CSR in the Banking Sector: A Legitimacy Approach to the Shareholders’ and Stakeholders’ Debate

Abstract

Globalization increased calls for corporations to use firms' resources to alleviate a wide variety of social problems taking into consideration that existing governments are unable or unwilling to deal with such problems. In this context, corporate social responsibility (CSR) in the banking sector became a strategic tool of legitimacy in parallel to the recognition of stakeholders' interests keeping the primacy of shareholders' interests. This article studies CSR in the Lebanese banking sector through Suchman's (1995) legitimacy approach to the shareholders' and stakeholders' debate. Using a qualitative approach, this paper discloses how the banking strategy in terms of CSR could respond to the process of legitimacy within the debate: " creating value for stakeholders creates value for shareholders " ; and reveals how normative considerations are likely to modify substantially banks' behavior and practices.