Background
Burgan Bank is Kuwait’s second-largest bank by assets and the country’s youngest conventional bank, founded in 1977. The bank serves primarily corporate and financial institutions, although it also has a growing number of retail and private bank customers (Overview About Burgan Bank, 2022, para. 1). Gulf Bank Algeria (AGB) is one of Burgan Bank’s majority-owned subsidiaries in the Middle East and North Africa (MENAT) area, Baghdad Bank in Iraq and Lebanon, Tunis Global Bank in Tunisia, and wholly maintained Burgan Bank in Turkey. As a result, Burgan Bank, Kuwait has participated in numerous financing opportunities in the United Arab Emirates through its commercial agency (“Burgan Financial Services Limited”). Over the years, the bank has maintained careful growth in its major markets, managed franchises by boosting functioning competencies and earnings, focused on sound risk administration across the company, and optimized capital utilization.
Burgan Bank became among the primarily limited banks to deploy the Anti-Financial Corruption Program across its network. Kuwait Projects Company (KIPCO) is a parent company of Burgan Bank, one of the region’s most prestigious financial organizations (Overview About Burgan Bank, 2022, para. 1). By consistently implementing best-in-class performance, invention, and investor care, Burgan Bank aims to become Kuwaiti’s top financial facilities provider through consistent execution (Overview About Burgan Bank, 2022, para. 3). Burgan’s mission is to provide maximum value to the bank’s stakeholders while adhering to good corporate governance and intelligent growth methods (Overview About Burgan Bank, 2022, para. 3). Long-term partnerships, trust, and mutual honesty are at the core mission of Burgan Bank while also offering cutting-edge banking solutions that cater to the diverse needs of customers at every stage of their lives.
Corporate Social Responsibility Strategy
Moral Standards
The company precisely plans for its CSR activities within its ethical standards but has various ethical complexities. The bank, for example, contemplates it must safeguard the group’s worth and the interests of its employees and shareholders (Annual Report 2020 – Burgan Bank, 2022, p. 27). The corporation has an official code of ethics linked to the CEO’s ethical duty clause. Committees are entrusted with ensuring that the bank adheres to the ethical guidelines set out (Alotaibi, Mubarak and Alhammadi, 2020, p. 38). They also have the authority to penalize anyone who breaks the rules of conduct. The business feels honesty results in more customers; other aspects of the ethical declaration include being fair transparent, thinking about society’s interests, environmental conservation, and being attentive to transparency issues. Five categories constitute the employee rules of behavior, including; professional fundamentals, personal account transactions and banking transactions, and the IT Safety Standards of Conduct.
Environmental Stewardship Standards
Burgan Bank guarantees good utilization of resources; it has established the Kuwait Change Initiative to commemorate World Environment Day through this project. World Environment Day is aimed to unite people to develop means of securing the future for their children during its debut. The corporation clarifies that environmental concerns are taken seriously and long-term goals such as issuing reusable bags to public members (Rawan, 2021, p. 60). The company also collects plastic bags disposed of adequately and recycles them at the end of their service (Annual Report 2020 – Burgan Bank, 2022, p. 27). One of the most hazardous products is plastic bags, as they do not decompose and add nutrients to the soil. Community members given disposable bags by Burgan Bank are encouraged to quit using plastics that harm the environment.
Human Resource Stewardship
A brief description of the company’s human resources practices suffices. The corporation places a high value on hiring young people. Its dedication to the next generation is firmly established in its core values and principles. For example, the Summer Training Program is a youth training program offered by the company to help young people learn about the business and financial world; this program started in 2011. Employees enjoy working at Burgan Bank because of the positive work environment (Annual Report 2020 – Burgan Bank, 2022, p. 27). Following the company’s code of conduct, all workers are expected to treat each other with respect. There are strict dress codes and policies about employee relations to ensure that everyone feels at work.
Burgan bank conducts regular audits to guarantee that no illegal actions occur. Audits aid in the detection and prevention of fraud. Internal auditing aids in the prevention of business fraud. Regular reviews of a company’s operations and the implementation of stringent internal control systems aid in detecting and preventing many types of theft and accountancy irregularities. Professionals who provide audit services assist in creating and modifying internal control systems to prevent fraud (Handoyo and Bayunitri, 2021, para. 3). Employees or vendors may be discouraged from cheating the firm if the company has a well-functioning and comprehensive audit system. Audits assist in decreasing the price of capital. Robust audit processes may help firms avoid or eliminate various risks, such as the danger of substantial misrepresentation in financial reports. It also reduces the risks of asset misappropriation, fraud, and poor management due to a lack of or insufficient knowledge of operations. Robust audit processes may help a company decrease different types of risk, including the danger of losing crucial data. Any new business entrepreneur or management company will benefit significantly from this experience.
Community Service
Burgan Bank’s CSR program has attempted to instill Kuwaiti patriotism in community involvement. Since the bank is based in Kuwait, it has made numerous attempts to show its solid connection to its culture. Kuwait is a predominantly Islamic state, and religion plays a significant role in the country’s governance. Religion also plays a vital role in business, as evidenced by many of the ethical principles we’ve discussed derived from religious teachings and practices (Annual Report 2020 – Burgan Bank, 2022, p. 27). The public is asked to plan some of the events and attend the events themselves. Burgan Bank has invested in Kuwait’s national day celebrations. National days are only celebrated in many nations if a company is officially asked to host or participate. The corporation participates in the events to foster Kuwaiti pride and support other associated causes. Gift hampers are given to everyone who attends the company’s events. As a result, the Burgan Bank typically attracts a sizable portion of the general population to its events.
Broader Social Issues
The company’s faith in the future is one of its most essential characteristics; as stated, this is why they devote so much effort to educating young people about the intricacies of business and finance. It also teaches the young people how to start their enterprises with the skills they learn here. According to Pradhan, Kuwait’s unemployment rate is extremely low compared to several other countries (Albassam, 2021, p. 450). For this to be possible, the Burgan Bank provides training and investment in the youth. Furthermore, they safeguard children’s health by ensuring that they receive the finest care possible in the event of an illness. Burgan Bank adheres to Sharia law’s strict regulations (Annual Report 2020 – Burgan Bank, 2022, p. 27). Their employee code of conduct adheres to Sharia Law, and it’s enough to mention. The clothing code is one example of a “professional principles” principle. Employees are expected to adhere to the country’s dress code while maintaining professionalism. As a result, it is customary to see non-Muslim women wearing headscarves in the morning.
Theoretical Framework or Model Employed
Theory of Moral Sentiments
Individuals do not have to weigh morality since it is natural and developed for social beings. This theory argues that people feel happy when others are excited too, and vice versa (Camp, 2020, para. 1). Individuals derive pleasure when others do the activities they require and distress when they do the bad. It Is normal for individuals to take care of themselves since the social aspect of their nature gives a built-in ability to feel compassion for others, a trait described as empathy. Although not as strongly, people feel for others whether they are suffering or happy. Others, likewise, look to them for empathy and an understanding of their plight. This theory is based on sympathy and self-interest, benevolence, justice, and virtue (Brown and Forster, 2013, p. 310). Adam Smith’s concepts on money matters and the Imperceptible Hand have roots in his Philosophy of Moral Opinions, published in 1776.
The qualities of justice and goodwill, according to Adam Smith, are interdependent but distinct. While justice is a value society must defend, it cannot be taught. It is sufficient to recommend it but not required to impose it (beneficence) because it is the adornment rather than the foundation that maintains the tower. Justice is its most crucial pillar instead of being the foundation of the entire structure (Smith and Wilson, 2019, p. 7). Stakeholder partnerships with “perfect rights” are defined as the most critical contractual connections when people have the right to demand and if another party refuses to perform. Contractual duties rather than distributive Justice demands contradict personal and property rights under commutative justice (Brown and Forster, 2013, p. 310). Aside from the fact that perfect rights come with enforceable duties, there are other benefits.
Governments are designed to ensure justice, preventing members of society from encroaching on each other’s property or grabbing what is not theirs. The goal here is to ensure that each person has a safe and secure place to keep their possessions. For justice, preserving men’s perfect rights is the ultimate goal. Encroachments on liberty disrupt perfect rights. Individuals have a right to their property because they produce its value, and anyone who infringes on that right is doing so by stealing the value of that person’s labor.
Critical Evaluation of Burgan Kuwait’s CSR Strategy
The company precisely plans for its CSR activities within its ethical morals. However, Burgan bank has numerous ethical difficulties, a clear indication that it should work on its moral standards since every company is a product of its standards. Moral ideals will help Burgan bank to pave the pathway for its decisions. Without moral values, Burgan lacks the appropriate guidance, and it may fail to achieve its long-term goals. Company ethics and social obligation institute define corporate communal concern as a supervision style restricted by the moral affiliation between a company and its investors and the formation of compatible corporation goals with these values, regarding diversity and endorsing the decrease of social disparities. The company should ensure it works on its moral ethics difficulties and ensure both its employees and stakeholders are well trained on moral ethics.
Burgan imposes standards that are not acceptable, limiting its ability to create value hence ruining its operations. As it stands, Burgan bank, Kuwait, is already incurring ethical complexities with its workers, and its CSR strategy will negatively affect its long-term performance. While its CSR programs can significantly impact the companies, the net effect on Burgan is evident from how its workers behave. Employee productivity suffers when a company’s leaders lack moral character. Some employees are so focused on personal advancement and financial security that they fail to follow company policy and conventions. Workers are more productive and have better morale when they use corporate responsibility as a critical criterion; this boosts morale across the board. Every department benefit when personnel performs their duties honestly and ethically.
Several of today’s CSR mandates are based on popular opinion, but that does not mean they are always the best course of action. Adam’s theory emphasizes self-interest end empathy, whereby people engage in things that make them happy and show empathy to others by helping them stay happy. Still, Burgan works to carry out tasks not precisely in the community’s best interest. The bank, for example, thinks it must safeguard the group’s worth and the interests of its employees and shareholders without acknowledging the interests of its workers and shareholders. In light of this remark, the corporation is faced with several ethical dilemmas. Burgan penalizes individuals who break its rules without interrogating them to know the cause behind their behaviors; the company does not empathize with its workers. The corporation must always act in the best interests of all of its shareholders.
Burgan’s mission is to be a financial partner with solid customer relationships based on trust integrity and innovative banking amenities that comprehend and support client needs. However, the company’s CSR activities do not adhere to its mission. Burgan Bank acknowledges that it must guarantee that the planet’s resources are well-cared. In reality, the corporation launched the Kuwait Change Initiative and did not use resources effectively. It was their goal to commemorate World Environment Day through this project. Even though the company established World Environment Day to bring people together to develop means of securing the future for their children during its debut, the company has failed to provide equal job opportunities.
The corporation clarifies that environmental concerns are taken seriously, and long-term goals but does not involve its workers in its social operations. For example, only the top executives are involved when issuing reusable bags to public members. Rewards have vital social operations, and businesses should engage in activities that generally benefit society. Even though the company collects plastic bags correctly disposed of and recycled at the end of their service, the act never benefits society. The company never involves other society members in the exercise to earn their upkeep. The bank could have possibly allocated other tasks to society members to encourage them to keep their surroundings clean; plastic bags are the most hazardous product in the environment. Not properly disposing of them will keep them in the environment for a long time, as they do not decompose and add nutrients to the soil.
The company offers disposable bags to community members to motivate them to quit using plastics that harm the environment. However, when referring to Adam’s theory of moral sentiments, the action is not morally correct. Even if the members are offered the bags, they still do not have the appropriate skills and morals for using and managing plastic bags. First, the company should consider offering special training and mentorship programs to its workers and society to preserve the environment. The program will give various people the appropriate knowledge they lack, including the importance of keeping the environment clean and the negative impacts of disposing of plastic bags.
Every individual has their rights that other people must respect. However, Burgan does not respect the rights of citizens to receive equal job opportunities; a brief description of the company’s human resources practices serves. Burgan bank places a high value on hiring young people without considering the old. The firm considers giving its job opportunities to the youths without considering the adults who have families to manage, an activity that attracts conflicts between the youths and adults and may also encourage the adult towards stealing from the bank to meet their obligations. For instance, the firm’s Summer Training Program is a youth training program offered to help only young people learn about the business and financial world; this program started in 2011. The older people are never involved in Burgan’s corporate social activities.
Employees enjoy working at Burgan Bank because of the positive work environment but not social benefits. Following the company’s code of conduct, all workers are expected to treat each other with respect. Still, the company lacks appropriate guidelines on justice to the workers harmed by their fellow staff while at work. Although there are strict dress codes and policies about employee relations to ensure that everyone feels at work, the company mostly adheres to the Islamic dressing codes. It does not consider the dressing codes from other religions, which indicates the firm is not the conscience of other religions other than the Islamic.
Although Burgan Bank’s CSR program has attempted to instill Kuwaiti patriotism in community involvement, it does not target all community members but favors the young population. Burgan Bank, Kuwait should instead consider supporting members without considering their age. It ought to contemplate other factors such as the social classes of the individuals they recruit in their programs and how much they need the help. Since the bank is based in Kuwait, it has made numerous attempts to show its solid connection to its culture without educating the people who may not beware of the Islamic culture even though Kuwait is mainly an Islamic region. Even though Kuwait is a predominantly Islamic state, and religion plays a significant role in the country’s governance, Burgan bank should consider forming policies that do not interfere with other people’s beliefs. Instead of the bank involving the public in its social events equally, it requires them to plan and attend the events themselves.
The corporation participates in various events to foster Kuwaiti pride and support other associated causes but does not acknowledge the interest of various individuals. Gift hampers are given to everyone who attends the company’s events, indicating that the company uses rewards to invite those not appealed to their events. As a result, the Burgan Bank typically attracts a sizable portion of the general population to its events. Instead, the company should consider giving rewards that benefit society and the attendants because other members could wish to attend the Burgan Bank, Kuwait programs but get hindered by their health status.
Burgan Bank, Kuwait’s CSR strategy is not benevolence since it does not prompt the society to promote the happiness of other people other than the young. The company does not care about other people’s interests but only devotes more to the activities that will enhance its future. For instance, Burgan Bank focuses on educating young people about the intricacies of business and finance (Burgan.com, 2022). It also teaches the young people how to start their enterprises with the skills they learn here; older people are never involved in its practices. Burgan Bank provides training and investment in the youth. Furthermore, they safeguard children’s health by ensuring that they receive the finest care possible in the event of an illness and never safeguard the health of older people.
Conclusion
Burgan Bank is one of Kuwait’s top financial institutions. Through public interaction, it has gained this famous status. The company’s corporate social responsibility and corporate citizenship programs are credited with public interaction. Sections of the company’s CSR strategy are evident, including human resources, morality, the environment, neighborhood, and society all fall under one umbrella term. The company’s CSR includes all of these factors in some form or another. For example, employees’ conduct is governed by the company’s code of conduct. It has also done its part to protect the neighborhood by embracing its diverse cultural heritage. For its part, HR has spent considerable effort developing policies to ensure that it hires only those who would positively impact society.
A strong empathy pushes people to contain their emotions to be more in line with the rest. In daily life, every person learns both what is acceptable and not permissive; social character informs the sense of morality. Friendship, generosity, and compassion inspire acts of kindness, and the choice of the actor to help others is the source of this goodness. A lack of beneficence does no genuine positive harm because “beneficence is continually free,” he writes. “It cannot be extorted by force, and the simple lack thereof exposes to none.” As a result, beneficence cannot be compelled; instead, it is fueled by the sympathies of the individual. Beneficiaries owe no duty to those they help, and those they help have no right to expect anything in return.
When it comes to the law, justice is concerned with actions that have a “horrible tendency,” which is motivated by “improper motivations” and “deserve punishment; for they alone are approved targets of wrath. The victims of injustice have a right, perhaps a duty, to demand and seek compensation. Even though individuals are self-centered, they must find a way to coexist peacefully with others. To maintain society, this is the bare minimum. People embrace acts of kindness but cannot require them in the same way they want justice; prudence, fairness, and generosity are essential. However, it is ideal if an impartial observer could understand and empathize with others’ feelings and acts. Self-discipline is required, which is the most accurate form of virtue. It is equally essential to Smith to distinguish between perfect and imperfect rights.
Burgan Bank has given back to the community by ensuring the next generation’s well-being. The bank also values cultural sensitivity highly. The bank would not be where it is today if it had not adhered to cultural norms. According to its strategic strategy, it pays close attention to the religious and cultural activities of the Kuwaiti people. They have made similar claims repeatedly, and it is hard to believe that they are not valid. Corporate social responsibility (CSR) benefits significantly from integrating cultural ideas. Because the public sees the corporation as one of their own, they develop a strong sense of loyalty toward it. In addition, the company’s culture and the society’s culture are inseparable. As a result, the organization has maintained a level of comfort with its customers. The relevance of the company’s culture is stressed to new workers during their on-the-job training.
Recommendation
Burgan Bank should consider allocating its job opportunities equally and including both the young and older people in their programs as an act of sympathy, benevolence, and respect for people’s interests. There should be a broad spectrum of enterprises, governments, and citizens involved in CSR programs that adhere to norms defined by civil society. Measurement and reporting mechanisms should be in place to support these recommendations. Burgan should present business activities to show their economic, social, and environmental impact on the community and the world. Kuwait’s policy should be based on a solid business case so that enterprises can easily justify CSR implementation by making it economically viable. An incentive mechanism may be essential to stimulate organizations to develop creative solutions that fit their specific needs.
Reference List
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