Corporate social responsibility: An exploratory study of the quality and extent of social disclosures by Lebanese commercial banks

The purpose of this paper is to attempt to identify the type and quality of social information disclosed by Lebanese commercial banks and to report on the extent of these disclosures and their relationship with size, financial performance, and other chosen variables.

Deductive in nature, this paper uses content analysis of annual report social disclosures of 24 Lebanese commercial banks to test six hypotheses related to the nature of social disclosures and their association with selected variables.

The findings provide evidence of the widespread use of this phenomenon by these banks as a means to communicate with their stakeholders. Moreover, results reveal that these banks attribute a greater importance to human resource and product and customers disclosures, whereas the availability and extent of environmental disclosure is still weak. In addition, a strong association is found between these disclosures and size and financial performance variables, whereas the relationship with the bank age is found to be a weak one. Finally, findings suggest no difference in social disclosure behavior between listed banks and banks with an overseas presence, and non‐listed banks and those operating only in Lebanon.

Further longitudinal and causal analyzes would shed more light on the importance and determinants of this phenomenon in small and developing economies. One obstacle to overcome in this endeavor is the non‐availability of social and environmental databases similar to the ones used by researchers in developed countries. On the research front, this paper adds to the relatively small number of studies addressing issues related to corporate social disclosure practices by banks.

At the practical level, the paper attempts to inform corporate social responsibility (CSR) policies and practices of Lebanese banks which would result in more socially and ethically oriented banking activities in Lebanon.

Studies of CSR have generally been conducted in relatively large economies with active financial and stock markets. This paper tests and applies relevant accounting theories to a developing small economy and shows that even small family‐owned banks with high public visibility can exhibit strong social and ethical awareness.