Corporate Social Responsibility, Problems, Behaviour, and Change in Financial Firms

Abstract

The research question is How can financial firms become corporate socially responsible (CSR)? Changes in financial firms and financial markets to become CSR oriented are being driven by global physical changes, intensive world-wide political and institutional pressures, and increasingly critical and demanding employees, customers, and civil society stakeholders (Dashwood, 2020).The change pressures combine with problematic internal firm predispositions (in knowledge, values, beliefs, organisation, behaviour etc) to exacerbate barriers to change and contribute to CSR problems, both historic and emerging.Empirical research into CSR problems in financial firms, and the wider debate about CSR change, reveals four themes. These are portrayed as four metaphors (Morgan, 1997) concerning: 'Head' (top teams), 'House' (socio-technical system), 'Community' (lived experience of employees, customers, and stakeholders), and decision making in a financial 'Machine'. These elements form a connected, interacting, changing system reflecting Hirshleifer's (2015) argument that there is a need to move from behavioural finance to social finance. CSR problems and demands for CSR change arise in each metaphor area and predispositions, and their dynamic interactions in firms and externally. These contribute to problems of CSR communication and reporting. This CSR empirical change narrative and metaphor elements are interpreted using literature and theory relevant to the whole system and each metaphor. This interdisciplinary analysis (de Bakker et al, 2019) is used to develop an equivalent theoretical narrative. The combined narratives form a CSR oriented 'Behavioural theory of the financial firm' (CSR BTTF).This conceptual framework is used to explore CSR problems in financial firms. It is means to think how to -manage and research CSR change problems and become fully CSR oriented. This knowledge strategy (Zack, 1999), by closing knowledge and value gaps within the firm and externally, in both practice and academic domains, directly addresses issues of uncertainty and complexity arising from CSR change. It is part of the evolving means to realign value in financial markets with values of wider society (Carney, 2020).The enhanced empirical and theory understanding in the CSR BTFF supports development of an academic research programme about 'CSR Finance' using a range of non-finance academic disciplines. The CSR BTFF is also a basis to develop firm-wide hypotheses for empirical tests in CSR finance (Poterba, 2021) and test for 'CSRwash' (Pope et al, 2016). It can encourage a rethink of research and theory development in finance (Gendron, & Smith-Lacroix, 2013Holland, 2019a. It contributes to developing holistic and integrated CSR communication and reporting. Thus, this holistic narrative and metaphor approach is a means to answer the question, 'What is going on here?' and to be able to 'stand back' and comprehend the bigger picture and central strategic issues when responding to uncertainty (p10, p528, Kay and King, 2020). The four-part ...

Change in Financial Firms and Avoiding Harm to People and Environment

“…Section A Behavioral Theory of the Financial Firm (BTFF) briefly outlines how financial firms can become net zero oriented and corporate socially responsible (CSR) in a systemic way. This involves using a conceptual framework or "Behavioral theory of the financial firm" (BTFF) (Holland, 2019a(Holland, ,b,c, 2021(Holland, , 2022 where the firm is portrayed as connected empirical themes or metaphors (Morgan, 1997) of "Head, " "House, " "Community, " and financial "Machine." These are interpreted in an interdisciplinary frame (de Bakker et al, 2019).…”