output, and reduce overhead by fostering more effective use of energy and materials. Given the magnitude of the social and environmental problems that our planet now faces, it’s unusual to come across a company of any size that doesn’t have a CSR (CSR) report, a CSR department or person in charge, or at the very least, a CSR communication strategy. Many other researchers aimed to verify and recount a more precise definition of CSR throughout the 1960s (Iqbal et al, 2013). Business decisions and actions that go beyond an organization’s immediate financial and technological needs are what Davis (1960) calls CSR. The concept of CSR is now ubiquitous in the business world. Companies of a certain size are urged to take responsibility for their actions in the community. However, there is no consensus on how to define CSR in either the business or academic communities. Several academic disciplines have paid more attention to Corporate Social Performance (CSP) and CSR since the 1970s (Carroll, 1979). 11 Modern businesses ought to be champions of the principle of CSR. CSR refers to any action taken by a company to promote sustainable development. To be considered sustainable or responsible, a business or sector must be able to maintain its operations over time, have a net positive effect on the community, and not harm or destroy its natural surroundings. However, there are additional contexts in which a business or sector is said to be acting sustainably, including the ways in which its customers choose to eat, use technology, travel, and interact with one another. Concerns about the environment, economy, and society all increased in the second half of the twentieth century, making CSR a topic of increasing importance. Companies are under increasing scrutiny from consumers who expect them to uphold a higher standard of legal, environmental, and social responsibility.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine The effects of corporate social responsibility reporting on financial performance of Nigeria money deposit banks. Selected banks in Lagos State form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the effects of corporate social responsibility reporting on financial performance of Nigeria money deposit banks. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the effects of corporate social responsibility reporting on financial performance of Nigeria money deposit banks
Summary
This study was on the effects of corporate social responsibility reporting on financial performance of Nigeria money deposit banks. Three objectives were raised which included: examine the impact of CSR on ROE of selected Nigerian banks, examine the impact of CSR on ROA of selected Nigerian banks and examine the impact of CSR on EPS of selected Nigerian banks. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected banks in Lagos State. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
This study investigated the effect of Corporate Social Responsibility on financial performance of Deposit Money Banks (DMB) in Nigeria. The impact of Corporate Social Responsibility on Return on Asset is positive but negative significant impact on Return on Asset, it also has a negative impact and significance on the Return on Equity, Earnings Per Share. Corporate Social Responsibility therefore has a negative assertion on Deposit Money Banks in Nigeria. This is because Organisations, Banks, Firms don’t pay substantial amount of money for their Corporate Social Responsibility initiatives; they mostly pay either to gain recognition in the 56 Society or because Government requires them to do so. As no regulation is put in place some companies don’t see the need to invest in their Corporate Social Responsibility therefore paying little or no amount for CSR and this leads to low or negative impact of Corporate Social Responsibility on the financial performance of Deposit Money Banks in Nigeria. This study thereby concludes that; banks should give enough attention to their corporate social responsibility in order to enhance their overall financial performance
Recommendations
In order for CSR to have a constructive effect and meaningful significance on Nigeria’s DMB, the researcher suggested the following recommendations; a. Deposit Money Banks can benefit greatly from engaging in CSR because of the positive effect it has on their bottom line. More money from deposit-taking institutions should go toward CSR projects so that those projects can in turn benefit the institutions’ bottom lines. b. Deposit Money Banks should contribute more to the Corporate Social Responsibility initiatives in order to improve their profitability c. Deposit Money Banks and other sectors of the Nigerian economy would benefit from a greater focus on Corporate Social Responsibilities (CSR) if the federal government of Nigeria were to enact regulations governing contributions to CSR. d. Government can also allocate a certain percentage and proportion of Corporate Social Responsibility Initiatives to Deposit Money Banks and other sectors of the economy.
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