SOCIAL RESPONSIBILITY & ETHICS

A case study on

BRAC Bank Ltd.

EAST-WEST UNIVERSITY
 Summer 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 COntent
Title
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.
INTRODUCTION
Social 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.

METHODOLOGY
1. BOOK
BUSINESS for the 21st century
WRITTER- SKINNER
IVANCEVICH
2. WEBSITE
www.bracbank .com

LITERATURE REVIEW
Social 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. Consumers
2. Employees
3. Investors

 THE NATURAL ENVIRONMENT

1. Environmentally sensitive products

2. Recycling
3. 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 the
• Principles 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