Economic Implications of Corporate Governance and Corporate Social Responsibility: Evidence from Banks in Bangladesh

TL;DR

This paper examines the challenges and implications of CSR in Bangladesh's banking sector, highlighting regulatory gaps, implementation issues, and the need for policy reforms to align CSR with sustainable development.

Contribution

It provides an empirical analysis of CSR practices in Bangladeshi banks, revealing gaps between policy and practice, and suggests reforms for more effective, inclusive CSR implementation.

Findings

CSR is driven by profit motives rather than social needs

Weak regulatory oversight hampers effective CSR implementation

Limited stakeholder participation reduces CSR impact

Abstract

This study explores the challenges and implications of Corporate Social Responsibility (CSR) in the banking sector of Bangladesh, highlighting its regulatory framework, implementation gaps, and alignment with sustainable development goals. While the central bank mandates CSR, the profit-driven nature of banking institutions often shifts the focus of CSR initiatives toward competitive advantage and brand enhancement rather than addressing genuine social and environmental needs. Major investments are concentrated in the education and health sectors, with minimal attention to ecological sustainability and marginalized communities. Weak regulatory oversight, profit-oriented governance structures, and limited stakeholder participation hinder the effective implementation of CSR. The lack of diversity in board representation, particularly the exclusion of women and underrepresented groups, further limits CSR's participatory and inclusive nature. This study underscores the need for stronger policy interventions, enhanced monitoring mechanisms, and a shift in corporate governance to transform CSR into a tool for meaningful societal impact. The findings call for further research to explore strategies for aligning profit-driven motives with sustainable and equitable development objectives.