Corporate Social Responsibility in Commercial Banks: The Case of Albania

Abstract

Increasing of corporate responsibility among private banks, operating in the secondary banking system of Albania has become one of the main topics of discussion in public as well as in the institutional debate. Considering the fact that corporate responsibility is judged as one the key factors for making effective financial decisions, such tool can be also considered as the backbone of an effective decision making process of the commercial banks operating in Albania. Furthermore, the rapid changes in the everyday environment, technology development, product innovations and sophistications, high competition as well regulation and globalization of financial markets have transformed the necessity of corporate responsibility to a more than vital factor to survive in “the wild” financial world. In additional to that, the new era of extremely volatile financial markets, increasing job uncertainty, rising debt etc., summed up in what is widely called “financial crisis”, the business has a low trust ratings in public perception. There is an increasing expectation that companies will be more open, more accountable and be prepared to report publicly on their performance in social and environmental arenas. Banks, which are often referred as “trust institutions”, must invest in creating a synergy of ethics, a cohesive society and a sustainable economy where markets, labor and communities are able to function well together. This paper main objective is the analysis and evaluation of the level of corporate responsibility developed in the Albanian banking system. A detailed analysis shall be carried out over the corporate responsibility policy followed by the main banks operating in our banking system. The analysis will try to assess the level of corporate responsibility as integral part of the overall corporate governance through different issues included in it. Conclusions and recommendations are presented considering not only the analysis assessment, but also the specific quantitative and qualitative factors of Albanian citizen’s behavior, history and culture. Proposals on possible tools to be implemented or strategies to be followed are presented, aiming to help modestly the bank’s policymakers in enhancing corporate responsibility among Albanian banking system in particular and Albanian economy in general.