The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1754-243X.htm

IJLMA
52,2
The effect of corporate
governance elements on
corporate social responsibility
82 (CSR) reporting
Empirical evidence from private commercial
banks of Bangladesh
Md. Habib-Uz-Zaman Khan
Faculty of Business and Economics, Department of Business Administration,
East West University, Dhaka, Bangladesh
Abstract
Purpose – The purpose of this paper is to investigate the corporate social responsibility (CSR)
reporting information of Bangladeshi listed commercial banks and explores the potential effects of
corporate governance (CG) elements on CSR disclosures.
Design/methodology/approach – The annual reports of all private commercial banks (PCB) for
the year 2007-2008 are examined to analyse the banks’ CSR reporting practice using content analysis.
It also considers three elements of CG such as non-executive directors, existence of foreign
nationalities and women representation in the board. The multiple regressions were used to measure
the impact of CG elements on banks’ CSR reporting initiatives.
Findings – The results of the study demonstrate that though voluntary, overall CSR reporting by
Bangladeshi PCB are rather moderate, however, the varieties of CSR items are really impressive. The
results also displayed no significant relationship between the women representation in the board and
CSR reporting. Conversely, non-executive directors and existence of foreign nationalities have been
found the significant impact on the CSR reporting.
Research limitations/implications – The main limitations of the paper are that it considers PCB
from only one country and uses annual reports disclosures from a single year. The results of the
study can be used by researchers to analyse the benefits of including the non-executive directors and
foreign nationals on different types of CSR initiatives and standard setters to set the suitable CSR
policy guidelines with a view to reinforce such initiatives.
Originality/value – This unique paper divulges the CSR related disclosure with possible impact of
CG in the specific context of a transitional economy’s banks such as Bangladesh. The paper
contributes to the CSR literature as it presents empirical evidence of the influences of CG structure on
the practices of CSR activities in developing countries’ banking sector setting.
Keywords Financial reporting, Corporate governance, Commercial banks, Bangladesh,
Corporate social responsibility, Disclosure
Paper type Research paper

International Journal of Law and
Management
Vol. 52 No. 2, 2010
pp. 82-109
# Emerald Group Publishing Limited
1754-243X
DOI 10.1108/17542431011029406
Introduction
To undertake social responsibilities and to report such activities at a regular interval
have been recognised an essential device for organizations towards ensuring the long-
term continued existence. Corporate social responsibility (CSR) reporting has been
receiving a considerable attention to researchers and practitioners for more than two
decades (for a detailed review on the development of CSR reporting, see Mathews,
1997). Price Water House Cooper’s international survey in early 2002 found that nearly
70 per cent of the global chief executives believed that addressing CSR was vital to
their companies’ profitability (Simms, 2002). A review of related literature suggests
that CSR reporting issues have become a necessary facet of businesses to substantiate Effect of CG
companies’ commitment to the society. A number of earlier researches analysing CSR elements on
information have directed towards many fundamental issues. For example, research
endeavours attempted on investigating the types of information, extent of social CSR reporting
disclosures firms report (see Andrew et al., 1989; Guthrie and Parker, 1990; Harte and
Owen, 1991; Adams et al., 1995; Deegan and Gordon, 1996; Newson and Deegan, 2002
for a review) establishing any connection between companies CSR initiatives and 83
attributes of economic performance or factors such as size, industry membership, risk,
market reaction, external influences, firm reputation, country of origin or proximity to
individual consumers (e.g. Roberts, 1992; Herremans et al., 1993; Tilt, 1994; Newson
and Deegan, 2002) have been increasing across time. Moreover, other research efforts
(e.g. Guthrie and Parker, 1989; Patten, 1992; Roberts, 1992; Donaldson and Preston,
1995; Deegan and Gordon, 1996; Deegan and Rankin, 1997; Adams et al., 1998; Neu
et al., 1998; Deegan, 2000) evidenced the motivations of corporate managers to CSR
activities. Nevertheless, most of the earlier international researches were dealt with
company-specific attributes and proxies. Few studies considered attributes of
corporate governance (CG) that might tend to positive CSR activities. International
CSR research is further being limited in that the majority of studies focus on non-
financial sector in developed nations. Very few studies (e.g. Barako and Alistair, 2008)
focused on banking sector of developing countries and no such study was carried out
in the specific context of commercial banks in Bangladesh.
The objectives of this paper are twofold. First, to investigate CSR reporting
information of private commercial banks (PCB) of Bangladesh with a view to observe
the levels and varieties of CSR information on annual reports. Second, to examine the
variability of CSR reporting information for CG elements. The country Bangladesh and
the PCB are interesting and ideal to study for a number of motivational reasons. First,
because not many research studies on CSR reporting issues in banking institutions
(Hossain et al., 1994; Khalid, 2005; Leung and Horwitz, 2004) are evidenced in both
developed and developing countries setting due to the existence of strict regulatory
requirements, this study will fill up research dearthness by addressing the CSR
reporting practice in the specific context of a developing country’s banking sector.
Second, investigating CSR reporting practices in annual reports of Bangladeshi
banking sector over a given time period and making out governance construction as
potential explanatory factors tends to create an understandable contribution to the
literature. The findings of the study might be inclined to construct few inferences for
other developing countries where the respective standard setters take particular
attention in designing CSR-led business strategies for banks. Third, empirical research
studies investigating environmental information within CSR reporting domain have
gained little attention to the financial institutions viewing that this sector has an
insignificant straight environmental shock. However, many research studies (see e.g.
Simpson and Kohers, 2002; Jeucken and Bouma, 1999; Coulson and Monks, 1999)
addressed both internal and external issues for evaluating likely environmental impact
for banks. By concentrating on banking industry, this study takes the opportunities to
see banks’ extended focus on social and environmental responsibility and reporting
practices. Fourthly, Khan et al. (2009) in a recent research revealed that PCB in
Bangladesh initiated a number of excellent programs on CSR issues. Finally, civil
societies in Bangladesh motivate CSR issues for all sectors in the recent years by
spawning greater societal demands and expectations of business responsibility in the
IJLMA form of organising different seminars, press release or with other initiatives (Rahaman
and Jabed, 2003).
52,2 The remainder of this paper is structured as follows. The next section documents
the CG and CSR reporting environment in banking sector of Bangladesh followed by
a short review of the literature on organisational legitimacy theory (LT) to validate CSR
activities and reporting practice for the firms. A short review of CSR reporting with CG
has afterward addressed. The paper then out lines the development of hypotheses.
84 Next, the details of the research method used in the study are discussed. In the final
section, it reviews the finding of the study together with the implications, limitations
and the further scope of study.

CSR reporting and CG in Bangladesh: an overview

While CSR reporting has traditionally been observed as the developed countries event
(Belal, 2000), in recent years it has also been received significant interest in both CSR
and CG writing in developing countries context. In Bangladesh, five enterprises
namely the Securities and Exchange Commission (SEC), Bangladesh Bank (BB), the
Institute of Chartered Accountants of Bangladesh (ICAB), the Bangladesh Enterprise
Institute (BEI), the Institute of Cost and Management Accountants of Bangladesh
(ICMAB) are the pioneer bodies working for ensuring CG regulations (Ahmed, 2006). A
range of activities in relation to governance are executed by these institutions
including publication of code of CG for Bangladesh, different reports, organization of
seminars, issuance of notification, enforce various regulations and standards, such as
the Bangladesh Accounting Standards (BAS) and Bangladesh Auditing Standards
(BSA), the Companies Act 1994, the SEC rules and others stock exchange listing
requirements (Mir and Rahaman, 2005). Earlier, accounting reports were mainly
drafted and audited along the lines of regulations set out in two sets of regulations: the
Companies Act 1913 and the stock exchange listing requirements which was later
being changed in 1993. Being advised and funded by the donor agencies, the SEC was
established as an autonomous body in order to strengthen the capital market.
Subsequently, the Companies Act 1913 was replaced by a new Act in 1994. The listed
companies must comply with the listing requirements of SEC to operate in the stock
exchanges in addition to the requirements of the Companies Act 1994. Imam (2006)
mentioned that the SEC has promulgated different orders and notifications time to time
to ensure good CG practice in the listed public limited companies. SEC strives to
stimulate the listed companies to comply the CG guidelines so that suppliers of funds
can ensure a fair return on their investment. Researchers (e.g. Amin and Tareq, 2006;
Jensen and Meckling, 1976; Chaudhury, 2004) illustrated that banking companies entail
unique CG attention because they differ greatly from other types of firms in terms of a
broader extent of claimants on the banks’ assets and funds. Numerous studies (e.g.
Ahmed, 2006; Shliefer and Vishny, 1997; Imam, 2006) explained that the general
approach to CG argues in support of the shareholders’ rights only. This is because
managers or executives may not always work in the best interest of the shareholders.
However, from banks’ perspectives, the shareholders actually provide a very
insignificant part of the bank’s assets and funds. Rather, majority of its investments are
financed by the depositors’ funds. As a result, the risks of losing depositors’ savings
demand stern priority in protection of depositors. This necessitates the broader view of
CG that advocates the interest and benefits of the suppliers of funds for a firm must
be maintained in a consistent manner. Similarly, researchers (Afroze and Jahan,
2005; Bhuiyan and Biswas, 2007; Arun and Turner, 2003) supported the need for the
broader approach to CG and the inevitability of government intervention for Effect of CG
banking institutions of Bangladesh to bring the behaviour of bank management under
control.
elements on
In Bangladesh economy, banking institutions play the fundamental role and CSR reporting
dominant financier for the industrial and commercial activities. Since independence in
1971 until 1982, when the ‘‘ownership reform’’ measures started in the financial sector,
the government had carried out the regulation and ownership of all financial
institutions. During the reform period, two out of six National Commercials Banks
85
(NCBs) were denationalised and PCB were allowed to operate in the country. In 2006,
out of the 49 banks operating in Bangladesh, ten belong to the public sector, 30 are local
PCB and ten are foreign-owned banks (Bangladesh Bank, 2007). As with the line of
global practice, the central bank of Bangladesh, BB, has been entrusted with the
responsibility of playing custodian role of banking sectors in Bangladesh. BB regulates
banking companies in accordance with Banking Companies Act, 1991, and its further
amendments. At the same time, banking organisations listed in the capital market
abide by the rules of the SEC for trading the stock exchanges and thus to operate, they
fulfill the listing requirements in addition to the requirements of the Banking
Companies Act, 1991. For companies, adoption of the SEC’s guidelines is voluntary for
few items in addition to other mandatory disclosure requirements. Corporate financial
reporting in Bangladesh is mandatory[1] and focused on the traditional accounting
based profit margin or percentage based result to the fund provider rather than
company’s contribution to the society, to the people and to the country as a whole.
Uddin et al. (1999) narrated that reporting corporate social responsibilities are
emphasised in the developed and developing countries but reporting of CSR activities
are not found enormous. The major problem concerns selecting events to be reported.
Chowdhury and Chowdhury (1996) noted that although many international standards
were available to help firms implementing CSR, there are no disclosure requirements
for social reporting under the different Acts and rules in Bangladesh. On the other
hand, reporting CSR information by Bangladeshi banking sectors is documented at a
lesser extent although there are no mandatory legislative requirements. A study
conducted by Khan et al. (2009) on selected banking companies revealed some notable
initiatives taken by different banking firms in Bangladesh such as establishment of
foundation for CSR practices although overall reporting practices are rather
insufficient. However, this may be due to lack of structured reporting guidelines.
Recently, BB encourages commercial banks to take part CSR activities enthusiastically,
which might pave the banking sectors way to become more structured on the ideas of
CSR issues. BB also advised banking and other financial institutions to move towards
implementation of CSR programme. Reporting of the CSR initiatives can begin in a
modest way as supplements to usual annual financial reports, eventually to develop
into full blown comprehensive reports in the Global Reporting Initiative (GRI) format
(The Financial Express, 2008, p. 4). The report also described that CSR activity of firms
would be perceived as an additional indicator of management efficiency. Moreover, the
Government of Bangladesh has approved the long-awaited proposal for tax exemption
facility for firms at the rate of 10 per cent on a part of the corporate income to be spent
for CSR activities. In this regard, news published in daily news paper (The Daily Star,
2008, p. 6) stated that the exemption facility is aimed at encouraging private companies
to be involved more in CSR practices. In relation to the tax exemption plan, economic,
environmental and social development activities have been brought within CSR
purview.
IJLMA Theatrical framework: LT and banks’ CSR activities
LT has been considered as widely accepted theory to clarify social reporting practices
52,2 of a firm (Milne and Patten, 2002; Adams et al., 1998; Deegan and Gordon, 1996;
Guthrie and Parker, 1989; Moerman and Van Der Laan, 2005; O’Donovan, 2002;
O’Dwyer, 2002; Patten, 1992; Wilmhurst and Frost, 2000; Murthy and Abeysekera,
2008). LT accentuates that corporate management will react to community
expectations and human resource management (Deegan, et al., 2002; Patten, 1992;
86 Campbell, 2000; Deegan et al., 2002). Although the banking and other financial
institutions do not construct detrimental products nor do they exercise processes
unsafe to the society, seeking organisational legitimacy is deemed imperative in
demonstrating social worthiness (Oliver, 1991) social conscience and enlightened self-
interest (O’Dwyer, 2002) above all, exhibiting that organisations are in harmony with
community concerns (Clarke and Gibson, 1999). As a result, Bangladeshi people might
expect the banking sectors to report information on their constructive social activities
such as managing the domestic social problems that are rampant in the country. In
view of that, banking sectors’ management may legitimise their existence by reporting
on banks’ positive actions to restrain poverty, eradicate illiteracy and unemployment,
contribution to educational sector and to the community as a whole. Lindblom (1993)
described that organisational legitimacy is a concept that can be used to gain insight
into the motivation a firm has for providing CSR information voluntarily. Guthrie and
Parker (1989) narrated that legitimacy is one of the factors that motivate the
management to adopt and report social practices. Grounded in LT, Branco and
Rodrigues (2008) mentioned a positive association between public visibility and
CSR reporting information. As a matter of fact, LT is in particular helpful as a
rationalization of any type of disclosure when there are good reasons for assuming that
the type of disclosure being analyzed is attempting to address a particular legitimacy
gap and that the disclosure program is intended to close that gap. For example,
companies change their CSR reporting practices after particular incidents such as an
environmental disaster (an oil spill or gas explosion) that puts the companies in the
spotlight (see, for example, Patten, 1992; Deegan et al., 2000; Walden and Schwartz,
1997). On the other hand, a variety of research (e.g. Deegan et al., 2000; Deegan, 2002;
Barako and Alistair, 2008) addressed that legitimacy can be vulnerable even when
companies activities are in agreement with society’s expectations. This may be for the
reason that the company has failed to correspond that its activities are in congruent
with social values. Buhr (1998) opined that companies can attempt to achieve
legitimacy by appearing to do the ‘‘right things’’ or not be involved in doing the ‘‘wrong
things’’ when this appearance may have little in common with a company’s actual
performance. According to Branco and Rodrigues (2008), LT suggested CSR reporting
as an important way of communicating with stakeholders. They added that LT
convinces stakeholders that the company fulfills their expectations (even when actual
corporate behaviour remains at variance with some of these expectations).
In banking context, depositors and borrowers are the major stakeholders of
banks which represent extremely large and diverse stakeholder groups. As a result,
in addition to shareholders and managers, depositors and regulators have a straight
stake in bank performance. These stakeholders enjoy all three of Mitchell et al. (1997)
stakeholder attributes: power, legitimacy and urgency (Yamak and Süer, 2005;
Griffiths, 2007). Griffiths (2007) argues that borrowers have a legitimate claim on banks
by entering in lending agreements, acquire power and urgency through their cause
being adopted by other stakeholders such as regulators and consumer organisations.
These considerations guide researcher to sense that banking is both a high-street Effect of CG
presence and a high public visibility sector. The escalating customer consciousness all
over the world and in some other developing nations together with Bangladesh have
elements on
been seen as a powerful driver of corporate performance, which tends to promote CSR reporting
different sectors positively towards the country’s corporate social activities (Patten,
1992; Sharma and Talwar, 2005; Belal and Owen, 2007; Khan et al., 2009). There has
been an increasing trend of CSR activities by banks in both developed and developing
countries. This may be basically due to the sectors’ vital role in economic development
87
and sustainability or perhaps the realising the legitimacy. A CSR research by Douglas
et al. (2004) on Irish banks stated that Irish banks are well behind the leading European
banks with regard to the quality and quantity of social disclosures. Tsang (1998) in his
CSR reporting study on banking, food & beverage and hotel industries in Singapore
revealed the few CSR disclosures. Halabi et al. (2006) analysed CSR information in
annual reports of top Australian banks. They found that four banking companies are
in Australia’s top ten implement GRI and all banks make disclosures in relation to the
environment, labour practices and human rights. In his study on the banking sector in
Greece, Nikolaou (2007) suggested that this sort of information is disclosed through an
ad hoc environmental accounting method. The recent study conducted by Branco and
Rodrigues (2008) on the banks in Kenya revealed that Kenyan’s banks involve CSR
activities although the level of CSR reporting was low. Another recent study by Branco
and Rodrigues (2008) on Portuguese banks found that community relations disclosure
is an important part of the social reporting disclosures items. For the purposes of the
current study, the essential aspect is that legitimacy calls for a reputation that must be
maintained by the banks, which necessitates a bank to think and convey to the
appropriate users groups that their actions are harmonious with their values.
Demonstration of positive social image towards the general public by involving
activities leading to social welfare is more on the point of gaining higher public
acceptance by the banks. Given that CSR reporting is attempted to underline how the
company relates to society in the course of its different social activities, it should be
maintained in an accelerating manner which might carry an opening to generate more
incentives (financial as well as non-financial) for such involvement. Research studies
documented that companies with high public profiles are more eager to present a
positive social image through community involvement activities than those of less well
known to justify that such activities are taken for greater public interest and to validate
their continuation to society. From the perspective of CG, Macey and O’Hara (2001)
argue that a broader view of CG should be adopted for banking institutions. They
opined that CG mechanisms for banks should encapsulate depositors as well as share
holders due to the existence of peculiar contractual form of banking. Therefore banks
are believed to put superior significance to community involvement and CSR reporting
as part of their CSR practices.

CSR disclosure and CG

Nowadays consciousness for CG has not only been increased but the concept has
greatly been widened. For example, it has started to envelop some areas customarily
perceived as being part of CSR. Following after accounting and ethical scandals in
firms such as Enron, WorldCom, Ahold and Parmalat, firms tended to attempts
strengthening CG mechanisms regarding boards and its compositions, managers and
auditors, control and risk, as well as the ethical aspects related to remuneration,
managerial and employee behaviour including whistleblower and complaint
IJLMA provisions for the organisations. In view of the fact that bank and other financial
52,2 institutions generally experience higher stresses to be transparent and disclose
information about major strategic decisions to stakeholders it has demanded increased
requirements for other types of information above and beyond economic information.
In a preface to a report by the Global Corporate Governance Forum, Claessens states
that ‘‘in its broadest sense, CG is concerned with holding the balance between economic
88 and social goals and between individual and communal goals’’ (Claessens, 2003, p. 7).
Maier (2005) suggested a broader definition of CG scope ‘‘Corporate governance defines
a set of relationships between a company’s management, its board, its shareholders
and its stakeholders. It is the process by which directors and auditors manage
their responsibilities towards shareholders and wider company stakeholders. For
shareholders it can provide increased confidence of an equitable return on their
investment. For company stakeholders it can provide an assurance that the company
manages its impact on society and the environment in a responsible manner’’ ( p. 5).
While the message mentioned by Maier is very coherent, one could expect such an
approach from representatives of the fair investment community. Given that
stakeholder interests are accounted for, it has been suggested that firms are to be bear
in mind their degree of dependence on a stakeholder for resources (McLaren, 2004). The
literature revealed that CG has a considerable impact on CSR issues within the
organizations such as employee conditions (Deakin and Whittaker, 2007) and ethical
aspects related to remuneration, managerial and employee behaviour (Ryan, 2005;
Wieland, 2005). Research studies (Dahya et al., 1996; Carter et al., 2003; Branco and
Rodrigues, 2008) also documented the likely impact of CG elements on firms’ CSR
disclosure initiatives the detailed of which are addressed in the next section.

Review of literature and hypotheses development

CG is concerned with holding the balance between economic and social goals and
between individual and communal goals. The governance framework therefore
encourages the equal and efficient use of resources to require accountability for the
stewardship of those resources with an aim of aligning as nearly as possible the
interests of individuals, corporations and society. Dahya et al. (1996) defined CGs as
‘‘the manner in which companies are controlled and in which those responsible for the
direction of companies are accountable to the stakeholders of these companies’’ ( p. 74).
In the wake of accounting, leadership and governance scandals at large companies, CG
has succeeded to attract a great deal of interest. This is because it focuses not only the
long term relationship, which has to deal with checks and balances, incentives for
managers and communications between management and investors but also the
transactional relationship, which involves dealing with disclosure and authority.
Tricker (1984) illustrated that the CSR reporting endeavour can be viewed as a strategy
heading towards closing a perceived legitimacy gap between management and
shareholders (especially foreign shareholders) via non-executive directors. Non-
executive directors are seen as the check and balance mechanism, not only in ensuring
that companies act in the best interests of owners, but also other stakeholders; advising
on the public presentation of the company’s activities and performance; and providing
additional windows on the world. Furthermore, Zahra and Stanton (1988) pointed out
that they are likely to respond to concerns about honour and obligations and would
generally be more interested in satisfying the social responsibilities of the firm because
this might improve their social prestige and honour. Fama and Jensen (1983) explained
that non-executive directors are regarded as a dependable method equipped of Effect of CG
disseminating agency conflicts between managers and owners.
In view of the ideas derived from the above-mentioned discussion, the standing at
elements on
this point is that non-executive directors have an essential role to play on banking CSR reporting
companies to take on CSR activities with a view to ensure similarity between
organisational actions and societal values or firms’ legitimacy. Therefore, boards
represented by non-executive directors are believed to have more pressure on CSR
reporting as they are thought of symbolising the benefits of other stakeholders. Thus 89
the first hypothesis of this study is:
H1. The provision of higher proportion of non-executive directors on the board,
the greater is degree of CSR reporting information for banks.
It has been evidenced in the CG literature that board diversity has turned into a
significant element of CG arrangement in recent years. Branco and Rodrigues (2008)
mentioned the theme of board diversity correctly match into the structure of
stakeholder theory. Prior research indicated that board diversity is associated with
stronger orientation towards corporate social reporting and higher intensity of social
performance (for review, see Ibrahim and Angelidis, 1994; Sicilian, 1996). Carter et al.
(2003) argue supporting board diversity that ‘‘[it] increases board independence for the
reason that with a unlike gender, ethnicity, or cultural background might ask questions
that would not appear from directors with more traditional backgrounds’’ ( p. 37).
Carter et al. (2003) revealed empirical evidence of a significant positive relationship
between board diversity, defined as percentage of women, African American, Asians
and Hispanics on board of directors and firm value. Huse and Solberg (2006) illustrated
that women could involve to boards through forming alliance, preparing and involving
themselves in board matters, taking part of vital decision making. Adams and Ferreira
(2004, p. 3) suggest that boards with a higher proportion of women directors tend to
make the more board meetings possible and special attendance patterns at board
meetings, which make different boards more successful than homogenous boards.
They also argued that women are inherently more ‘‘stabilising’’ than men. Therefore,
based on the above-mentioned discussion, the second hypothesis of this study is:
H2. The provision of higher proportion of women directors on the board, the
greater is degree of CSR reporting information for banks.
The ownership structure of the firm may lead to legitimacy gaps. Branco and
Rodrigues (2008) explained the involvement between the proportions of foreign
nationals and reporting might lead to raise the issue of causality. Fields and Keys
(2003) found that heterogeneity of experiences, ideas and innovations that individuals
carry to a company tends to impact on company performance. Erhardt et al. (2003)
argue that ethnic representation on boards raises financial performance of business. At
the same time, Ayuso and Argandona (2007) illustrated that foreign directors are
typically assumed to play a key role in supporting CSR reporting strategies. Haniffa
and Cooke (2005) revealed empirical evidence of positive association between
proportion of Malay directors on the board and the extent of voluntary disclosure by
Malaysian companies. However, a study by Branco and Rodrigues (2008) on Kenyan
banks found no association between the ratio of foreign directors on the board and CSR
reporting initiatives, the result consistent with study. In Bangladeshi banking sector,
board diversity has become an important component of CG structure in the recent
years as foreign representation on boards has now been practised (Haque et al., 2007).
IJLMA Thus based on the above discussed literature, this paper assumes that that board
diversity measured as percentage of foreign national, (non-Bangladeshi nationalities),
52,2 on the board of directors may have power on banks CSR reporting. Hence, the
following hypothesis is examined:
H3. The provision of higher proportion of foreign nationals on the board, the
greater is degree of CSR reporting information for banks.
90
Control variables (firm-specific characteristics i.e. size, profitability
and gearing)
The study considers size, profitability and gearing as the control variables. Previous
studies have indicated a positive relationship between the extent of CSR reporting and
company size, profitability and gearing. One rationalisation for the relationship of large
firms with CSR reporting is that large firms assume more activities and have greater
impact on society (Trotman and Bradley, 1981; Andrew et al., 1989). Besides, various
groups in society scrutinise larger companies therefore they would be under greater
pressure to report their social activities to legitimise their business (Cowen et al., 1987).
The relationship between profitability and CSR reporting is also conclusive (see
Mangos and Lewis, 1995; Patten, 1991; Roberts, 1992). A likely clarification for this
association is that management enjoys more autonomy and flexibility to initiate and
report wide-ranging CSR initiatives to shareholders. Haniffa and Cooke (2005) opined
that profitable firms reveal social information to show their role to society’s well being
with an aim of validating their existence. Moreover, Gearing has been found to be an
important explanatory variable in the earlier studies (e.g. Belkaoui and Kahl 1978;
Malone et al., 1993; Wallace et al., 1994). Highly geared companies disclose more
information to give surety to the creditors that shareholders and management are less
likely to evade their covenant claims (Myers, 1977; Schipper, 1981) and to meet some of
the needs of lenders (Cooke, 1996). Thus, based on above-mentioned discussion, the
hypotheses are:
H4. The extent of CSR reporting is greater for: larger firms; highly profitable
firms; and firms having highly gearing ratio.

Research design
The data collected for the purpose of the study involves the examination of annual
reports for the year 2007-2008 of PCB listed on the Dhaka Stock Exchange (DSE). The
banking companies considered in the research include all PCB[2]. The listed banks
were studied owing to their investor orientation and legislative obligations. The annual
reports of selected banks were examined after downloaded from the respective banks’
official web sites. The official web addresses of all firms were collected from the
‘‘companies profile section’’ maintained by DSE. However, incomplete annual reports of
seven banks were available (only financial information) at the web. A letter was then
sent to head office addressing to the company secretary requesting for a complete
annual reports. Two weeks after sending the mail, a reply was received from the banks
concerned. As a result, annual reports of the entire population of 30 PCBs were
examined in the study. While firms may exercise other medium of communication for
exhibiting CSR reporting such as internet, newspaper, media, this study concentrates
on published annual reports. The selection of annual reports is consistent with other
prior studies (see, for example, Adams et al., 1995, 1998; Gray et al., 1995a, b; Guthrie
and Parker, 1990; Roberts, 1990; Singh and Ahuja, 1983). A further reason for choosing
annual reports is that annual report is the most widespread and accepted document Effect of CG
produced regularly by the companies in Bangladesh. Belal (1999, 2000) and Khan et al. elements on
(2009) illustrated that annual reports are considered as the major means through which
information about the company is communicated. Furthermore, researcher’s early CSR reporting
examination in this regards exposed that sample banks did not publicise any separate
social reports and their CSR is restricted to the annual reports only. The intention for
deciding on all the PCB was made on the argument that these banks are expected to 91
reveal more social disclosures than others. Moreover, these banks represent around
60 per cent of the total assets base and deposit of entire the banking sectors in
Bangladesh. As a result, the sample population considered for the study has a
significant illustration of firms representing the banking sectors listed on the DSE.

Measurement of variables
Dependent variable – CSR reporting
For the purpose of collecting and codifying the data, content analysis technique, a
method of codifying the text (or content) of a piece of writing into various groups (or
categories) based on chosen criteria (Weber, 1988) was used. Content analysis is an
established method of studying annual reports and has widely been used which is
seemed to be empirically valid in the corporate social, ethical and environmental
reporting fields of accounting research (see Gray et al., 1995a, b, 2002; Guthrie and
Parker, 1990; Holsti, 1969 for a review). An important element of content analysis is the
collection and development of categories into which content units can be classified (Ali
et al., 2008). The categories and items were taken out from earlier research in the area
(e.g. Ernst and Ernst, 1976; Cowen et al., 1987; Guthrie and Parker, 1989, 1990; Gray
et al., 1995a, b) and applicability to the Bangladeshi business environment (Ali et al.,
2008; Khan et al., 2009). For the study, a research instrument encompassing the seven
broad premises of CSR reporting (e.g. contribution to health sector, contribution to
education sector, activities for natural disaster, other donations, and activities for
employees, environmental issues, and product, services, statements) was developed.
Effort was also made to ensure that the checklist guaranteed each of the items was
unambiguous and mutually exclusive of others. The checklist was then validated in a
pilot-study, which was deemed valuable. This is because pilot survey resulted in
improvements of checklist and ensured that items were unique or important to the
context of Bangladesh banking sector were added and those not relevant omitted.
Moreover, it ensured that items peculiar to a particular industry were taken into
account. The final checklist instrument consisted of 60 CSR reporting items. This
study considers ‘‘frequency’’ and ‘‘words count’’ as the unit of communication due to its
(Zeghal and Ahmed, 1990; Deegan and Rankin, 1996; Deegan and Gordon, 1996) more
practicability and categorisation ease. Although prior research studies employed
different unit of analysis such as number of pages (Patten, 1992; Deegan and Rankin,
1996) or proportion of pages (Guthrie and Parker, 1990; Gray et al., 1995a, b) in using
content analysis, word counts are seems to be quite relevant in Bangladesh contexts,
since CSR and its reporting endeavours are the new phenomenon. The frequency was
decided by the number of times a particular CSR reporting item was narrated either
qualitatively or quantitatively. The frequency provides the intensity (quantity) of a
given CSR reporting item while the words count indicates the space allocated for a
given CSR reporting item (volume). In order to ensure reliability in coding, the
researcher and a research assistant were involved in the coding process.
IJLMA CSR reporting index (CSRRI)
Basically, an item in the research instrument was coded ‘‘1’’ if disclosed and ‘‘0’’ if it is
52,2 not although no retribution is applied if the item is considered irrelevant. In other
words, the study captured that if a company discloses an item of CSR reporting (e.g.
donation for flood victims information) in the annual reports, it awarded ‘‘1’’ and
otherwise ‘‘0’’. The score of each items were then added to get the ultimate score for the
company. The disclosure model for the CSR reporting thus measures the total
92 disclosure (TD) score for a company as additive as follows:

CSRRI ¼ di60=nj

where, di is the 1, if the item di is disclosed and 0 if the item di is not disclosed, nj is the
maximum number of items for jth firms nj  60.
To get a company’s score, the scores for each item is added and the total is divided by
the maximum likely scores, that are multiplied by 100 to gather the percentage scores. In
this study, 60 items represent the maximum possible disclosure score as the numbers of
disclosure items combing all broad themes form a total of 60. Thus, for example, if a
bank reports no item (0) out of 60 items, the dependent variable score will be 0 per cent.
Likewise, if half of the total items are reported, then the score for dependent variable
patronise 50 per cent. The average score is calculated by dividing the number of banks
disclosing a particular item by the total number of items. The number of words in every
sentence relating to each CSR item included in the checklist is tallied in the study using
similar mechanism. However, items relating to graphical presentation in the checklist
were ignored in this respect. The number of words related to each item under the seven
themes was added together to compute the CSR reporting (length).

Independent variables
The construction of independent variables with control variables and their
measurement technique are elaborated in Table I.

Results and discussion

This study considers 60 CSR reporting items; the detailed results of those items are
shown in Table II. The results indicate that although CSR reporting is voluntary in
Bangladesh, the PCBs involvement in CSR activities are not as low as anticipated in
relation to the total list of items and the magnitude of CSR activities performed by
banks are truly stimulating. While the encouragements to take on CSR activities to the
banking sector are the new events in Bangladesh, the finding of the study reveals that

Independent variables Measurement

Composition of non-executive Percentage of non-executive directors to total

Directors (COMPNED) Directors on the board
Composition of women Percentage of women directors to total
Directors (COMPWD) Directors on the board
Ownership by foreign Percentage of non-Bangladeshi directors to total
Shareholders (FOROWN) Directors on the board
Table I. Size (STA) Size based on total assets ¼ fixed asset þ current assets
Constructs of the Profitability (ROE) Return on equity ¼ net profit after tax/total equity
independent variables Gearing (DTE) Debt to equity ratio ¼ total long-term debt/total equity
 Number of Effect of CG
banks reported Percentage Frequency elements on
Sl no. this item (%) (f)
CSR reporting
A: Contribution to Health sector
1 Medical support for AIDS patients 2 6.67 4
2 HIV/AIDS assistance programme 5 16.67 15
3 Health assistance to underprivileged and 93
disable children 25 83.33 45
4 Support to acid and dowry victims 10 33.33 19
5 Donation to Smile Brighter Program (cleft-lips
and/or palate surgery for boys and girls) 1 3.33 2
6 Organising plastic surgery operation 4 13.34 7
7 Donation of costly medical equipments in
different medical hospitals 10 33.33 10
8 Donation of cash money for setting up cancer
hospital 10 33.33 30
9 Donation of cash money for operation theater
for kidney hospital 7 23.33 25
10 Donation to rotary club to purchase equipment
to help the disadvantaged children with
hearing impairment 5 16.67 7
11 Donation of cash money to women and child
hospitals to bear their operational cost 5 16.67 14
12 Donation to different eyes hospital 12 40.00 30
13 Financial support for performing
opthtamological operation of all born
blind children 1 3.33 3
14 B: Contribution to education sector
15 Donation to the universities for constructing
research center 1 3.33 2
16 Scholarships to the research students of
different universities 5 16.67 15
17 Scholarship to meritorious and poor students 7 23.33 23
18 Granted fund for blind education and
rehabilitation 3 10 10
19 Scholarships for physical disable students 5 16.67 17
20 Donation of books to different colleges and
universities 10 33.33 28
21 Organising different local and international
students competitions 7 23.33 24
22 Donation for the students whose are suffered
from different death catching diseases 7 23.33 20
23 Internship facility for universities students
with cash allowance 10 33.33 20
24 Part time job facilities for the students 0 0 0
C: Activities for natural disaster
25 Donation for the flood and tornado affected
people 30 100 150
26 Donation for the landslides victims people 5 16.67 12
27 Donation for rehabilitations of homeless
people due to river erosions 3 10.00 8
28 Distribution of worm cloths among the
cold-affected people 27 90.00 88 Table II.
(continued) Extent of CSR reporting
IJLMA Number of
52,2 banks reported Percentage Frequency
Sl no. this item (%) (f)

29 Donation to Prime Minister relief fund for

flood victims people 27 90.00 105

94 D: Other donations
30 Establishment of health care center for rural
people for free medical services 3 10.00 23
31 Donation to the families victim of road
accidents 1 3.33 5
32 Donation to hospitals for purchasing
equipments for reducing sufferings of poor
Thalassemia patients 5 16.67 14
33 Donation for improvement of Street
children’s condition 1 3.33 2
34 Financial support to the natural affected
victims of neighbouring countries 1 3.33 1
35 Sponsoring to different national and
international games and events 10 33.33 24
36 Donation to different sports organisations 10 33.33 27
37 Assistance to different Trusts who works
for destitute people of the society 7 23.33 20
E: Activities for employees
38 Vaccinations programme of employees 5 16.67 17
39 Employees trainings cost 25 83.33 88
40 Number of employees 30 100 40
41 Career development 24 80 40
42 Employee benefits 30 100 45
43 Compensation plan for employees 15 50 30
44 Facilities to employee’s children 5 16.67 14
45 Number of employees trained 25 83.33 70
46 Amount of budget allocation on employees
training 15 50.00 30
47 Employees categories by function 3 10.00 7
48 Cost of employees safety measures 5 16.67 16
49 Information about support for day-care,
maternity and paternity leave 0 0 0
F: Environmental issues
50 Awards for environmental Protection 2 6.67 7
51 Planting of trees to make the country green 3 10.00 9
52 Support for public/private actions designed
to protect the environment (e.g. CNG station
establishment) 3 10.00 7
53 Past and current operating costs of 0 0 0
environmental friendly equipment and facilities
54 Promoting environmental awareness to the
community through promotional tools 2 6.67 4
G: Product/services/statements
55 Explanation of major kinds of product/services 27 90.00 125
56 Improvement of product/service quality 27 90.00 115

Table II. (continued)

 Number of Effect of CG
banks reported Percentage Frequency elements on
Sl no. this item (%) (f)
CSR reporting
57 Improvement of customer service 24 80.00
58 Receipt of awards (local or international) for
CSR activities 5 16.67 20
59 Value added statement 30 100 110 95
60 Providing information for conducting safety
research on the company’s products 0 0 0

Total 34.06 Table II.

at least few firms carry on the CSR activities at a greater extent contributing in the
different sectors. All the firms (100 per cent) reported CSR information on such items as
employee benefits, number of employees’ employed, donation for the flood and tornado
affected people and reporting value added statement. In view of that, it turns into
perceptible that PCBs of Bangladesh stand beside the flood affected people in
accordance with their financial ability (to view other forms of banks’ assistance
towards the flood victims, see Sl no. 28 and 29) for fulfilling their commitment to the
society. Likewise, one bank has (Sl no. 34) reported to provide financial support to the
natural affected victims of neighbouring country (tsunami affected people in Srilanka).
This is, indeed a very exciting reported event and the continuance of such sort of
endeavour would clearly bring image both at the local and international level for the
bank and for the country taken together. Although few CSR items (see Table III) are not
reported by any banks, the banks CSR involvement towards different sector such as
education, health and others are very inspiring. As it is seen from the Table II, 25 banks
(83.33 per cent) took part in health assistance to underprivileged and disabled children,
more than one-third banks make the contribution to the eye hospitals and ten banks
were (33.33 per cent) involved to donate the costly medical equipments in different
medical hospitals and contributed cash money for setting up cancer hospitals. Towards
the banks contribution to the education sector, the findings of the study reveal that,
surveyed banks (23.33 per cent) gave scholarships to the meritorious students, ten
banks (33.33 per cent) gifted books to different colleges and universities libraries and
same number of banks reported to offer internship facilities for universities students
with cash allowance. Banks propensity towards creating a first-rated research
environment in the country and the new researcher is also visible. Five banks (16.67 per
cent) reported that they gave scholarships to the research students and one bank (3.33
per cent) disclosed their contribution to a university for setting up research centre.
Although this phenomenon seems rather isolated in compare to total surveyed banks,
the in-depth investigation in this regards discloses that reported bank contributed the

Past and current expenditure for pollution control equipment and facilities. Table III.
Information about support for day-care, maternity and paternity leave CSR reporting items
Providing information for conducting safety research on the company’s products not disclosed by any
Discussion of accidental statistics sample banks
IJLMA massive amount of funds. However, one interesting item that deserves particular
52,2 attention that, not a single bank offers part time job facilities for the students (SL #24).
This may be owing to the corporate culture or banks rigid thought intended for hiring
more qualified personnel. The finding is parallel to the study conducted by Rashid
(2005) who revealed corporate cultures of Bangladeshi organisations bring less
opening for the colleges or universities students to make a good bridge of their
96 theoretical and practical learning due to the restricted access while studying in tertiary
levels. Consistent with the earlier research investigations in Bangladesh context (e.g.
Imam, 2000; Belal, 2001; Khan et al., 2009; Ali et al., 2008), this study has unveiled again
the extended reporting tendency of Bangladeshi firms in relation to human resources
items (see Sl nos 38-49). Nevertheless, it seems that banks commitment towards the
environment issues are fairly unsatisfactory (see Sl nos 50-54). This is the areas where
Bangladeshi banks need to prioritise substantially as part of their future CSR initiative.
Moreover, almost all banks place more emphasis (Sl nos 55-59) on reporting product
related information, banks’ approach for improving the products and customer
services and in particular, reporting additional financial statement such as value added
statement. Overall reporting score of 34.06 per cent evidences that banks CSR
reporting in the annual report are not as low as expected.

Category wise reporting volume and ranking of banks based on the total CSR
reporting items
Table IV shows the results of the descriptive analysis of CSR reporting in each broad
category of reporting items to measure the banks more keenness of reporting items. It
also shows the extent of disclosure as measured by the word count to total words for
all disclosures in the sample population and the means and standard deviations of
disclosure based on the number of words disclosed under each category. The overall
ranking of surveyed PCBs is depicted in Table V. The banks were ranked on the basis
of CSR reporting scores for each of the companies, which enables to present insights
about which banks report more social and environmental information in the annual

Percentage of
reported words
Reporting No of words (As a % of all Mean
banks (at least reported disclosed [(d)/30] Std. dev.
Categories (a) two items) (b) % (c) (amount) (d) words) (e) (f) (g)

Health sector 15 50 1,050 5.53 35.00 45.5

Education sector 10 33.33 763 4.00 25.86 62.67
Contributions for
natural disaster 25 83.33 5,406 27.71 180.2 76.5
Other donations 13.33 475 2.43 15.83 32.67
Environmental issues 4 13.33 305 1.60 10.16 34.00
Activities for
employees 26 86.66 5,536 28.38 184.53 86.00
Product/services/
statements 30 100 5,970 31.60 199.00 84.89
Table IV.
CSR reporting based Total 19,505 100
on each category of
CSRR index Note: Total surveyed banks ¼ 30
Sl Name of the banking organizations Number of item disclosed % Ranking Effect of CG
elements on
1 Dutch-Bangla Bank Ltd 56 93.33 1 CSR reporting
2 Pubali Bank Ltd 16 26.67 18
3 Uttara Bank Ltd 18 30.00 16
4 National Bank Ltd 18 30.00 16
5 The City Bank Ltd 24 40.00 15
6 United Commercial Bank Ltd 30 50.00 10 97
7 Arab Bangladesh Bank Ltd 29 48.33 11
8 IFIC Bank Ltd 29 48.33 11
9 Islamic Bank Bangladesh Ltd 35 58.33 5
10 Oriental Bank Ltd 15 25.00 19
11 Eastern Bank Ltd 34 56.67 6
12 NCC Bank Ltd 28 46.67 12
13 Prime Bank Ltd 28 46.67 12
14 South East Bank Ltd 42 70.00 2
15 Dhaka Bank Ltd 40 67.67 3
16 Al-Arafah Islami Bank Ltd 16 26.67 18
17 Social Investment Bank Ltd 33 55.00 7
18 Jamuna Bank Ltd 28 46.67 12
19 Mercantile Bank Ltd 17 28.83 17
20 Standard Bank Ltd 27 45.00 13
21 Brac Bank Ltd 30 50.00 10
22 EXIM Bank 28 46.67 12
23 Bangladesh Commerce Bank Ltd 24 40.00 15
24 Mutual Trust Bank Ltd 32 53.33 8
25 First Security Bank Ltd 28 46.67 12
26 The Premier Bank Ltd 30 50.00 10
27 Bank Asia Ltd 36 60.00 4 Table V.
28 The Trust Bank Ltd 31 51.66 9 Ranking of the banks
29 Shah Jalal Bank Ltd 29 48.33 11 based on the reporting
30 One Bank Ltd 25 41.67 14 of CSR items

reports than others. Consistent with the earlier findings, Table IV shows that surveyed
banks reported fewer words in relation to environmental and educational issues than
employees related product and service and statement information. A total of 19,030
words of CSR reporting were provided in the annual reports for the 30 surveyed
banks examined, representing an average of 634 words per annual report. Table IV,
documents all banks relative position in terms of CSR reporting items. In this respect,
Dutch Bangla Bank (DBL) Ltd has been received top position by disclosing 56 items
(93.33 per cent) out of 60 items. The in-depth investigation of this bank’s CSR activity
showed that as a responsible corporate body, this bank has been playing a pioneering
role in implementing various social and philanthropic programs to help disadvantaged
people of the country since its inception level. Carrying out diverse social and
philanthropic activities in such areas as education, healthcare, human resources
development, conservation of nature, creation of social awareness, rehabilitation of
distressed people and other programs to redress human sufferings not only enlighten
bank’s image to the society but also brings many local and international awards (DBL
has won Asian CSR Award-2005 and 2006 and many national awards for their
outstanding program on CSR). Indeed, those awards distinguish bank’s excellent
loyalty to the education and health sector, greater attentiveness and interests to
environmental issues and other social activities. However, with regards to ranking, this
IJLMA is followed by South East Bank Ltd, Dhaka Bank Ltd, Bank Asia Ltd, Islami bank
52,2 Bangladesh Ltd and so on. Oriental Bank Ltd, Pubali Bank Ltd, Mercantile Bank Ltd
obtained the lowest rank due to the least CSR reporting items. Table III documents
items which are not reported by any surveyed banks. One essential thing that emerges
following researcher’s careful assessment is that not any bank prepared CSR reports or
mentioned anything whether they might have the plan to report under the GRI
guidelines in future even if few banks employ more than ten pages for such reporting.
98 Consequently, no matter what CSR projects, the level and varieties of reporting is
addressed for substantiating organisational caring to society, consistent with other
developing countries practices the bottom line is still financial reporting in banking
sectors of Bangladesh. That is to say, financial reports that top management and
investors be desperate to look at. Whilst CSR practices is not entirely new for the banks
of Bangladesh (which is also evidenced in earlier research in the context of
Bangladesh), less improvement has been seen to report CSR into a level equal to global
practice. Because no structured pattern of highlighting bank’s CSR programme were
observed in the content of reporting, management future thought and their
commitment to address increased social demands were unreflected in current annual
reports. Given that stakeholders impose greater concern (in particular, regulatory
agency and civil society) it is now perceived as high time that top management of
banks can head out implementing more structured social reporting following global
reporting guidelines in line with developed countries practices. Management opinions
and increased plan in such areas, however, have to be constructive and forward-
looking that can be explored in future research study.

Multivariate analysis result

In this study, regression analysis was used to test the relationship between the
various independent variables and the measures of overall CSR reporting. However,
the underlying assumptions in the regression model were tested for multicollinearity
based on the correlation matrix as well as the variance inflation factor (VIF).

CSRRI ¼  0 þ  1 COMPNED þ  2 COMPWD þ  3 FOROWN

þ  4 STA þ  5 ROE þ  6 DTE þ et

where CSRRI is the corporate social responsibility reporting index, COMPNED is

the percentage of independent directors to total Directors on the board, COMPWD is
the percentage of women directors to total Directors on the board, FOROWN is the
percentage of non-Bangladeshi directors to total Directors on the board, STA is the size
on the basis of total assets, ROE is the profitability on the basis of Return on equity,
DTE is the gearing on the basis of Debt to equity ratio, et is the disturbance term,
1 . . . 6 is the Beta coefficient.

Descriptive statistics and the correlation matrix

Table VI provides descriptive statistics of the continuous independent variables. It is
noticeable that the Board composition that is measured by the proportion of non-
executive directors to total number of directors indicates not many banks have the
majority of non-executive directors on the board with a mean of 32 per cent which
clearly indicated that financial institution are mostly dominated by executive directors.
The mean value of women representation is only 10 per cent with a highest percentage
Variables Mean Std. Dev. Min. Max. Effect of CG
elements on
COMPNED 32.45 16.24 0.00 72.34 CSR reporting
COMPWD 10.45 19.08 0.00 30.25
FOROWN 20.75 27.50 0.00 50.50
STA (Tk. million) 508,000 107,080 69,380 8,566,520
ROE 35.50 11.45 22.21 80.79
DTE 31.57 25.55 2.70 79.65 99
Notes: COMPNED ¼ Percentage of independent directors to total Directors on the board;
COMPWD ¼ Percentage of women directors to total Directors on the board; Table VI.
FOROWN ¼ Percentage of non-Bangladeshi directors to total Directors on the board; STA ¼ size Descriptive statistics
on the basis of total assets; ROE ¼ profitability on the basis of Return on equity and for the independent
DTE ¼ gearing on the basis of Debt to equity ratio variables

of women representation on bank boards is over 30 per cent. Compared to the other
developed and developing counties practices (Thomas, 2001; Burgess and Tharenou,
2002), women representation on board seems rather healthier. The ratio of foreign
directors on bank boards is approximately 21 per cent although some banks’ board
encompasses half of the foreign nationals.
Table VII presents the correlation matrix for the dependent and continuous
independent variables. As can be seen from Table VII, CSR reporting is positively
associated with correlation coefficient of 0.550 ( p < 0.001) proportion of non-executive
directors on the board, similar to the study’s hypothesis. Results also show no
significant correlation between disclosure of corporate social information and
representation of women on the board. Specifically, the correlation coefficient of 0.09
( p > 0.001) fails to exhibit any confirmation of a univariate association between CSR
reporting and women’s presence on the board. However, representation of foreign
national on board is positively related to banks CSR reporting practices.
Result of multiple regressions
Table VIII shows the results of multiple regressions. As can be seen from that table, the
regression model explained 42.53 per cent (F ¼ 8.233; p ¼ 0.000) of the CSR reporting
variance for the explanatory variables. The regression model indicates a significant
( p < 0.05) relationship between the board composition variable (COMPNED) with the
extent of CSR reporting of surveyed banks. In other words, the more the number of
independent members on the Bangladeshi PCB’s board, the higher the level of social

Variables CSRRI COMPND COMPWD FOROWN ROE DTE

CSRRI 1
COMPNED 0.550** 1
COMPWD 0.096 0.095 1
FOROWN 0.258** 0.765** 0.074 1
STA 0.201* 0.050 0.067 1
ROE 0.193* 0.040 0.057 0.168 1
DTE 0.051 0.153 0.044 0.143 0.132 1

Notes: *Correlation is significant at the 0.05 level (two-tailed) ( p < 0.05); **correlation is Table VII.
significant at the 0.01 level (two-tailed) ( p < 0.01); n ¼ 30 Pearson correlations
IJLMA Variables Predicted sign Coefficient value (b) t-value p-value VIF
52,2
Intercept 1.480 0.154
COMPNED þ 0.420 4.291 0.021* 2.33
COMPWD þ 0.392 5.344 0.433 1.99
FOROWN þ 0.297 3.891 0.001** 1.56
STA þ 0.184 2.923 0.001** 2.10
100 ROE þ 0.145 2.443 0.002** 1.45
DTE þ 0.42 0.079 0.112 2.34
Table VIII. R2 (%) 47.35
Multiple regression Adjusted R2 (%) 42.53
results using index F statistics 8.233 and p ¼ 0.000
(CSRRI) as the
dependent variable Notes: * and ** significant at 5 and 1 per cent levels, respectively

information reported in the annual report. This finding supports the study’s H1. This
result is consistent with the findings of prior disclosure research (Haniffa and Cooke,
2002; Chen and Jaggi, 2000) and empirically verifies the influence of non-executive
directors on CSR reporting practices. Moreover, the finding corroborates the recent
banking sector reforms emphasising on the role of non-executive directors on company
boards in Bangladesh (Haque et al., 2007). However, the result does not support H2 as
the composition of women directors in the board (COMPWD) is not statistically
significant ( p > 0.05). Specifically, women representation on board is not significantly
related with the extent of CSR reporting reported by the banks. This result is rather
inconsistent with earlier studies that evidenced the presence of women directors have
stronger direction towards the CSR reporting (Ibrahim and Angelidis, 1994; Sicilian,
1996). One possible explanation of these dissimilar results would be that, women
empowerment in the executive level in Bangladesh is the new phenomenon and might
have the restricted role to play due to the small numbers occupying the executive
positions. Therefore their role in relation to CSR issues would either be limited or
unattended in most cases. The last CG variable, ownership by foreign shareholders
(FOROWN) was found to be statistically significant at the 1 per cent level. The
proportion of foreign national on the board of banks is significantly related with the
level of voluntary CSR reporting, accordingly provides evidence for accepting H3.
This finding is parallel with prior research by Haniffa and Cooke (2002). The model also
reveals that two control variables such as size and profitability is statistically significant
with the level of CSR reporting but gearing is not found significant. Large companies
make more CSR reporting because of accountability and visibility as delineated in LT
(Cormier and Gordon, 2001). Thus the study’s last hypothesis is partially supported. The
significance of profitability was in line with Roberts (1992) but inconsistent with Cowen
et al. (1987) and Patten (1991). This specifies that Bangladeshi banks use annual reports
as an opportunity to convey their image and legitimise their activities.
Tests of non-linearity and heteroskedasticity of the data through an analysis of
residuals indicated no major problem for regression analysis. Norusis (1995, p. 447)
described that residuals are what are left over after the model is fit and they are also
the difference between the observed value of the dependent variable and the value
predicted by the regression line. Further, the visual examination of correlation matrix
of the explanatory variables is thought of an essential way to perceive collinearity
problem. Correlation coefficient is considered problematic if it exceeded 0.8 (Farrar and Effect of CG
Glauber 1967; Studenmund 1992). A more precise and indicative method broadly used elements on
is the VIF for each of the independent variable (Kennedy, 1992). According to Neter and
Kutner (1989) co-linearity is considered a problem if the VIF exceeds ten. Thus, based CSR reporting
on correlation matrix and VIF found in the study (see Tables VII and VIII) it is unlikely
that multicollinearity is to influence the regression results, since the highest VIF of 2.34
is far less than the threshold of ten.
101
Concluding remarks, limitations and further scope of the study
This study investigates the level of CSR reporting in the annual reports of listed PCB
in Bangladesh for the period 2007-08 using content analysis. It also aims to reveal the
impact of CG elements on the level of CSR information reported by banks. The results
demonstrate that although voluntary, Bangladeshi PCBs’ CSR reporting is rather
moderate; however, the varieties of CSR reporting are really impressive. Among all
categories of CSR items, subsequent to products and service related items reporting,
most banks disclosed more on the contribution for natural disaster (every banks
donated for the flood and tornado affected people, almost every banks (above 80
per cent) distributed worm cloths among the cold-affected people and gave donation to
Prime minister relief fund for flood victims people). This is beyond doubt the indicators
of congenial society devoted activities performed by PCBs and the persistence of such
kinds is essential as the country Bangladesh undergo natural disaster in a frequent
manner. The research demonstrates that Bangladeshi banks extend their CSR
activities towards different sector such as education, health and others sector. Their
CSR efforts on these sectors represent the greater testimony of banks’ legitimacy
(existence) in the society. The finding also evidenced that surveyed banks made the
evocative contribution to the educational sector by means of giving scholarships to the
meritorious students or gifting books to the colleges and universities libraries. In
relation to banks overall ranking, while the Dutch Bangla bank Ltd has been obtained
as the most CSR disclosure items bank (they disclosed more than 90 per cent of total
items), Oriental Banks Ltd has been considered least disclosed bank with regards to
CSR reporting items (see Table IV in the analysis part of the study). To accomplish
study’s second aim, regression analysis has been used to explain variability in the
dependent variable with three elements of CG served as the independent variables in
addition to two bank-specific items considered as control variables. The result
demonstrates that two CG elements such as non-executive directors and existence of
foreign nationalities have the significant impact to explain the CSR reporting in
Bangladesh, but it provides no significant relationship between the women
representation in the board and CSR reporting. With regards to control variables, size
and profitability is found statistically significant with the level of banks CSR reporting
but the variable gearing is statistically insignificant. In other words, women presence
on board in PCBs of Bangladesh and gearing ratio do not have any impact on the CSR
reporting endeavour by banks.
In connection with the results known above, this study makes a number of possible
implications to the CSR literature. First, this study has opened an insight into CSR
reporting practice of developing country’s banking sector and thus expanding on
previous literature that has focused mainly on developed countries. It has opened up
further research avenues to compare and contrast these results with the banking
sectors of other developing or developed countries. Second, it has broadened previous
IJLMA CSR research to the banking industry, which has not generally considered from sample
52,2 companies because of the more rigorous regulatory rule. Third, from the study’s
finding, it is well documented that tendency of CSR items reporting in an isolated
manner (lacking the adoption of any guidelines or implementing international practice)
alone is not sufficient to attain overall superior level of disclosure unless, banks have
the preparation to put GRI guidelines into practice or other forms of social reporting in
102 future. Fourth, findings documented that a number of banks in Bangladesh have
contributed to different sectors of the country in particular education, health and
others. The tendency of banks for CSR reporting are in many areas, but perhaps should
reflect on the findings from Table V on what they reported nothing and should
concentrates more on these issues. Fifth, it underlines the importance of non-executive
directors and existence of foreign nationalities to improve banks’ communication on
CSR information. And lastly, as an endeavour of revealing the CSR reporting intensity
prevailing in different banks practices in Bangladesh and hypothesising the impact of
CG elements on CSR, the findings will be a good beginning for further references or
widening future study in the subject matter.
Despite this study has explored some practical implications, it has a limited scope.
These limitations however, could stir for future research. First, this analysis of the
annual reports study is based on the population sample of Bangladeshi PCBs in the
year 2007-08. Thus, the results of the study must be interpreted only with PCBs and
should not be generalised to other commercial, foreign and non-banking business
sectors. Furthermore, firms listed in Chittagong Stock Exchange or some unlisted
firms in Bangladesh such as Unilever Bangladesh, citi NA Bangladesh might report
CSR items, which have been omitted from the study. Another directions of future
research which emerge to be worthy of exploration is to find out the motives and
opinions of management towards reporting CSR information. Second, the study
considers only one period but the findings of the study might change over time.
Therefore, a longitudinal study in different time settings may offer further glitter on the
issue to know the changes of CSR reporting across time on annual reports. This point
calls for particular attention since the researcher earlier attempt (see Khan et al., 2009)
based on annual reports of 2004-05 on selected Bangladeshi banks revealed a small
amount of reporting items. Thirdly, the study was limited only to the investigation of
companies’ annual reports. The banks studied might have other means to report CSR
items such as press news, brochures and newsletters etc. Finally, the findings of the
study must be interpreted within the small sample size. Thus further research attempt
taking all commercial banks listed in DSE together with foreign banks would get better
the generalisation of the findings.
In spite of the above limitations, this study is the primary to investigate CSR
reporting practices couple with the impact of governance practices in the specific
context of banking sectors in developing country such as Bangladesh. Although its
results should be considered as the introductory insight in this stand, it would set off a
number of researchers perceptively to enlarge their research exertion to a further
assessment of this area. These days are not far-flung when PCBs of Bangladesh will
prepare social reporting and incorporating CSR activities in the strategic decision by
capitalising the positive encouragements and incentives from the regulatory bodies.
However, it is well convincing that steady research on CSR reporting is required with a
view to certifying that academics and practitioners understanding on this topic is in
harmony with what is reported in the real world.
Notes Effect of CG
1. See the Companies Act, 1994 that replaced the Companies Act, 1913 (for all companies elements on
except public enterprise), the Bank Companies Act, 1991 (for banking institutions), the
Insurance Act, 1938 (for insurance companies), the Income Tax Ordinance, 1984 (for all CSR reporting
companies and public enterprise), the Securities and Exchange Rules, 1987 (only for
public limited companies).
2. Specialised banks and national commercial banks are omitted from the study because
the aim of this research was to be familiar with CSR practicing of private commercial 103
banks. Although a total sample of 30 companies seems too few it does symbolise the
entire population assisting the ease with which to draw conclusions about the data.

References
Adams, C.A., Coutts, A. and Harte, G. (1995), ‘‘Corporate equal opportunities (non-)disclosure’’,
British Accounting Review, Vol. 27 No. 2, pp. 87-108.
Adams, C.A., Hill, W.Y. and Roberts, C.B. (1998), ‘‘Corporate social reporting practices in
Western Europe: legitimating corporate behaviour?’’, British Accounting Review, Vol. 30
No. 1, pp. 1-21.
Adams, R.B. and Ferreira, D. (2004), ‘‘Gender diversity in the boardroom’’, European Corporate
Governance Institute, Finance Working Paper No. 57.
Afroze, S. and Jahan, M.A. (2005), ‘‘Corporate governance practices in Bangladesh’’, Dhaka
University Journal of Business Studies, Vol. 26 No. 2, pp. 181-96.
Ahmed, F. (2006), ‘‘Corporate governance – Bangladesh perspective’’, paper presented at the
ICMAB Conference on Corporate Governance Bangladesh Perspective, Dhaka, pp. 24-7.
Ali, Md. M., Khan, Md. H.U.Z. and Fatima, J.K. (2008), ‘‘Intellectual capital reporting practices:
evidence from Bangladesh’’, Dhaka University Journal of Business Studies, Vol. 29 No. 1,
pp. 23-45.
Amin, A. and Tareq, M. (2006), ‘‘Reporting on corporate governance as a voluntary disclosure: a
study on the annual reports of Bangladeshi companies’’, The Bangladesh Accountant,
Vol. 33 No. 2, pp. 100-5.
Andrew, B.H., Gul, F.A., Guthrie, J.E. and Teoh, H.Y. (1989), ‘‘A note on corporate social disclosure
practices in developing countries: the case of Malaysia and Singapore’’, British Accounting
Review, Vol. 21, pp. 371-6.
Arun, T.G. and Turner, J. (2003), ‘‘Corporate governance of banks in developing economies:
concepts and issues’’, Corporate Governance: An International Review, Vol. 12 No. 3,
pp. 371-7.
Ayuso, S. and Argandona, A. (2007), ‘‘Responsible corporate governance: towards a stakeholder
board of directors?’’, Working Paper No. 701, IESE Business School, Barcelona, July.
Bangladesh Bank (2007), Bangladesh Bank Statistics, Bangladesh Bank, Motijheel, available at:
www.bangladesh-bank.org/ (accessed 15 October 2008).
Barako, G.D. and Alistair, M.B. (2008), ‘‘Corporate social reporting and board representation:
evidence from the Kenyan banking sector’’, Journal of Management Governance, Vol. 12,
pp. 309-24.
Belal, A. (2000), ‘‘Environmental reporting in developing countries: empirical evidence from
Bangladesh’’, Eco-management and Auditing (UK), Vol. 7 No. 3, pp. 114-21.
Belal, A. and Owen, D. (2007), ‘‘The views of corporate managers on the current state of, and
future prospects for, social reporting in Bangladesh: an engagement-based study’’,
Accounting, Auditing & Accountability Journal, Vol. 20 No. 3, pp. 472-94.
Belal, A.R. (1999), ‘‘Corporate social disclosure in Bangladesh annual reports’’, The Bangladesh
Accountants, ICAB, Vol. 27 No. 1, pp. 76-81.
IJLMA Belal, A.R. (2001), ‘‘A study of corporate social disclosures in Bangladesh’’, Managerial Auditing
Journal, Vol. 16 No. 5, pp. 274-89.
52,2 Belkaoui, A.R. and Kahl, A. (1978), ‘‘Corporate financial disclosure in Canada’’, Research
Monograph No. 1 of Canadian Certified General Accountants Association, Vancouver.
Bhuiyan, Md. H.U. and Biswas, P.K. (2007), ‘‘Corporate governance and reporting: an empirical
study of the listed companies in Bangladesh’’, Dhaka University Journal of Business
Studies, Vol. 28 No. 1, pp. 34-64.
104
Branco, C.M. and Rodrigues, L.L. (2008), ‘‘Social responsibility disclosure: a study of proxies
for the public visibility of Portuguese banks’’, The British Accounting Review, Vol. 40,
pp. 161-81.
Buhr, N. (1998), ‘‘Environmental performance legislation and annual report disclosure: the case
of acid rain and Falconbridge’’, Accounting, Auditing and Accountability Journal, Vol. 11
No. 2, pp. 163-90.
Burgess, Z. and Tharenou, P. (2002), ‘‘Women board directors: characteristics of the few’’, Journal
of Business Ethics, Vol. 37 No. 1, pp. 39-49.
Campbell, D.J. (2000), ‘‘Legitimacy theory or managerial reality construction? Corporate social
disclosure in Marks & Spencer Plc corporate reports, 1969-1997’’, Accounting Forum,
Vol. 24 No. 1, p. 80.
Carter, D.A., Simkins, B.J. and Simpson, W.G. (2003), ‘‘Corporate governance, board diversity and
firm value’’, The Financial Review, Vol. 38, pp. 33-53.
Chaudhury, A.M. (2004), ‘‘Corporate governance – an industry perspective’’, The Bangladesh
Accountant, October-December, pp. 12-21.
Chen, C. and Jaggi, B. (2000), ‘‘Association between independent non-executive directors, family
control, and financial disclosures in Hong Kong’’, Journal of Accounting and Public Policy,
Vol. 19, pp. 285-310.
Chowdhury, A.I. and Chowdhury, A.K. (1996), ‘‘Corporate social accounting: do we really need
it?’’, The Bangladesh Accountant, April-June, pp. 90-100.
Claessens, S. (2003), Corporate Governance and Development, Global Corporate Governance
Forum, Washington, DC.
Clarke, J. and Gibson-Sweet, M. (1999), ‘‘The use of corporate social disclosures in the
management of reputation and legitimacy. Business Ethics’’, European Review, Vol. 8 No. 1,
pp. 5-13.
Cooke, T.E. (1996), ‘‘The influence of the Keiretsu on Japanese corporate disclosure’’, Journal of
International Financial Management and Accounting, Vol. 7 No. 3, pp. 191-215.
Cormier, D. and Gordon, I.M. (2001), ‘‘An examination of social and environmental reporting
strategies’’, Accounting, Auditing and Accountability Journal, Vol. 14 No. 5, pp. 587-616.
Coulson, A.B. and Monks, V. (1999), ‘‘Corporate environmental performance considerations
within bank lending decisions’’, Eco-Management and Auditing, Vol. 6 No. 1, pp. 1-10.
Cowen, S.S., Ferreri, L.B. and Parker, L.D. (1987), ‘‘The impact of corporate characteristics on
social responsibility disclosure: A typology and frequency-based analysis’’, Accounting,
Organizations and Society, Vol. 12 No. 2, pp. 111-22.
Dahya, J., Lonie, A.A. and Power, D.M. (1996), ‘‘The case for separating the roles of Chairman and
CEO: an analysis of stock market and accounting data’’, Corporate Governance – An
International Review, Vol. 4 No. 1, pp. 71-7.
(The) Daily Star (2008), ‘‘10pc tax waiver on CSR spending’’, 25 December, p. 6.
Deakin, S. and Whittaker, D.H. (2007), ‘‘Re-embedding the corporation? Comparative perspectives
on corporate governance, employment relations and corporate social responsibility’’,
Corporate Governance: An International Review, Vol. 15, pp. 1-4.
Deegan, C. and Gordon, B. (1996), ‘‘A study of the environmental disclosure policies of Australian Effect of CG
corporations’’, Accounting and Business Research, Vol. 26 No. 3, pp. 187-99.
Deegan, C. and Rankin, M. (1996), ‘‘Do Australian companies report environmental news
elements on
objectively? An analysis of environmental disclosures by firms prosecuted successfully by CSR reporting
the Environmental Protection Authority’’, Accounting, Auditing and Accountability
Journal, Vol. 9 No. 2, pp. 52-69.
Deegan, C. and Rankin, M. (1997), ‘‘The materiality of environmental information to users of
annual reports’’, Accounting, Auditing and Accountability Journal, Vol. 10 No. 4, pp. 562-83. 105
Deegan, C., Rankin, M. and Tobin, J. (2002), ‘‘An examination of the corporate social and
environmental disclosures of BHP from 1983-1997: a test of legitimacy theory’’,
Accounting, Auditing & Accountability Journal, Vol. 15 No. 3, pp. 312-43.
Deegan, C., Rankin, M. and Voght, P. (2000), ‘‘Firms’ disclosure reactions to major social incidents:
Australian evidence’’, Accounting Forum, Vol. 24 No. 1, pp. 101-30.
Donaldson, T. and Preston, L. (1995), ‘‘The stakeholder theory of the corporation – concepts,
evidence, and implications’’, Academy of Management Review, Vol. 20 No. 1, pp. 65-92.
Douglas, A., John, D. and Brian, J. (2004), ‘‘Corporate social reporting in Irish financial
institutions’’, The TQM Magazine, Vol. 16 No. 6, pp. 387-9.
Erhardt, N.L., James, D.W. and Charles, B.S. (2003), ‘‘Board of director diversity and firm financial
performance’’, Corporate Governance – An International Comparison, Vol. 11 No. 2,
pp. 102-11.
Fama, E. and Jensen, M. (1983), ‘‘Separation of ownership and control’’, Journal of Law and
Economics, Vol. 26, pp. 301-25.
Farrar, D. and Glauber, R. (1967), ‘‘Multicollinearity in regression analysis: the problem revisited’’,
Review of Economics and Statistics, pp. 92-107.
Fields, M.A. and Keys, P.Y. (2003), ‘‘The emergence of corporate governance from Wall St to Main
St: outside directors, board diversity, earnings management, and managerial incentives to
bear risk’’, The Financial Review, Vol. 38, pp. 1-24.
(The) Financial Express (2008), ‘‘The Bangladesh Bank (BB) will monitor adoption of CSR by
banks’’, p. 4, available at: www.thefinancialexpressbd.info/ (accessed 18 December).
Gray, R. (2002), ‘‘The social accounting project and accounting, organisations and society:
privileging engagement, imaginings, new accountings and pragmatism over critique?’’,
Accounting, Organisations and Society, Vol. 27 No. 7, pp. 687-708.
Gray, R., Kouhy, R. and Lavers, S. (1995a), ‘‘Corporate social and environmental reporting: a
review of the literature and a longitudinal study of UK disclosure’’, Accounting, Auditing
and Accountability Journal, Vol. 8 No. 2, pp. 47-77.
Gray, R., Kouhy, R. and Lavers, S. (1995b), ‘‘Constructing a research database of social and
environmental reporting by UK companies’’, Accounting, Auditing and Accountability
Journal, Vol. 8 No. 2, pp. 78-101.
Griffiths, M. (2007), ‘‘Consumer debt in Australia: why banks will not turn their backs on profit’’,
International Journal of Consumer Studies, Vol. 31 No. 3, pp. 230-6.
Guthrie, J. and Parker, L. (1990), ‘‘Corporate social disclosure practice: a comparative
international analysis’’, Advances in Public Interest Accounting, Vol. 3, pp. 159-75.
Guthrie, J.E. and Parker, L.D. (1989), ‘‘Corporate social reporting: a rebuttal of legitimacy theory’’,
Accounting & Business Research, Vol. 19 No. 76, pp. 343-52.
Halabi, A.K., Kazi, A.U., Dang, V. and Samy, M. (2006), ‘‘Corporate social responsibility: how the
top ten stack up’’, Monash Business Review, Vol. 3 No. 2, pp. 20-4.
Haniffa, R.M. and Cooke, T.E. (2002), ‘‘Culture, corporate governance and disclosure in Malaysian
corporations’’, Abacus, Vol. 38 No. 3, pp. 317-49.
IJLMA Haniffa, R.M. and Cooke, T.E. (2005), ‘‘The impact of culture and governance on corporate social
reporting’’, Journal of Accounting and Public Policy, Vol. 24 No. 5, pp. 391-430.
52,2
Haque, A.K.E., Jalil, M.B. and Naz, F. (2007), ‘‘State of corporate governance in Bangladesh:
analysis of public limited companies – financial, nonfinancial institution and state owned
enterprises’’, Working Paper Series No. 2, Centre for Research and Training, Dhaka,
September.
Harte, G. and Owen, D. (1991), ‘‘Environmental disclosure in the annual reports of British
106 companies: a research note’’, Accounting, Auditing and Accountability Journal, Vol. 4 No. 3,
pp. 51-61.
Herremans, I.M., Akathaporn, P. and McInnes, M. (1993), ‘‘An investigation of corporate social
responsibility reputation and economic performance’’, Accounting, Organizations and
Society, Vol. 18 Nos 7/8, pp. 587-604.
Holsti, O.R. (1969), Content Analysis for the Social Sciences and Humanities, Addison-Wesley,
London.
Hossain, M., Tan, L.M. and Adams, M. (1994), ‘‘Voluntary disclosure in an emerging capital
market: Some empirical evidence from companies listed on Kuala Lumpur stock
exchange’’, The International Journal of Accounting, Vol. 29 No. 4, pp. 334-51.
Huse, M., and Solberg, A.G. (2006), ‘‘Gender-related boardroom dynamics: how Scandinavian
women make and can make contributions on corporate boards’’, Women in Management
Review, Vol. 21 No. 2, pp. 113-30.
Ibrahim, N.A., and Angelidis, J.P. (1994), ‘‘Effect of board members’ gender on corporate social
responsiveness orientation’’, Journal of Applied Business Research, Vol. 10 No. 1, pp. 35-41.
Imam, M.O. (2006), ‘‘Firm performances and corporate governance through ownership structure:
evidence from Bangladesh stock market’’, Proceedings of the ICMAB Conference on
Corporate Governance Bangladesh Perspective, Dhaka, pp. 31-47.
Imam, S. (2000), ‘‘Corporate social performance reporting in Bangladesh’’, Managerial Auditing
Journal, Vol. 15 No. 3, pp. 133-41.
Jensen, M.C. and Meckling, W.H. (1976), ‘‘Theory of the firm managerial behavior, agency costs
and ownership structure’’, Journal of Financial Economics, Vol. 3 No. 4, pp. 305-60.
Jeucken, M.H.A. and Bouma, J.J. (1999), ‘‘The changing environment of banks’’, Greener
Management International, Vol. 27, pp. 21-35.
Kennedy, P. (1992), A Guide to Econometrics, MIT Press, Cambridge, MA.
Khalid, A. (2005), ‘‘The association between firm-specific characteristics and disclosure: the case
of Saudi Arabia’’, The Journal of American Academy of Business, Vol. 7 No. 1, pp. 1-26.
Khan, Md. H.U.Z., Halabi, A.K. and Samy, M. (2009), ‘‘CSR reporting practice: a study of selected
banking companies in Bangladesh’’, Social Responsibility Journal, Vol. 5 No. 3, pp. 344-57.
Leung, S. and Horwitz, B. (2004), ‘‘Director ownership and voluntary segment disclosure: Hong
Kong evidence’’, Journal of International Financial Management and Accounting, Vol. 15
No. 3, pp. 235-60.
Lindblom, C.K. (1993), ‘‘The implications of organizational legitimacy for corporate social
performance and disclosure’’, paper presented at the Critical Perspectives on Accounting
Conference, New York, NY.
McLaren, D. (2004), ‘‘Global stakeholders: corporate accountability and investor engagement’’,
Corporate Governance: An International Review, Vol. 12, pp. 191-201.
Macey, J. and O’Hara, M. (2001), ‘‘The corporate governance of banks’’, Federal Reserve Bank of
New York Economic Policy Review, Vol. 9 No. 1, pp. 97-107.
Maier, S. (2005), How Global is Good Governance?, Ethical Investment Research Services, London.
Mangos, N.C. and Lewis, N.R. (1995), ‘‘A socio-economic paradigm for analysing managers – Effect of CG
accounting choice behaviour’, Accounting, Auditing and Accountability Journal, Vol. 8 No. 1,
pp. 38-62.
elements on
Malone, D., Fries, C. and Jones, T. (1993), ‘‘An empirical investigation of the extent of corporate CSR reporting
financial disclosure in the oil and gas industry’’, Journal of Accounting, Auditing and
Finance, Vol. 8, pp. 249-73.
Mathews, M.R. (1997), ‘‘Twenty-five years of social and environmental accounting research: 107
is there a silver jubilee to celebrate?’’, Accounting, Auditing and Accountability Journal,
Vol. 10 No. 4, pp. 481-531.
Milne, M.J. and Pattern, D.M. (2002), ‘‘Securing organisational legitimacy: an experimental
decision case examining the impact of environmental disclosures’’, Accounting, Auditing &
Accountability Journal, Vol. 15 No. 3, pp. 372-405.
Mir, M.Z. and Rahaman, A.S. (2005), ‘‘The adoption of international accounting standards in
Bangladesh: an exploration of rationale and process’’, Accounting, Auditing &
Accountability Journal, Vol. 18 No. 6, pp. 816-41.
Mitchell, R.K., Agle, B.R. and Wood, D.J. (1997), ‘‘Toward a theory of stakeholder identification
and salience: defining the principle of who and what really counts’’, Academy of
Management Review, Vol. 22 No. 4, pp. 853-86.
Moerman, L. and Van Der Laan, S. (2005), ‘‘Social reporting in the tobacco industry: all smoke
and mirrors?’’, Accounting, Auditing & Accountability Journal, Vol. 18 No. 3, pp. 374-89.
Murthy, V. and Abeysekera, I. (2008), ‘‘Corporate social reporting practices of top Indian software
firms’’, The Australasian Accounting Business and Finance Journal, Vol. 2 No. 1, pp. 36-50.
Myers, S.C. (1977), ‘‘Determinants of corporate borrowing’’, Journal of Financial Economics Vol. 5,
pp. 147-75.
Neter, J. and Kutner, M. (1989), Applied Linear Regression Models, Irwin, Illinois, IL, pp. 1-220.
Neu, D., Warsame, H. and Pedwell, K. (1998), ‘‘Managing public impressions: environmental
disclosures in annual reports’’, Accounting, Organisations and Society, Vol. 23 No. 3,
pp. 265-82.
Newson, M. and Deegan, C. (2002), ‘‘An exploration of the association between global
expectations and corporate social disclosure practices in the Asia–Pacific region’’, The
International Journal of Accounting, Vol. 37 No. 2, pp. 183-213.
Nikolaou, I.E. (2007), ‘‘Environmental accounting as a qualitative improvement of banks’ service’’,
International Journal of Financial Service Management, Vol. 2 No. 2, pp. 133-5.
Norusis, M.J. (1995), SPSS 6.1 Guide to Data Analysis, Prentice Hall, Englewood Cliffs, NJ.
O’Donovan, G. (2002), ‘‘Environmental disclosures in the annual report. Extending the
applicability and predictive power of legitimacy theory’’, Accounting, Auditing &
Accountability Journal, Vol. 15 No. 3, pp. 344-71.
O’Dwyer, B. (2002), ‘‘Managerial perceptions of corporate social disclosure. An Irish story’’,
Accounting, Auditing & Accountability Journal, Vol. 15 No. 31, pp. 406-36.
Oliver, C. (1991), ‘‘Strategic responses to institutional processes’’, Academy of Management
Review, Vol. 16 No. 1, pp. 145-79.
Patten, D.M. (1991), ‘‘Exposure, legitimacy, and social disclosure’’, Journal of Accounting and
Public Policy, Vol. 10 No. 4, pp. 297-308.
Patten, D.M. (1992), ‘‘Intra-industry environmental disclosures in response to the Alaskan oil
spill: a note on legitimacy theory’’, Accounting, Organization and Society, Vol. 17 No. 5,
pp. 471-5.
IJLMA Rahaman, K.M. and Jabed, M.J.H. (2003), ‘‘Corporate responsibility in Bangladesh: where do we
stand?’’, CPD Report No. 54, available at: www.cpd-bangladesh.org/ (accessed 18 January
52,2 2009).
Rashid, N. (2005), ‘‘The human resources opportunities for universities students: a study of
private sectors in Bangladesh’’, Journal of Business Administrations, Vol. 5 No. 1, pp. 23-32.
Roberts, C.B. (1990), ‘‘International trends in social and employee reporting’’, Occasional Research
Paper No. 6, ACCA, London.
108 Roberts, R.W. (1992), ‘‘Determinants of corporate responsibility disclosure’’, Accounting,
Organisations and Society, Vol. 17 No. 6, pp. 595-612.
Ryan, L.V. (2005), ‘‘Corporate governance and business ethics in North America: the state of the
art’’, Business & Society, Vol. 44, pp. 40-73.
Schipper, K. (1981), ‘‘Discussion of voluntary corporate disclosure: the case of interim reporting’’,
Journal of Accounting Research, Vol. 19 (Supp), pp. 85-8.
Sharma, A.K. and Talwar, B. (2005), ‘‘Corporate social responsibility: modern vis-à-vis Vedic
approach’’, Measuring Business Excellence, Vol. 9 No. 1, pp. 35-45.
Shleifer, A. and Vishny, R. (1997), ‘‘A survey of corporate governance’’, Journal of Finance, Vol. 52,
pp. 737-83.
Sicilian, J.I. (1996), ‘‘The relationship of board member diversity and organization performance’’,
Journal of Business Ethics, Vol. 15 No. 12, pp. 1313-20.
Simms, J. (2002), ‘‘Business: corporate social responsibility – you know it makes sense’’,
Accountancy, Vol. 130 No. 11, pp. 48-50.
Simpson, W.G. and Kohers, T. (2002), ‘‘The link between corporate social and financial
performance: evidence from the banking industry’’, Journal of Business Ethics, Vol. 35 No. 2,
pp. 97-109.
Singh, D.R. and Ahuja, J.M. (1983), ‘‘Corporate social reporting in India’’, The International
Journal of Accounting, Vol. 18 No. 2, pp. 151-69.
Studenmund, A.H. (1992), Using Econometrics: A Practical Guide, 6th ed., India, pp. 1-648.
Thomas, B. (2001), ‘‘Women at the top in British retailing: a longitudinal analysis’’, The Service
Industries Journal, Vol. 21 No. 3, pp. 1-12.
Tilt, C.A. (1994), ‘‘The influence of external pressure groups on corporate social disclosure:
some empirical evidence’’, Accounting, Auditing and Accountability Journal, Vol. 7 No. 4,
pp. 56-71.
Tricker, R.I. (1984), Corporate Governance – Practices, Procedures and Powers in British
Companies and their Boards of Directors, Gower Publishing, Aldershot.
Trotman, K.T. and Bradley, G.W. (1981), ‘‘Association between social responsibility disclosure
and characteristics of companies’’, Accounting, Organizations and Society, Vol. 6 No. 4,
pp. 355-62.
Tsang, W.K. Eric (1998), ‘‘A longitudinal study of corporate social reporting in Singapore: the
case of the banking, food and beverages and hotel industries’’, Accounting, Auditing and
Accountability Journal, Vol. 11 No. 5, pp. 624-8.
Uddin, M.S., Mohiuddin, M. and Ahamed, S. (1999), ‘‘Disclosure of social performance in
the corporate reports of Bangladesh’’, The Cost and Management Journal, Vol. 27 No. 1,
pp. 18-22.
Walden, W.D. and Schwartz, B.N. (1997), ‘‘Environmental disclosures and public policy pressure’’,
Journal of Accounting and Public Policy, Vol. 16 No. 2, pp. 125-54.
Wallace, R.S.O., Naser, K. and Mora, A. (1994), ‘‘The relationship between the comprehensiveness
of companies annual reports and firms characteristics in Spain’’, Accounting and Business
Research, Vol. 25, pp. 41-53.
Weber, R.P. (1988), Basic Content Analysis, Sage University Paper Series on Quantitative Effect of CG
Applications in the Social Sciences, Sage, Beverly Hills, CA and London.
Wieland, J. (2005), ‘‘Corporate governance, values management, and standards: a European
elements on
perspective’’, Business & Society, Vol. 44, pp. 74-93. CSR reporting
Wilmhurst, D.W., and Frost, G.R. (2000), ‘‘Corporate environmental reporting: a test of legitimacy
theory’’, Accounting, Auditing & Accountability Journal, Vol. 13 No. 1, pp. 10-26.
Yamak, S. and Süer, O. (2005), ‘‘State as a stakeholder’’, Corporate Governance, Vol. 5 No. 2, pp. 111-20. 109
Zahra, S.A. and Stanton, W.W. (1988), ‘‘The implications of Board of Directors – composition on
corporate strategy and performance’’, International Journal of Management, Vol. 5 No. 2,
pp. 229-36.
Zeghal, D. and Ahmed, S.A. (1990), ‘‘Comparison of social responsibility information disclosure
media used by Canadian firms’’, Accounting, Auditing & Accountability Journal, Vol. 3
No. 1, 41-53.

Further reading
Ahmad, S. and Khanal, D.R. (2007), ‘‘Services trade in developing Asia: a case study of the
banking and insurance sector in Bangladesh’’, Working Paper Series No. 38, Asia-Pacific
Research and Training Network on Trade, Bangkok, July.
Ahmed, K. and Nicholls, D. (1994), ‘‘The impact of non-financial company characteristics on
mandatory disclosure compliance in developing countries: the case of Bangladesh’’, The
International Journal of Accounting, Vol. 29, pp. 62-77.
Belal, A.R. (1997), ‘‘Green reporting practices in Bangladesh’’, The Bangladesh Accountant, Vol. 25
No. 2, pp. 107-15.
Cadbury, A. (2002), Corporate Governance and Chairmanship: A Personal View, Oxford
University Press, Oxford.
Eng, L.L. and Mak, Y.T. (2003), ‘‘Corporate governance and voluntary disclosure’’, Journal of
Accounting and Public Policy, Vol. 22, pp. 325-45.
Hossain, M., Islam, K. and Andrew, J. (2006), ‘‘Corporate social and environmental disclosure in
developing countries: evidence from Bangladesh’’, Proceedings of the Asian Pacific
Conference on International Accounting Issues, Maui, HI, October.
Hossain, M.A. (1999), ‘‘Disclosure of information in corporate annual reports of listed non-
financial companies in developing countries: a comparative study of India, Pakistan and
Bangladesh’’, unpublished PhD thesis, School of Accounting and Finance, The Victoria
University of Manchester, Manchester.
Milne, M.J., and Adler, R.W. (1999), ‘‘Exploring the reliability of social and environmental
disclosures content analysis’’, Accounting, Auditing & Accountability Journal, Vol. 12 No. 3,
pp. 237-56.
Neter, J., Wasserman, W. and Kutner, M. (1983), Applied Linear Regression Models, Richard D.
Irwin, Homewood, IL.

Corresponding author
Md. Habib-Uz-Zaman Khan can be contacted at: sumkadu@yahoo.com

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.