The policies and practices of CSR in Saudi Arabian bank

Abstract

This thesis explores how, why and with what impact banks based in the Kingdom of Saudi Arabia (KSA) engage in corporate social responsibility (CSR). It is the first multidimensional qualitative sectoral study of CSR policies and practices in the KSA set within the context of Vision 2030, the government’s national blueprint for socioeconomic development under which the banking sector is crucial to the growth of the private sector and national economic diversification. Prior studies have focused on specific aspects of CSR, such as transparency, disclosure and the intersection of CSR and marketing in the industrial and retail sectors, but no prior research has focused on the banking sector. At the heart of the thesis is a set of nine case studies of CSR at collaborating banks based on 16 semi-structured interviews conducted with departmental heads and other CSR specialists, 15 semi-structured interviews conducted with executives and case workers at beneficiary charitable organizations, and numerous published and private company documents made available by collaborating banks. Data were coded and analysed using the Gioia method of thematic reduction to determine aggregate themes. Comparisons are made between Saudi banks to identify similarities and differences in policies and practices, distinguishing between the banks in terms of impact and identifying best practices and areas for improvement in the exercise of CSR. Additional data from national policy documents, media reports and nine semi-structured interviews with government officials and CSR experts help in contextualizing, generalizing, and triangulating the main findings. These are fourfold. First, the findings suggest that the national socioeconomic environment in the KSA continues to have a significant bearing on the CSR strategies and policies of Saudi banks. Understanding how CSR policies are formed and implemented requires a deep understanding of the cultural, social and religious context prevailing in the country. I suggest that a national CSR strategy might lend more direction, expand activities, and increase the effectiveness of banking sector CSR. Second, various motivators drive Saudi banks to engage in CSR activities, including religious beliefs, competitive pressures, stakeholder expectations, reputational benefits, and demand for ethical and sustainable practices among consumers. Thus far, it is argued, the government has not provided sufficient incentives for companies to engage heavily and strategically in CSR. Third, the research shows how similar and different Saudi banks are in implementing CSR policies and practices. Three banks stand out in outperforming the other six. Overall, however, the amounts of money allocated to CSR are relatively small when compared to banking revenues, profits and dividends. This limitation on the scale and scope of activities suggests that CSR is still in its infancy and that with more resources and effort the banks might better align their CSR policies and activities with Vision 2030. Fourth, I find resource constraints and immaturity in the organization and management of CSR inevitably limit the benefits of CSR to society. Both companies and policymakers can use these findings to bolster the CSR policies and practices of banks, increasing the scale, scope and impact of their CSR activities