impact of firm attributes and board characteristics on corporate social responsibility of listed Insurance Firms in Nigeria
| Format: Ms Word | 1-5 Chapters | Table of Content|
INSTANT PROJECT MATERIAL DOWNLOAD
Study Level: BTech, BSc, BEng, BA, HND, ND or NCE
Amount: ₦4,000.00
CHAPTER ONE INTRODUCTION
Background to theStudy
Corporate Social Responsibility (CSR) has been one of the contemporary issues that are gathering momentum in both developed and emerging countries around the world. Empirical works revealed that CSR has received considerable attention and undergone a remarkable growth particularly in developed nations. In recent time the global competitive business environment has created additional challenges for businesses due to growing global public awareness concerning the role of corporations in society. As the global economy becomes more integrated, firms are increasingly facing more and more public pressure, and demanding increased participation in CSR activities. CSR has therefore become recognized by business organizations globally as a key to business success and a weapon to survive in the global competitive business environment.
Empirical evidence shows that, over the years, firms have identified the economic relevance of CSR practice and made it part of their corporate agenda due to the enormous and sustainable benefits it entailed and advantages it accrued to them. Their experience was in line with global empirical evidence; that CSR has significant positive impact on a firm’s performance. CSR has suggested the social, ethical and legal inclusion of stakeholders in corporate decision making and their treatment in a more ethically, socially and responsible ways. CSR issue has received more of global business and academic attention compared to other contemporary issues. Hence, it has become a growing body of knowledge in recent time.
CSR simply means a construct that suggested the formal extension of company’s responsibilities to diverse stakeholders‟ groups, their formal inclusion in the corporate decision making process, and their treatment in a more ethical and social ways, in addition to the conventional economic responsibilities owed to its primary stakeholders (shareholders).
The concept has been a growing field of interest by sociologies, economists and accountants since the 70s. The accounting struggle was to ensure that all social costs are adequately identified, measured and disclosed in the corporate periodic financial reports. Stakeholders are challenging firms to account for the level of their involvement in CSR (Tsoutsoura2014). CSR issue has therefore maintained its momentum continuously not only in developed economies but also in developing and underdevelopedones.
Firm attributes and board characteristics such as Profitability, Size, Liquidity, Independent Directors and Female Directors of a firm are often considered as key characteristics that influence firm CSR investment, disclosure and practice in many previous studies. Generally speaking, for firms‟ decisions to conveniently respond to any internal or external investments, they must commence with their ability to make profits either huge or low. Therefore, it is rational to consider the level of profitability as one of the most important attributes that may influence firms‟ CSR decisions. All other things being equal, a firm with relatively higher profits figure may tend to invest out a significant portion of its profits inCSR.
Similarly, the size of the reporting firm should have either a significant positive or negative impact on the extent to which it engages CSR practice and disclosure. Thus, it is expected that a large firm management would like to practice and disclose more of its CSR issue because it correlates with their internal and external activities and is a source of good news and a wellspring of innovation, competitive advantage, value creation and superior economic performance. Based on this, Abu Sufian (2016) stated in his work that, over the past few decades, there has been quantum of arguments, controversies and debates in the literature as to whether any increase or decrease in a firm’s total assets can directly translate into its CSR involvement.
Liquidity on the other hand explains the strength of a firm to meet its financial obligations in a timely and effective manner. Samad (2014) posited that liquidity is seen as blood or breath in the life of a commercial bank and that the level of Firms engagement in CSR and other related activities is determined to a greater extent by the Firms‟ liquidity position. Firm financial stability is usually influenced by its profitability-liquidity nexus. This means that decrease in liquidity is associated with an increase in profitability and any increase in profitability leads to an increase in CSR (Mabwe& Robert, 2020). Since low liquidity means larger investment in assets and total deposit are tied to loans, then under normal circumstances Firms and other organizations‟ CSR involvement will depend heavily on their liquidityposition.
Reasons were advanced by several researchers that corporate board members particularly the independent directors used to show much concern that focused more on social actions as remedial response to external environment shock Kassinis&Vafeas, 2016. This enabled directors on corporate board to play an important role in developing appropriate economic and social strategic measures that are helpful to the organization they govern and use such measures in formulating public policy which leads the organization in gaining favorable reputation among its stakeholders (Keim&Baysinger, 2018). Thus, decisions taken by most firms to embark on CSR activities must have direct bearing with their independent director objectivity. Therefore, firms that operate with reasonable proportion of independent directors‟ representation may findit less cumbersome to respond to various economic and social matters affecting theiroperations.
It is however argued that firms‟ decision to engage in corporate social responsibility practices may also be influenced by female directors‟ representation in the corporate governing board. Various scholars have advanced several reasons in the literature regarding the association between board gender equality,firm CSR engagement and female directors‟social activities
interest inconglomeration of the functions or roles they play in the board. Therefore, it is expected that firms having large proportion of women directors on their board will tend to spend much in CSR more particularly in the aspect of employee’s welfare, charitable gifts, donations to orphanages and the overall community developmental efforts due to their inherent and philanthropic attitudes.
Jastram (2017) and Baker (2018) conceive CSR to be part of corporate objectives of an organization because it may be seen as a key indicator to determine the true worth and value of modern organizations through their ability to give back to the society part of their income through mutually beneficial initiatives. But this can only be possible and effective when a firm is able to file a consistent positive growth in many sensitive aspects of its operation. Moreover, notable researchers like Waddock & Graves (2017) and Campbell (2017) proposed that, since firms that are less profitable with relatively poor assets size and unable to optimized their liquidity position would have fewer resources to spare for socially responsible activities compare to those firms that are more profitable with larger assets size and operate in an appropriate liquidity level, then many firms will be less likely to act in more socially responsible ways where they are unable to record consistent positive changes in their keyattributes.
In Nigeria, the Insurance sector has been among the key leading sectors in the movement toward championing Corporate Social Responsibility (CSR). Firms have since attached a greater prominence to their social and environmental impact and they engage in establishing good partnership with local communities than they were used to in the past. This shift is being facilitated by among other things, the remarkable growth and development in corporate codes of conduct, the communities / environmental pressure and the need for effective social / environmental responsibility reporting (Amole, Adebiyi &Awolaja,2016).
The debate surrounding the effective CSR initiatives has of recently been increasingly been questioned in almost every sector globally. However, there exists empirical evidence which show that Firms being the key sector that control significant portion of the global economy are not left out to the challenge. They are equally facing more pressure from the multiple stakeholders demanding their increase participation in CSR and its integration into their strategic business plans.
USE THIS MATERIALS AS A GUIDE FOR YOUR PERSONAL RESEARCH WORK (IF PROPERLY CITED)
PAY ₦3,000 HERE TO DOWNLOAD MATERIALS
Account Number: 0709546102
Access Bank: Savings
Account Name: Emmanuel Idorenyin Samuel.