CSR Disclosure by Asia-Pacific Banks: Evidence from Comparative Assessment against India's Compulsory CSR Law

26 Pages Posted: 28 Jun 2017 Last revised: 21 Jul 2017

See all articles by Ameeta Jain

Ameeta Jain

Deakin University - Faculty of Business and Law

Sandeep Gopalan

University of Maryland Eastern Shore - School of Business and Technology

Date Written: June 1, 2017

Abstract

India’s new corporations law (2013) introduced a unique provision mandating CSR spending. This paper evaluates the before and after effects of CSR spending in four major Indian banks from 2005 to 2015. It is compared with four major banks from Japan, Australia, and China. We designed a legal index and analysed the content of CSR disclosures. The research demonstrates that countries with a higher legal index had consistently higher CSR disclosure index scores and actual CSR activity reported in detail. This research also finds that based on company reporting media, there is marginal change in CSR spending in Indian banks and minimal improvement in the reporting quality following change in legislation in 2013. Our findings reveal a small but significant legalisation in the disclosure content following the enactment of section 135. However, poor drafting and poor institutional context revealed by India’s low legal index score shows high levels of auto-interpretation and creative compliance. The section in its current form is failing to promote ethically responsible behaviour and not generating an ethical obligation to obey the law in spirit. These findings are of value to policy makers – to reform the law, to socialise corporations and CEOs, to design enforcement mechanisms, and generate ethical behaviour.

Suggested Citation

Jain, Ameeta and Gopalan, Sandeep, CSR Disclosure by Asia-Pacific Banks: Evidence from Comparative Assessment against India's Compulsory CSR Law (June 1, 2017). Deakin Law School Research Paper No. 17-09, Available at SSRN: https://ssrn.com/abstract=2993772 or http://dx.doi.org/10.2139/ssrn.2993772

Ameeta Jain

Deakin University - Faculty of Business and Law ( email )

Burwood, Victoria 3215
Australia

Sandeep Gopalan (Contact Author)

University of Maryland Eastern Shore - School of Business and Technology ( email )

2105 Kiah Hall
Princess Anne, MD 21853
United States

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