The Effect of Leadership on Corporate Governance through the Integration of Corporate Social Responsibility Perspectives from the Boards of Directors and Chief Executive Officers of the Libyan Commercial Banks Being a Thesis Submitted in Partial Fulfilment of the Requirements for the Degree of Doctor of Philosophy in the University of Hull by Khalid Altaher Alshaikh BSc, University of Misrata, Libya - 1998 MSc, Academy of Graduate Studies, Libya - 2005 September 2019 In the name of Allah, most Gracious, most merciful ii Dedication I dedicate this achievement to the people, who have never ceased from the encouragement of me pursuing my studies, My parents. I also dedicate this dissertation to my beloved country, Libya. iii Acknowledgements First, I am thankful to Almighty Allah for all the help and blessings he has bestowed upon me, including the abilities to finish this work. Certainly, many individuals deserve a special gratitude because without their supports, assistances, and encouragements, I would surely have not arrived to this point and accomplished this thesis. However, due to constraints of space, it is impossible to mention all the names. I would specifically thank my parents for their encouragement and support since my first enrolment in school and for their prayers throughout my life. My appreciation also goes to my supervisor Christopher Bovis for his support and advice during my PhD journey. Many thanks to the internal and the external examiners for taking out time to examine this thesis. My thanks to all my friends and colleagues at the University of Hull. Also, I would like to express my appreciation to my brothers and sisters and to all my relatives and friends in Libya for their continuous moral support during my study. Finally, special thanks to my country Libya for its valuable contributions throughout my studies, without forgetting the interviewees’ cooperation. iv Abstract Corporate Governance (CG), Corporate Social Responsibility (CSR) and leadership have become such related concepts that each concept is a supplement and/or a complement to the other. CG, for example, has come to govern the principle-agent relationship and ensure the satisfaction of various stakeholders’ interests. CSR demands organisations to provide economic, social and environmental justice where they operate. Leadership is the ability of those with power to influence and guide followers to achieve common goals and simultaneously comprehend and respond bravely and constructively to the most critical economic, social and ecological challenges. Thus, once employed altogether effectively, these concepts establish healthy relationships with various stakeholders, gain competitiveness and generate corporate profits. However, these concepts have been recently under investigation in Libyan society. Scholars and private and public institutions have commenced examining the possible resolutions CG, CSR and leadership can arrange to alleviate the economic, social and environmental concerns the war has produced. Thus far, levels and efforts to apply CG codes have varied in Libyan companies. CSR is a new organisational culture that still designs its route within the Libyan commercial banks (LCBs). Leadership in the LCBs requires transformational and transactional styles to detach itself from any notion of dictatorship and autocratic traits. Therefore, this study tried to link the three concepts CG, CSR and leadership by exploring the impact of the board and executive leadership on CG framework to integrate CSR strategies in the LCBs. To achieve its goal, the study relied on three main questions to examine: First, to what extent does the board and executive leadership involve in the formation and application of CG structure? Second, to what extent does the board and executive leadership, through TSL and TFL styles, facilitate the application of CSR activities in the LCBs in light of the current Libyan crisis? Third, how does the board and executive leadership influence CG regulations to include CSR agendas in the LCBs to manage the issues caused by the current Libyan crisis? To answer these main questions, it was necessary to create a group of sub questions that investigated: First, the meanings, the current situations and challenges of CG, CSR and leadership? Second, the nature of relationship between CG and CSR in the LCBs? Third, the position of the TSL and TFL styles in the LCBs? In regard with the methodology, the study adopted the qualitative approach and conducted semi-structured interviews to collect the required data from 21 BMs and CEOs in 12 public and private LCBs. Then, the data was analysed by using grounded theory approach and thematic analysis method. The study provided some findings that answer the sub and main research questions starting with the sub question the findings showed that CG has narrow and wide definitions in the LCBs. Besides, the findings indicate that CSR is mainly encouraged and directed by religion and is centred on the notion of charity, and hardly touch upon achieving sustainable development. CG and CSR have a mutual relationship. Moreover, the findings demonstrate that Leadership features in the LCBs are under the influence of three factors, including the legacy of the previous regime, the Islamic culture and the Western perspective of leadership. Nonetheless, the leadership’s attempts to v make economic and social changes seem difficult due to some challenges such as the weak of knowledge in regard with CG and CSR in the LCBs, the weak CG Enforcement system in addition to the Confusion between CSR and the notion of philanthropy, the transformation from traditional to Islamic banks and the impact of social and tribal culture. Concerning the main researcher questions, the findings revealed that the BoDs and CEOs involved in the establishment of the Libyan Corporate governance code (LCGC) by compromising the CG international guidelines with national laws and regulations, in addition to their crucial role in the application and development of CG policies within their banks. The findings also indicated that BoDs and CEOs applied TFL and TSL styles. Both styles work together as continuum to enable the implementation of CSR activities within and outside the banks. Finally, the finding confirmed that the BoDs and CEOs influence the CG regulations to include the CSR practices in the LCBs to meet the interests of both shareholders and other stakeholders. The study has some limitations, including the lack of literature regarding to the concepts of CG, CSR and leadership in Libya. Additionally, the study did not include leaders from the middle and lower management and also did not cover other stakeholders’ entities. Moreover, this study did not distinguish the differences between the public banks from the private banks. Female participants are absent in this research due to engendered Libyan environment. Finally, the Libyan crisis experienced during the conduct of this research influenced, somehow, the findings of this research. vi Table of Contents The name of Allah ………………………………………………………………………….. ii Dedication .. ......................... ……………………………………………………………iii Acknowledgements .................................................................................... iv Abstract ……………………………………………………………………………….............v Table of Contents ...................................................................................... vii List of Figures, Tables, Appendices and Legislations .................................. xi List of Abbreviations …….……………………………………………………….……... xii Research Introduction Introduction ................................................................................................1 Research Background .................................................................................. 2 Research Signifacance ……..……………………………………………………………….4 Research Objectives .................................................................................... 5 Research Questions ..................................................................................... 6 Research Methodology Overview ................................................................ 6 The Findings of the Research ...................................................................... 7 Contribution of the Study ………………………………………………………………..10 Thesis Structure ........................................................................................ 11 Conclusion .................................................................................................14 Chapter 1: Research Methodology Introduction .............................................................................................. 15 1.1 Research Objectives .............................................................................. 15 1.2 Research Questions ..............................................................................16 1.3 Research Strategies and methods ........................................................ 23 1.4 Validity and Reliability of Research Methods....................................... 35 1.5 Ethical Considerations ......................................................................... 37 Conclusion …………………………………………………………………………………… 38 Literature Review (Chapters 2 & 3) Chapter 2: Historical Background of Corporate Governance, Corporate Social Responsibility and Leadership Introduction ............................................................................................. 40 2.1. Theoretical Framework for Corporate Governance Introduction