Corporate governance and corporate social responsibilities in developing countries : the case of Lebanon

Abstract

Following the financial accounting scandals and discontent over stock market losses in recent years, improved corporate governance practices have become critical to protect investors and to stabilize and strengthen capital markets. At the same time, companies are increasingly worried about the impact of their business activities on society. Thus, many have created corporate social responsibility (CSR) programs that aim at balancing their operations with the concerns of external and internal stakeholders such as employees, customers, unions, local communities and governments. Thus, both CG and CSR are assumed to express firms’ moral responsibilities and fiduciary toward stakeholders. Besides, if applied from a strategic perspective, they are both believed to confer great synergy effects on firms’ performances. This research project builds on the work performed by Jamali, Safieddine and Rabbath (2008) but takes the Lebanese banking sector as a case study. In fact, many advances regarding Corporate Governance, CSR and the relationship between these two paradigms have taken place since then, on a global and local level. This paper sheds the light on the new studies and local requirements pertaining to these concepts and presents the findings in a case study format with regards to the perspectives of banks as well as banking authorities. The results mainly reveal that the relationship between CG and CSR seems to be mostly characterized by CG being a necessary foundation for CSR.