SSOCIALOCIAL R RESPONSIBILITYESPONSIBILITY & & EETHICSTHICS

A case study onA case study on

BRAC Bank Ltd.BRAC Bank Ltd.

EAST-WEST UNIVERSITYSummer 2008

Assignment No – 1

TITLE: Social Responsibility &Ethics: A Case Study on BRAC BANK

PREPARED BY -

WRITU SEN 2008-2-10-106

NUSRAT JAHAN

2008-2-10-107

SUJAN CHANDRA SARKER

2008-2-10-202

MD. YOUSUF MOZOMDER 2008-2-10-138

F AIZA TASKEEN ORIN 2008-2-40-003

For partial fulfillment of the course BUS 101

FOR

MOHAMMAD ANISUR RAHMAN

Senior Lecturer

Department of Business Administration

Faculty of Business & Economics

East West University

DATE: 24-06-2008

Table of COntentTitle Page

Executive Summary

Introduction Social responsibility Ethics

Methodology Book Website

Literature Review social responsibility areas of social responsibility business ethics

Findings a brief profile of company social responsibility discharged by the company approach of social responsibility

Conclusion and Recommendation

Reference

Executive Summary

It is a unique opportunity to make an assignment on “Social Responsibility & Ethics: A Case Study on BRAC Bank Limited. BRAC works with people whose lives are dominated by extreme poverty, illiteracy, disease and other handicaps.

BRAC Bank Limited has established with the spirit and ideas of BRAC to make profit and social responsibility go hand in hand as it strives towards a poverty free enlightened Bangladesh.

In preparation of making this assignment, we have gathered information from the various reports, books and in-depth memory about the BRAC Bank and its programs on social responsibility.

In findings, BRAC bank is to building a profitable and socially responsible financial institution focused on marketing and business with growth potential, thereby assisting BRAC and stakeholders build a just enlightened, healthy, democratic and poverty free Bangladesh.

BRAC Bank is maintaining the best practices of corporate governance and the highest ethical standards with the formulation of the Bank’s policies and procedures.

Overall activities of the business are conducting responsibly and with focus on long-term value creation. We are confident that with the support of all related logistics, BRAC Bank will grow from strength to strength in future.

INTRODUCTIONSocial Responsibility:Business firms conduct activities to produce goods and services and to generate profit. These activities greatly affect our society to develop awareness. Social responsibility is the deliberate effort of a firm to increase its positive impact on society while reducing its negative impact. The awareness is that business activities have an impact on society and the consideration of that impact by firms in decision making.Business activities have an impact on consumers, employees, the environment, and those investing in the firms. Socially responsible looks more closely at each of these concerns.

Ethics:The business ethics is not so much to teach the difference between right and wrong as to give people the tools for dealing with moral complexity, tools that they can use to identify and think through the moral implications of decisions.Ethics are principals of behavior that distinguish between right and wrong.Business ethics is the evaluation of business activities and behavior as right or wrong.A code of ethics is a statement spelling out exactly what an organization considers ethical behavior.

METHODOLOGY1. BOOKBUSINESS for the 21st centuryWRITTER- SKINNER IVANCEVICH

2. WEBSITEwww.bracbank .com

LITERATURE REVIEWSocial Responsibility:Social responsibility is the deliberate effort of a firm to increase its positive impact on society while reducing its negative impact. In light of many publicized instance of corruption and illegal behavior, the public, special interest groups, and consumers are making increasing demands that business firms demonstrate social responsibility.

Business activities have an impact on consumers, employees, the environment, and those investing in the firms. Socially responsible looks more closely at each of these concerns.

The awareness is that business activities have an impact on society and the consideration of that impact by firms in decision making. [SKINNER, 1992]

AREAS of SOCIAL RESPONSIBILITY

STAKEHOLDERS

1. Consumers2. Employees3. Investors

THE NATURAL ENVIRONMENT

1. Environmentally sensitive products2. Recycling3. Pablic safety

THE GENERAL SOCIAL WELFARE

1. Charitable contributions support for issues such as child labor and human rights

Business Ethics:

The business ethics is not so much to teach the difference between right and wrong as to give people the tools for dealing with moral complexity, tools that they can use to identify and think through the moral implications of decisions. Ethical conduct conforms to what a group or society as a whole considers right behavior. People working in business frequently face ethical questions. Business ethics is the evaluation of business activities and behavior as right or wrong. Ethical standards in business are based on commonly accepted principals of behavior established by the expectation of society, the firm, the industry, and an individual’s personal values.Ethics are principals of behavior that distinguish between right and wrong. [SKINNER,1992]

FINDINGS

A Brief Profile of Company

NAME: BRAC BANK Ltd.

LOCATION: DHAKA, GULSHAN-1

BRAC means Bangladesh Rural Advancement Committee. BRAC, a national, organization, started as an almost entirely donor funded, small-scale relief and rehabilitation project initiated by Mr. Fazle Hossain Abed to help the country overcome the devastation and trauma of the liberation war and focused on resettling from India. Today, BRAC has emerged as an independent virtually self financed paradigm in sustainable human development.

BRAC is one of the largest Southern development organizations employing 97,192 people, 61% women, and working with the twin objectives of poverty alleviation and empowerment of the poor.

The financial system of a country plays a crucial role to accurate the process of economic growth .With a view to exercising social control over the part of resources of the country, BRAC management intended to establish a financial institution in the name and style of BRAC Bank Ltd. in the year of 1999 with the authorized capital of Tk.200 crore.

BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance Corporation (IFC) and Shore cap International, has been the fastest growing Bank. The Bank operates under a “ double bottom line” agenda where profit and social responsibility go hand to hand as its strives towards a poverty free enlighten Bangladesh.

A fully operational Commercial Bank, BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which hitherto has remained largely untapped within the country. In the last 5 years operation, the bank has disbursed over BDT 1500 corer in loans to nearly 50,000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. Since inception in July 2001, the Bank’s footprint has grown to 22 branches, 350 SME unit officers and 19 ATM sites across the country, and the customer base has expanded to 2, 00,000-deposit advance accounts through 2006. In the years, ahead BRAC Bank

expects to introduce many more services products as well as add a wider network of SME unit offices, Retail Branches and ATMs across the country

VISSION of BRAC BANK:

BRAC management started their banking operation on July 04, 2001 with mission of building a profitable and socially responsible financial institution focused on marketing and business with growth potential, thereby assisting BRAC and stakeholders build a just enlighten, healthy, democratic and poverty free Bangladesh.

MISSION of BRAC BANK:

BRAC Bank also selected their vision in the focusing manner:

Sustain growth in Small & Medium Enterprise sector

Continuous low-cost deposit growth with controlled growth in retail assets

Corporate assets to be funded through self-liability mobilization. Growth in assets through syndication and investment in faster growing sectors

Continuous endeavor to increase fee based income

Keep the debt charges at 2% to maintain a steady profitable growth

Achieve efficient synergies between the bank’s branches. SME unit offices and BRAC field offices for delivery of remittance and bank’s other products & services

Manage various lives of business in a fully controlled environment with no compromise on service quality

CORPORATE VALUES :

#Our Strength emanates from our owner - BRAC. This means, we will hold the following values and will be guided by them as we do our jobs. # Value the fact that we are a member of the BRAC family# creating an honest, open and enabling environment #Have a strong customer focus and build relationships based on integrity, superior service and mutual benefit# Strive for profit & sound growth# Work as a team to serve the best interest of our owners#Relentless in pursuit of business innovation and improvement# Value and respect people and make decisions based on merit

#Base recognition and reward on performance

ACHIEVEMENT of BRAC BANK:

BRAC Bank has been rated as one of the most successful and sustainable SME Banks in the world. BRAC Bank has been recognized for “ICMAB” Best Corporate Award, 2007. This award is for the category of “Financial Institutions”. The criteria to select best financial institutions were as follows:

Capital Adequacy Asset Quality Profitability Liquidity Corporate Governance Market Share Contribution to national economy Risk Management Regularity Compliance Disclosure CSR

Social Responsibility discharged by the BRAC Bank

BRAC Bank is a social responsible organization with an obligation to consider the interests of customers, employees, shareholders, communities and ecological considerations in all aspects of its operations.

In line with vision of BRAC Bank, CSR is closely linked with thePrinciples of sustainable development, which argues that it should make decisions based not only on financial factors such as profits or dividends, but also based on the immediate and long-term social and environmental consequences of its activities.

As a part of its Corporate Social Responsibility BRAC Bank donated USD 38,252 to ICDDR, B for the renovation of a temporary shed that was thronged with diarrhoea patients soon after the recession of flood water of last year. A Co- Branded Credit Card was also introduced to maintain an ongoing support for ICDDR, B.

A donation of Tk.1million was made to an art exhibition of “Shako”- a 12 women artist organization. The total money collected by selling the paintings was donated to “Apon Drug Rehabilitation Center”.

BRAC Bank employees have made a contribution o Tk. 1.35 million equivalent to their one-day’s salary to BRAC for its countrywide flood relief and revalidation activities in August 2007.

Building on its track record of creative initiatives in the field of development, BRAC established BRAC University in 2001 with the goal of providing high quality broad-based education for students the next generation of young leaders and equipping them with the skills and knowledge necessary for taking on the challenges of development. In 2004, BRAC launched the James P. Grant School of Public Health to provide public health education of international excellence relevant to the particular needs of the developing world. The mission of the School is to improve health outcomes of populations in disadvantaged areas of the world, particularly the poor and women, through the application of the art and science of public health.

BRAC Bank took an initiative to stand by the SIDR affected people of Barisal and Khulna with relief. A number of employees distributed dry food, water, medicine, clothes etc. among the SME borrowers.

BRAC Bank has sponsored the 2nd National Women Entrepreneur Conference 2008, where women entrepreneurs from all over Bangladesh have participated to attend in the workshops and knowledge sharing activities undertaken by SME Foundation of Bangladesh.

To encourage and create awareness on SME development of Bangladesh, BRAC Bank sponsored AMDIB Forum organized by institute of Business Administration (IBA), this forum has helped participants to share views, get key insight and discussed about the ways to alleviate problems faced by SME entrepreneurs, while seeking financial support.

To assist Bangla Academy with their publication and research and development initiatives, BRC Bank has lent their support to carry forward their projects. Also BRAC Bank has supported in stall preparation and beautification of “Amor Ekushey Boi Mela 2008, this initiatives was taken to make the fair enjoyable for participants as well as the visitors.

BRAC Bank has also supported annual fund raising program of SAARC Women’s Association Dhaka to support and assist Islamia Eye Hospital and Dhaka Shishu Hospital for operation and treatment.

To support the humanitarian endeavors of Rotary International like, polio plus program, cancer detection unit, drug abuse and HIV/AIDS advocacy, BRAC Bank has sponsored a conference organization by Rotary International.

Six new immigration counter of Zia International Airport is established for outgoing passengers by BRAC Bank with proper branding and computer assistance to mitigate the time constraint and pressure of increasing number of passengers. A Probasi information counter has been installed for the wage earners who can gather information about sending foreign remittance to Bangladesh.

To conserve nature and alleviate the illegal slay of immigrant birds, BRAC Bank has sponsored “Pakhi Mela 2008” organized by Jahangirnagar University.

As a part of its corporate policy, BRAC Bank does not provide any financial support to any environmentally hazardous or child labor exploited company.

Approach of Social Responsibility :

In the corporate sector in our country CSR, activities are increasing as well as being recognized by the corporate body. Corporate Social Responsibility (CSR) can be a key different elements and means for achieving greater business value in this competitive world. Customers and public are very much aware of the CSR and demanding greater social accountability these days. Bank is always aware to ensure compliances and attaining greater social goals through good governance. Bank is already laid an emphasis on its commitment to the society.

ORGANIZATION VIEWS ITSELF AS A CITIZEN AND PROACTIVELY SEEKS OPPORTUNITIES TO CONTRIBUTE TO SOCITY is called proactive stance

This approach of social responsibility BRAC BANK is following.

The Task of Ethics:

The task of business ethics, therefore, is to make two central point’s 1) that business decisions do have an ethical component and 2) that manager must weigh the ethical implications of strategic decisions before choosing a course of action.

Most business leaders realize their firms cannot succeed without the trust of customers and the good will of society. A violation of ethics makes trust and Goodwill difficult to maintain.

The purpose of business ethics is not so much to teach the difference between right and wrong as to give people the looks for dealing with moral complexity, tools that they can use to identify and think through the moral implications of decisions. Most of us already have a good scene of what is right and wrong. We already know that it is wrong to lie, cheat and steal. We know it is wrong to take actions that put the lives of others at risk. Such moral values are instilled in us at an early age through formal and informal socialization. The problem, however, is that although most of managers rigorously adhere to such moral principles in their private life, some fail to apply them in their professional life, occasionally with disastrous consequences.

The task of business ethics, therefore, is to make two central points:

That business decisions do have an ethical components and

That manages must weigh the ethical implications of their decisions.

BRAC Bank establish an organizational climate that emphasizes the importance of ethics by maintaining three steps:

Managers use their leadership position to incorporate an ethical dimension into the values they stress.

Ethical values are being incorporated into the Bank’s mission statement Ethical values are acted on. Top managers are to implement hiring, firing and incentive

system that explicitly recognize the importance of adhering to ethical values in decision-making.

Conclusion and Recommendation:

BRAC, a national, private organization, started as an almost entirely donor funded, small-scale relief and rehabilitation project created for the benefit of resettling refugees returning from India after the liberation war.

With a view to bring positive change in the quality of life of the people of Bangladesh and building a profitable and socially responsible financial institution focused on marketing and business with growth potentials. BRAC Bank has started its journey since 1999 and started its operation since 2001.

The corporate social responsibility center, an innovative new establishment in Bangladesh to promote corporate social responsibility defines it as “a set of business practices based on ethical norms and transparency that contributes to the sustainable development of internal and external stakeholders in the best interest of business society and environment.

IN order to reach the ambitious goals and objects, BRAC Bank is to consider the interests of customers, employees, stakeholders, communities and ecological considerations extend beyond its statutory obligation to comply with legislation. In line with vision with BRAC Bank, CSR is closely linked with the principals of sustainable development , which argues that it should make decision based not only on financial factors such as profits or dividends, but also based on the immediate and long-term social and environmental consequences of its activities.

REFERENCE

1. Skinner, S., Ivancevich, J. (1992).Business for the 21st century.

2. BRAC BANK Ltd. (1999).Social Responsibility & Ethics: A Case Study on BRAC BANK Ltd., from

http://www.bracbank.com