CORPORATE SOCIAL RESPONSIBILITY PRACTICES IN THE LEBANESE BANKING SECTOR: A REALITY OR A MYTH? _________________________________________________ A Thesis presented to the Faculty of Business Administration and Economics at Notre Dame University-Louaize _________________________________________________ In Partial Fulfillment of the Requirements for the Degree Master of Science In Business Strategy _______________________________________________________________ by MARIA CHLELA JULY2020 © COPYRIGHT By Maria Chlela 2020 All Rights Reserved Notre Dame University - Louarze Facultyof K*zz*ixx*ss1a^q2xxttyti*tyeti{tzz8*Wu"rrxtyxzz\*s Department of f&'anas*]wnt k T,La{keling We hereby approve the thesis of 7,",1,:,xt* t-.h\*l,t candidate for the degree of h4a*tsrs tsl's*,i*r:tt*, in T-lusiness strztl*gy Grade: B c 0Le Mr . {}hass an ni *\ z: t> ttthv Supe{vsttrr 6) & h,t*t'2li n" 13M,W tr7**n. t;13AI: ii TABLE OF CONTENTS LIST OF FIGURES ........................................................................................................... iv LIST OF TABLES ............................................................................................................. iv ACKNOWLEDGMENTS .................................................................................................. v ABSTRACT ....................................................................................................................... vi CHAPTER 1-INTRODUCTION ........................................................................................ 1 1.1- General Background ............................................................................................ 1 1.2- Need for the Study ............................................................................................... 5 1.3- Purpose of the Study ............................................................................................ 6 1.4- Brief overview of the chapters............................................................................. 7 CHAPTER 2- REVIEW OF LITERATURE ...................................................................... 8 2.1- Introduction ............................................................................................................. 8 2.2- CSR Theories and frameworks .............................................................................. 10 2.3- Stakeholder Theory of Corporate Social Responsibility ....................................... 12 2.4- CSR Instruments .................................................................................................... 14 2.4.1-ISO 26000 ........................................................................................................ 17 2.4.2-GRI Standards.................................................................................................. 18 2.4.3-United Nations Global Compact (UNGC)....................................................... 18 2.5-CSR practices and disclosures in banks ................................................................. 19 2.5.1- International banks ......................................................................................... 21 2.5.2- Local banks ..................................................................................................... 23 2.6- Local Banks‟ exposure .......................................................................................... 25 2.7- Link between CSR and banks‟ exposure ............................................................... 27 2.8- Conclusion ............................................................................................................. 28 CHAPTER 3 - METHODOLOGY ................................................................................... 30 3.1- Introduction ........................................................................................................... 30 3.2- Research methods .................................................................................................. 30 3.3- Research approach ................................................................................................. 31 3.4- Data collection method and tools .......................................................................... 32 3.5- Sample selection .................................................................................................... 33 3.6- Research process.................................................................................................... 33 3.7- Data analysis .......................................................................................................... 34 3.8- Conclusion ............................................................................................................. 34 CHAPTER 4 - FINDINGS ............................................................................................... 35 iii 4.1- Introduction ........................................................................................................... 35 4.2- CSR and Lebanese banks ...................................................................................... 35 4.2.1- Audi bank ....................................................................................................... 35 4.2.2- BLOM Bank ................................................................................................... 41 4.2.3- Byblos Bank ................................................................................................... 46 4.2.4- Fransabank ...................................................................................................... 48 4.2.5- SGBL .............................................................................................................. 51 4.2.6- Bank of Beirut ................................................................................................ 55 4.2.7- Bankmed ......................................................................................................... 58 4.2.8- BLF ................................................................................................................. 62 4.2.9- Credit Libanais ............................................................................................... 66 4.2.10- IBL ................................................................................................................ 69 4.2.11- Lebanese and Gulf Bank (LGB) ................................................................... 71 4.2.12- Credit Bank ................................................................................................... 72 4.2.13- BBAC ........................................................................................................... 74 4.3-Findings according to ISO 26000 ........................................................................... 75 4.4- Conclusion ............................................................................................................. 78 CHAPTER 5- CONCLUSION AND RECOMMENDATIONS ...................................... 79 5.1- Introduction ........................................................................................................... 79 5.2- Summary of Main Findings ................................................................................... 79 5.3- Research Limitations ............................................................................................. 82 5.4- Possible future research ......................................................................................... 83 5.6- Research Implications............................................................................................ 83 References ......................................................................................................................... 85 iv LIST OF FIGURES Figure 1: Different types of CSR and the scale of each one ............................................. 15 Figure 2: Plan- Do Check-Act cycle ................................................................................. 15 Figure 3: Connection between the three frameworks ....................................................... 17 LIST OF TABLES Table 1: The reporting of the CSR banking sector of 13 banks and the application with the principals of ISO 26000 .............................................................................................. 75 v ACKNOWLEDGMENTS I appreciate the support of my thesis supervisor and reader in writing this thesis. They both gave me great ideas for collecting and analyzing various data and information, and helped me to organize this thesis. I also thank my fiancé, my parents and especially my friends Hoda and Mounir Abi Aad for showing faith in me, encouraging and supporting me throughout this journey. vi ABSTRACT Purpose – The purpose of this research is to study the difference between the CSR reporting and the CSR execution in the Lebanese banking sector specially during the current financial crisis and lack of trust between the customers and the banks‟ administration as a whole. Design/methodology/approach – To proceed with this study, we used the quantitative method by extracting data and information for 13 Lebanese banks and calculating the sovereign exposure debt of all these banks separately and comparing them to their disclosed CSR practices. Findings – Our research showed that not all CSR actions are being reported, in addition not all CSR reporting are being executed and we also found that within the sample of 13 banks we studied, only three banks were compliant with the accepted sovereign