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The type and quantity of corporate social disclosures of German ‘Universal’ banks

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Abstract

Grounded in legitimacy theory and deductive in nature, this paper uses content analysis of annual report social disclosures of 169 German ‘universal’ banks belonging to three different categories (credit, saving, and cooperative) to report on the type and quantity of social disclosure by these banks, and to test seven hypotheses related to the nature of their social disclosures and their association with size, financial performance, corporate form, and other selected variables. The findings provide evidence of the importance of social disclosure for the German banking sector as a means to legitimize their business and relay to the society the extent of their fulfillment of social obligations. Greater importance is attributed to product and customers as well as human resource disclosures. In addition, a strong positive association is found between these disclosures and the size variables as well as the number of apprentices, whereas ROE and net profits as financial performance proxies provide evidence of a significant relationship. Furthermore, the findings indicate that the quantity of social disclosure varies with bank category, corporate form and listing status, but seems to be almost unrelated to bank age and overseas presence. These promising findings could be used to inform corporate social responsibility policies and practices of German banks; nevertheless, further longitudinal analysis to validate them over time is warranted.

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Authors and Affiliations

  1. Faculty of Business Administration and Economics, Notre Dame University – Louaize, Zouk Mosbeh, Lebanon

    Elie Menassa

  2. International Center, Worms University of Applied Sciences, Erenburgerstraße 19, 67549, Worms, Germany

    Martina Brodhäcker

Authors
  1. Elie Menassa
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  2. Martina Brodhäcker
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Correspondence to Elie Menassa.

Appendices

Appendix 1: Categories of social disclosure (based on Menassa 2010 and Branco and Rodrigues 2008; slightly adapted to the German case)

  1. 1.

    Environmental disclosure (environmental policies; environmental management system; lending policies concerning environmental and ethical issues; conservation of energy and natural resources; and sustainability).

  2. 2.

    Human resource disclosure (employee morale; training and development; employee profile; employee share purchase scheme; health and safety; industry relation; employee remuneration; equal opportunity; job creation; and employee assistance benefits).

  3. 3.

    Product and consumer disclosure (product quality; customer relations; service for disabled, aged, and difficult to reach customers).

  4. 4.

    Community involvement disclosure (support for public health; charity donations and activity and NGO support; support of regional economic advancement; sponsorship; support of cultural events; support of education; support of sports events; general support of community).

Appendix 2

See Table 10.

Table 10 Skewness and Kurtosis coefficients before and after transformation
Full size table

Appendix 3

See Table 11.

Table 11 Location of social disclosure
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Appendix 4

See Table 12.

Table 12 Results of the stepwise multivariate regression per bank category
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Appendix 5

See Table 13.

Table 13 Correlations (Spearman’s Rho) between quantity of CSD per type of disclosure and size, financial performance, and apprenticeship variables (untransformed data)
Full size table

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Menassa, E., Brodhäcker, M. The type and quantity of corporate social disclosures of German ‘Universal’ banks. J Manag Gov 21, 119–143 (2017). https://doi.org/10.1007/s10997-015-9336-y

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