Studying the Effect of Stakeholders on the Disclosure of Corporate Social Responsibility by Banks: Evidence from Egypt

Stakeholders have become more attentive to community and social information worldwide. However, their influence on the CSR disclosure is highly contextual and contingent upon several institutional factors. Therefore, this study pursues to identify the stakeholders’ group which has the most powerful effect on the CSR disclosure. The researchers examined the CSR disclosure provided by 38 banks operating in Egypt for the year 2015. Two main indices have been developed; one measures the extent of the CSR disclosure and denoted as as the CSR quantitative index. The other measures the qualitative aspects and denoted as the CSR qualitative index. In addition, five sub-indices have been developed to measure the CSR disclosure as recommened by the GRI. The relationship between these two main indices and the sub-indices and the seven groups of stakeholders have been examined using the OLS regression models. The non-parametric tests are also used to enhance the robustness of our findings and to identify the differences between the stakeholders for each index. Concerning the stakeholder effect, the Egyptian Stock exchange, audit committee and big audit firms are found to have the most powerful impact in our case. On contrary, independent directors, bank’s clients and bank specialty show insignificant results. Generally, the quality and extent of CSR disclosure by the banking sector still undeveloped, particularly for the national banks. Accordingly, the Egyptian Stock Exchange and the Central bank of Egypt need to issue vigorous guidelines and regulations to raise harmonization in the CSR disclosure and to empower their supervisory role in this respect.