Corporate Social Responsibility: Barclays Bank
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The term ‘Corporate Social Responsibility’ also known as CSR, Corporate Conscience, or Corporate Citizenship is defined as, a way in which an organization takes to check its own operation and advocate for the compliance of the law, the set-down ethical principles and the widely accepted codes of behavior(McDonald, 2008).The main aim of corporate social responsibility narrows down to an organization’s ability and willingness in being accountable on its impacts of action towards the environment, its own employees, the communities surrounding its area of operation, the stakeholders, the Government, the supplier of its raw material and most importantly the customers of its products and services.
It’s argued that when an organization greatly involves itself in corporate social responsibility, its acting towards promoting (in good faith) growth and development. Corporate social responsibility would therefore be taken to mean, the intentional inclusion of public concern into organizations decision making moves.
Corporate social responsibility is always established to assist an organization’s mission as well as the extent to which the said organization would maintain and care for its customers and those around them. In addition to this, an organization that chooses to engage itself in corporate social responsibility tries to be in good terms with its immediate surrounding environment. This move helps in bringing about continuity of the organization operations as a whole.
Background Information of Barclays Bank
Barclays bank depicts a better example of an international firm that provides banking and many other forms of financial services to its worldwide customers. The company’s headquarters is located in London where it has its origins. According to Mcdonald (2008), Barclays bank was ranked as the 10th largest banking and financial service firm. The organization also got the title ‘21st Largest Company’. The organization has its operations in more than 50 countries in the world, that is, in Asia, Africa, Europe, North America and South America. Its customer base ranges between 40 million and 50 million customers.
The company’s financial report further reveals that Barclays bank had a total of €1.945trillion. Barclays bank has been commonly referred as a ‘Global Bank’. Its structure is made up of three business clusters namely: the Executive, the Board and the Governance. The Governance comprises of: Board Remuneration Committee, Board Audit Committee, Board Risk Committee and Board Citizenship Committee.
The board comprises of: the Chairman, the Chief Executive, Barclays PLC, Group Finance Director, Non-Executive Director, and the Senior Independent Director.
The Executive comprises of: Chief Executive, Group Finance Director, Chief Risk Officer, Group General Counsel, Chief Executive II, Retail and Business Banking, Chief Executive of Barclays Wealth, Co-Chief Executive of Barclays Capital and Co-Chief Executive of Corporate & Investment Banking, Group Chief Executive, Absa, Co-Chief Executive of Barclays Capital and Co-Chief Executive of Corporate & Investment Banking and Group Human Resources Director. Barclays bank has its stock of shares listed in London Stock of exchange and has an FTSE of about 101 indexes in the stock market. The stocks are also listed in other leading stock markets like the New York Stock Exchange (McDonald, 2008).
The list of Barclay’s products and services varies greatly but can be classified into: Personal and premier banking, Corporate and business banking, Investment banking and Wealth management.
The products offered under personal and premier banking include: UK Online-Banking, UK Personal Banking, UK Premier Banking and Barclay card.
Under Investment banking the product offered is mainly Barclay Capital while in Wealth Management the following products are offered: Barclays Wealth, Offshore banking and investments, Banking services for expats and Services for clients moving to or working in the UK.
The UK Online Banking refers to a service offered by the bank to facilitate online transfer of money within members in the United Kingdom. UK personal banking refers to a service by the bank that offers customized individual service which proves more efficient with business owners. Barclay card refers to a card that can be used as both a credit or a debit card.
The product: Barclay capital is meant to provide large organizations, Government and institutionalized customers a great extent of solutions to their planned recommendations, financing and risk management needs.
Barclay’s wealth refers to a service offered by Barclays bank to the wealthy and those aspiring to be wealthy by providing international exposure and other forms of expertise in private wealth management, financial planning and private banking.
Under offshore banking and investments, Barclays bank, assists clients in securing their money outside their country of residence or assisting those that have moved to the UK from abroad or in a situation where the client is a UK resident living overseas . In order to provide services to clients living in The UK, Barclays bank provides a service named’ Banking services for expats and Services for clients moving to or working in the UK.’ this assists client in getting mortgage for UK property, helps in relocation and banking abroad and also plays a major role in helping clients living abroad with financial planning.
The final product under Barclay’s wealth management refers to banking services offered to non-residents individuals living and working in UK. The bank assists them by allowing the opening of a non-resident account which they can use to deposit money in whichever currencies.
The different corporate social responsibilities practiced by Barclays bank include among others
The Responsibility towards the Customers:
Barclays bank in its move to promote corporate social responsibility has involved itself in gaining trust form its customers by making sure that they are: satisfied with the kind of products and services that they offer. The responsibility of allowing a greater number of customers’ access basic banking accounts was realized in 2002 when a survey conducted implicated an increase of about 120,000 customers that had been accommodated in this service. Questionnaires have been the method mostly used to determine the level of customers’ satisfaction. The bank has also made sure that customers have always gotten value for their money. In 2002, Barclays bank foresaw the research carried to determine the level of customers’ priorities inclusion. Another Corporate responsibility that Barclays puts into practice, in order to depict its commitment to serve its clients, involves product research and development.
In product research and development, Barclays bank has successfully deployed and formulated a functional Research and Development Department that oversee researches that are being conducted. Research and development by the bank greatly takes into consideration the need to improve on its products so as to suit the ever changing customer’s demand. For example, in 2003, Barclays bank came up with online banking which had gained fame allover the world. The customer’s need to involve himself in this kind of banking, forced Barclays bank to upgrade its services in a more advanced way-it deployed technological aspect so as to reach its clients all over the world. Barclay s bank also did note that, in order to involve client’s views in its operations it had to formulate a department that fully concentrated its operation to listen and fulfill the clients need.
Responsibility towards its Employees:
Barclays bank noted that in order to provide for corporate social responsibility to it external influence, then it had to first take care of its employees. The employees had to be motivated and encouraged to participate on the same. After an intense research, Barclays found out that its employees performed well under favorable environmental conditions. For motivation and encouragement the bank had to involve its employees at different levels in making decisions that could affect the performance positively. The bank provided its Employees with a favorable working environment. All branches of Barclays have been noted to include a safe environment with great ambience to its employees so that they in turn could reciprocate with quality working. Barclays bank has also allowed its employees to form unions that always strive to mediate between the executive and the employees. The unions formed helps in bringing employees together and in the long run the employees got to have their complaints heard.
The bank took the responsibility to offer its employees an attractive package. This move got employees feel satisfied and offered their services well. This move was meant to enable employees live a standard way of life and a life by which they could be indentified with. Barclays bank decided to include additional benefits to its employees by way of providing for medical and housing benefits. The organization made houses for its employees so that they could get access to quality and affordable mode of housing. Medical expenses were also part of the move in that the bank provided for a medical cover for its employees and their immediate families. According to Barclays Annual Report 2002, the Bank expanded their support for their employees in Africa with HIV/AIDS. Employees in Botswana and Zambia are now with offered free, voluntary and confidential HIV/AIDS testing.
Barclays bank allows employees to advance their training and even provides other forms of training to its employees. The company organizes workshops and training –outs for its employees so that they remain relevant to the market. Around £42 million (2001: £57 million) was spent on training and development in 2002(McDonald, 2008). Welfare needs of the employees also form part of the company corporate social responsibility, the organization allows for leaves to expectant employees and goes ahead to pay them even when out of work. Other employees have access to annual leaves so that they could have a chance to clear their mind before embarking to work again.
Responsibility towards the Governments
Barclays bank operates in more than fifty countries all over the world. These countries have different laid-down legislations under which businesses operates. Some legislation is viewed as harsh while others are termed favorable. Barclays bank has always strived to operate under the rules and regulations. In any country that the Bank wishes to establish a branch, rules and regulation that govern the setting and incorporation of business is always followed. The Bank always obtains a certificate of operation before commencing with business. The Bank has also made sure that the organization is registered with the registrar of companies and therefore permission to commence with business is granted. After completion its establishments, the Bank also takes the responsibility of submitting taxes in time to the different Government environments in which they operate in. Sometimes, Barclays bank assists in funding projects in.
Responsibility towards the Community
Barclays bank has greatly involved itself in community initiatives. The organization has observed that for it to remain relevant and acquire a longer operation period in any environment it carries its activity then it has to befriend the entire community as a whole. Barclays bank has involved itself in helping the communities living around them by way of providing social amenities to the society. Schools, health centers and Water boreholes have been constructed for the community using Barclays funding. This activity has been widely noticed in Africa and Pakistan whereby Barclays has been able to offer assistance to the needy communities.
Barclays bank sponsorship program was started some thirty years ago to assist the bright but needy students in pursuing their education up to University level. In Africa for example, Barclays has been in the forefront advocating for the need to educate African children. The bank has established a foundation that caters for the need of education. The bank invests about €10M in creating awareness
Barclays bank has also offered donations to affected regions of the world. The donations are made in form of money so that the money is used to purchase food and medical supplies for the affected communities. According to Barclays Annual Report 2011, in 2011, Barclays Bank of Kenya donated Ksh.40M. to Red Cross so that it could purchase food and medical supplies to affected regions of Somalia and Kenya (McDonald, 2008).
Barclays bank move to condemn environmental pollution is perceived as one of its efforts to maintain and showcase its corporate social responsibility towards the society as a whole. The Bank has also involved itself in other community based activities like planting of trees and providing funds for tree nurseries all over the world. Barclays Bank supports and Sponsors: Barclays Premier League.
Responsibility towards the Stakeholders
The objective of any business organization is to maximize profits, minimize losses and create more wealth for its stakeholders. Since its formation, Barclays bank has increased in size and structure and many times it has offered its shares to the public so as to increase its capital base. The more the numbers of shares offered to the public the more the number of stakeholders. Stakeholders always form the important resource to any business environment because they are the owners of the organization; therefore the organization is expected to account for any decision made and the repercussion behind it.
Barclays bank has been greatly involved in expanding its business base so that in essence more profits are accumulated. More profits means a larger percentage part of it is offered to the stakeholders. It’s been therefore the organization responsibility to honestly reward its stakeholders with encouraging dividends. The organization has also the corporate responsibility of involving the stakeholders in major decisions it’s intending to make. This move facilitates the smooth relationship between the management and the stakeholders.
Another corporate social responsibility that Barclays bank has engaged itself in is the organization of Annual General Meetings (AGM) for which they use to initiate and encourage the rapport between these two sides. The major stakeholders meet in London once per every year to discuss on the organization way forward. The organization has always been in time providing relevant audit reports to the stakeholders. This responsibility reflects the accountability that the company has over the years achieved.
Responsibility towards the General Public
Barclays bank incorporated the responsibility towards the public in large when it discovered that the public indeed needed to be involved in any activity of the organization. Barclays bank decided that this corporate responsibility was indeed crucial to both the public and to its own image maintenance. The bank decided to always present its financial statements to the public through the media and also took the hard step of introducing its board of members to the public. It’s noted that the general public needs this information to aid them in making investment decisions to the company (McDonald, 2008).
The stakeholders are not always involved in day to day running of the organization but they do form a crucial lot in decision making especially in decisions that involve expansion. As much as corporate social responsibility is concerned, stakeholders have not been opposing the move by the Bank to engage in it. They have been made to understand that it’s through CSR that the business is able to commence with its operations. Some corporate social responsibility like donations offered by Barclays has lessened the burden of taxation since most Governments have jointly agreed to include charity donations as a tax expense. Less tax paid to the Governments means that the Bank records high profits which in turn translates to huge dividends.
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