ABSTRACT

This study explored the degree to which RHB Banking Group is considered socially
responsible and the linkage between social responsibility activities of these organizations
and the organizational behaviour of employees and communities. Because employees are
primary stakeholders who directly contribute to the success of the company, understanding
employee reactions to corporate social responsibility may help answer lingering questions
about the potential effects of corporate social responsibility on firms as well as illuminate
some of the processes responsible for them.

Corporate social responsibility encompasses a wide range of issues ranging from

business ethics, corporate governance, and socially responsible business practice to
environmental sustainability and community engagement. CSR is an idea whereby
companies integrate their social and environmental commitment in line with their economic
development within an interaction with stakeholders. Company committed on improving the
quality of life of its workforce as well as local community and society in general. The issue of
CSR is gaining interest around the world since 1950s, where academicians and
practitioners have been consolidating the research in this area. In Malaysia, CSR issues
recently begin applied and measured by companies. This paper analyses the RHB Banking
Groups CSR concept and presenting various definitions from literature together with
Malaysian banking institutions definitions. This article aims to shed some light on the how
RHB Banking Group defines CSR and perform their CSR activities.

1.0

INTRODUCTION

Social responsibility is an idea that has been of concern to mankind for many years
and it has become of increasing concern to the business world and has also emerged to be
one of the inescapable top priorities for various business leaders or managers. Today,
cooperate body cannot merely focus on economic factor and profit margin but must also
reflect on the legal, ethical, moral and social consequences of their decisions.
Corporate Social Responsibility means the way in which business firms integrate
environmental, economic and social concerns into their culture, values, strategy, decision
making and operations in an accountable and transparent manner and, therefore, leading to
better creation of wealth, an improved society and better practices in the business
organization.
In simple definition when corporations are making profits, the money isnt just
disappearing or piling up in the pockets of the greedy super rich but some of it gets sent
back into the economy and everyone benefits. Businesses have unique opportunities to give
back to communities in a way that amplifies the intentions of their employees and company
mission.
Corporate social responsibility (CSR) has been part of company business strategy to
become more competitive, enhance the reputation of a company and strengthen its brand as
well as a management tool that actually drives performance improvement.
The focus on corporate social responsibility (CSR) has been actively in the limelight
within Malaysia for the past ten years, and as such has become a mainstay in many
corporations public relations as what demonstrate in the bank's campaign strategy. With
issues of global concern such as financial stability and governance as well as climate
change, poverty and the spread of infectious diseases, continuing scandals over product
responsibility and widespread corruption, the need for business to take the lead in
developing improved corporate social responsibility strategies for their business operations
has never been more apparent. In todays business environment people expecting
corporation become more responsible by doing activity that benefit the community such as
conserving the environment, sponsoring students for higher education, product quality,
safety and much more.
Banking Group has always been involved actively in society over many years and has work
with many organizations in need of support. It started a century ago when Kwong Yik Bank
CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

took effort to set up schools and associations that would aid the
growth of communities and the effort

RHB Banking Group has

carried on providing financial aid to under privileged school children, scholarships to

undergraduates to study locally.
The RHB Banking Group foundation of the Corporate Responsibility (CR) initiatives
is premised on the four quadrants of Community, Environment, Workplace and Marketplace.
As such, the Group embarks on activities that conserve the environment, enrich the lives of
communities, promote a culture of respect and care for its workforce and the public, all of
which, appropriately implements good governance.
There are many more programs and activities that has been successfully achieved
such as initiating blood donation drives for Kuala Lumpur GH, organizing trips to forest
reserves as to encourage youngsters to care for environment and last but not least offering
the use of one of the building to WWF Malaysia as an Environmental Research Centre. A
responsible corporation is one that gives back to the community in which it operates. It is
also one that conducts its business responsibly. RHB Banking Group believe that in order to
achieve its vision to be a leading multinational financial services group, the social, economic
and environmental impacts must be take into consideration when making a business
decisions. With that commitment in mind, the RHB Banking Group aims to operate
sustainably, while ensuring that all our initiatives produce positive impact on all stakeholders
- shareholders, employees, customers, partners and the community.

2.0

BACKGROUND

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

Bank Berhad was started its journey in banking industry as Kwong Yik
Bank in 1913 and following the amalgamation with Development and Commercial Bank
(DCB) in 1997 and merging with SIME Bank which was created following Sime Darbys
purchase of the United Malayan Banking Corporation (UMBC) in 1999 and finally capped in
growth in the new millennium with the acquisition of Bank Utama Berhad in year 2003. RHB
Bank Berhad provides wider range of commercial banking and finance related products and
services in Malaysia. RHB Bank Berhad also provides banking products and services in
accordance with the principles of Shariah via RHB Islamic Bank Berhad after obtaining
license on 1 March 2005.
RHB HEADQUARTER AT JALAN TUN RAZAK KUALA LUMPUR

DATO' KHAIRUSSALEH RAMLI , GROUP MANAGING

IRECTOR,RHB BANKING GROUP,
MANAGING DIRECTOR, RHB BANK BERHAD

2.1

CORPORATE MILESTONES f

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

Kwong Yik Bank Berhad

1913 Establishment of Malaya's first local bank
1997 Merges with DCB Bank Berhad

Sime Bank Berhad (formerly known as UMBC Bank)

1959 Establishment of United Malayan Banking Corporation Berhad (UMBC)
1996 UMBC becomes part of Sime Darby Berhad and is renamed Sime Bank Berhad
1999 Merges with RHB Bank Berhad.

DCB Bank Berhad

1966 Establishment of Development and Commercial Bank (D&C Bank, later renamed DCB
Bank)
1997 Merges with Kwong Yik Bank Berhad to form RHB Bank Berhad,

Utama Banking Group (UBG)

1976 A licensed commercial bank, is incorporated as a public company
2003 Merger of RHB Bank Berhad with Bank Utama Berhad
RHB Banking Group
1983 Rashid Hussain secures a broker's licence and sets up Rashid Hussain Securities Sdn
Bhd
1996 Rashid Hussain acquires a 75% stake in Kwong Yik Bank Berhad
1997 Merger of Kwong Yik Bank Berhad and DCB Bank Berhad.
1999 Merger of Sime Bank Berhad and RHB Bank Berhad.
2003 Merger of RHB Bank Berhad with Bank Utama Berhad.

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

2005 RHB Islamic Bank Berhad was formed

2009 Inception of Easy by RHB,
2012 RHB Capital acquired OSK Investment Bank
2013 RHB Banking Group celebrates RHB Bank's 100th Anniversary

2.2

CORPORATE VISION & VALUES

VISION

To be a Leading Multinational Financial Services Group

ASPIRATIONS

Top 3 in Malaysia / Top 8 in ASEAN

Strong market leadership in Malaysia

Regional powerhouse in ASEAN

Now RHB Bank Berhad is known as RHB Capital Bhd or RHB Banking Group and it

was incorporated in Malaysia as a public limited company on 24 August 1994 under the
name of DCB Holdings Berhad. It is now becomes the fourth largest fully integrated financial
services group in Malaysia, with listed subsidiaries like RHB Bank Berhad, RHB Investment
Bank Berhad, OSK Investment Bank Berhad, RHB Insurance Berhad and RHB Islamic Bank
Berhad, while its asset management and unit trust businesses are undertaken by RHB Asset
Management Sdn. Bhd. and RHB Islamic International Asset Management Berhad. Boldmodern-strong, that is what RHB Bank
Banking Group has emerged in big wave of transformation to go beyond boundaries
in year 2007 to equip the bank with a stable and renewed business plan backed by an
excellent capital position and strong liquidity that came with it connection to EPF.
It is now going global but yet reveal a truly Malaysia identity by being innovative
financial solution, possess outstanding people, devotion to customer service and ability to
convert challenges into achievement in banking industry. It has setting a new development
plan to move forward by crafting a wholesome bank instead of a monolithic organization and

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

not merely ruled by profitability at all cost but one that could help the economy, society and
employees succeed as well as to be a top financial contender in Malaysia and the region.

On July 15, 2013, RHB Bank Berhad turned 100 years. It is now stand at the verge of
the next phase of its journey to be a leading multinational financial services group in the
region with full support of various stake-holders. The RHB Banking Group will continuously
undertakes and sponsor various programs involving management team, employees,
cooperate clients, organizations and members of the public to build a wholesome bank, - a
bank that the community can call OURS.

IGNITE 2017 represents RHB Banking Group's transformation vision to ignite its
journey towards the RHB 2020 vision, and turn aspirations into impactful outcomes that will
enrich its organization, customers, industry and community. It will accelerate RHB's journey
towards achieving its 2020 ambition of being a Leading Multinational Financial Services
Group in the region.
This three year transformation program will focus on strengthening the Group's value
propositions by segments, launching differentiated and regional capabilities and scaling our
regional businesses to achieve 30% revenue contribution from international operations by
2017.

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

3.0

CORPORATE SOCIAL RESPONSIBILITY

What's the key to winning over consumers today? Business experts will cite

everything from a strong loyalty program to a personalized, mobile-friendly shopping

experience. These offerings are certainly important, but one thing that may tip the scales in
your favour is using your profits to do good in the world.
Corporate social responsibility (CSR) is a concept with many definitions and
practices. The way it is understood and implemented differs greatly for each company and
country. Moreover, CSR is a very broad concept that addresses many and various topics
such as human rights, corporate governance, health and safety, environmental effects,
working conditions and contribution to economic development. Whatever the definition is, the
purpose of CSR is to drive change towards sustainability.
Different organisations have framed different definitions of Social Corporate
Responsibility (CSR) - although there is considerable common ground between them.
Corporate social responsibility (CSR) refers to a business practice that involves
participating in initiatives that benefit society. Liz Maw, CEO of non-profit organization Net
Impact, noted that CSR is becoming more main stream as forward-thinking companies
embed sustainability into the core of their business operations to create shared value for
business and society.
"Sustainability isn't just important for people and the planet, but also is vital for
business success," said Maw, whose company connects students and professionals who
want to use business skills to do social good. "Communities are grappling with problems
that are global in scope and structurally multifaceted Ebola, persistent poverty, climate
CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

change. The business case for engaging in corporate social responsibility is clear and
unmistakable. Billions are at stake if fast and large-scale action is not taken."
Writer at ft.com/lexicon wrote corporate social responsibility (CSR) is a business
approach that contributes to sustainable development by delivering economic, social and
environmental benefits for all stakeholders. While, an expert of CSR also a former politician,
Mallen Baker in his business blog identified CSR is about how companies manage the
business processes to produce an overall positive impact on society.

The World Business Council for Sustainable Development in its publication Making
Good Business Sense by Lord Holme and Richard Watts, used the following definition:
Corporate Social Responsibility is the continuing commitment by business to behave
ethically and contribute to economic development while improving the quality of life of the
workforce and their families as well as of the local community and society at large.
For instance, the CSR definition used by Business for Social Responsibility is:
Operating a business in a manner that meets or exceeds the ethical, legal, commercial and
public expectations that society has of business.
Some companies may achieve remarkable efforts with unique CSR initiatives,
although it is difficult to be on the forefront on all aspects of CSR. But as with any process
based on the collective activities of communities of human beings (as companies are) there
is no 'one size fits all'. In different countries, there will be different priorities, and values that
will shape how business act.

Banking Group CSR philosophies are:

To embark on initiatives that cut across and impacts the community at large, transcending
cultural and religious differences
Voluntary contribution that is expected to create and instil positive social values not only to
the Group's employees, but also to the society as a whole.

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

3.1

IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY (CSR)

Why are companies interested in Corporate Social Responsibility? Social

responsibility is important to a business because it demonstrates to both consumers and the

media that the company takes an interest in wider social issues that have no direct impact
on profit margins. These issues may be local, national or global, but a concern for the health
and wellness of others that does not involve sales can be seen as commendable if done
well. The organization becomes responsible to all of its diverse stakeholders in providing
ethical leadership, practices, and products. If the organization is philanthropically
responsible, the organization becomes responsible to itself, shareholders, all stakeholders,
and the broader social welfare. The organization may incorporate practices of corporate
giving, volunteerism, or community partnerships.
While social and economic goals are seemingly unconnected, organizations may
reference the connections that CSR has to economic motives in their justifications of CSR
practice (Crane & Matten, 2007).
First, organizations may incorporate CSR to improve their public image in response
to the visibility on a firms negative social and environmental impact. Second, organizations
may justify CSR based on a belief that the practices will attract clients or consumers. Third,
participation in socially responsible behaviours might be justified under the belief that it
boosts employee morale. What is fascinating, however, is that organizations often
incorporate corporate social responsibility without any direct evidence of these connections
(Said, Zainuddin, & Haron, 2009).

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

In contemporary society, businesses have seen an increasing emphasis on the

importance of CSR activities due to mounting pressure from employees, consumers, and
other stakeholders.
When the importance of social responsibility is recognized as part of a business's
foundation, the impact of such endeavours can have life-changing consequences for
recipients of aid and, equally, instil a sense of pride in the people who support and work
toward its growth. A business can grow with or without social responsibility, but doing good
for others allows a business to reap rewards in many ways.

3.2

CORPORATE SOCIAL RESPONSIBILITY (CSR) WITHIN BANK

INDUSTRY
Rabobank is widely regarded as one of the leaders in promoting Corporate Social
Responsibility (CSR) and Socially Responsible Investment (SRI) and began a policy in the
mid-1990s to integrate sustainability issues into all of its business processes (CSR Malaysia,
2007). The banking industry occupies a unique position in every economy and that is why it
often attracts more than a casual regulatory attention. The industry in the 21st century must
have a moral face and live up to some modicum of social responsibility Soludo (2004) cited
by Amaeshi, 2006.
The awareness and placing CSR as part of the corporate agenda significantly is a
good sign that bank is not just aggressively poise for bigger profit but also focus their
investment strategies on benefits of socially and environmentally responsible investing. In
todays business, ignoring the importance of CSR in their business endeavours will give a
bad impression not only to the public but also to the image of the shareholders and
investors. This new global tactic may affect a bank's relationship with its clients and
shareholders. There are market benefits and competitive advantages for those companies
whose business policies integrate CSR (Ogrizek, 2004).
Environmen

Bank

Community

RHB Bank

t
X

Maybank

CIMB

Marketplace

Employee

Public bank
X
X
X
X
CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP
Hong Leong
X
X
X
X
AmBank

In line with this, the Bursa Malaysia CSR Framework looks at four main focal areas for CSR
practice (Bursa Malaysia, 2008). They are: the environment, the employee, the community
and the marketplace, in no order of priority.
Table 1: Banks and their CSR activities

Table 1 represent the commonest areas of CSR initiatives reported by the banks in
their respective annual reports. Their involvement in these areas is noted with X which
comprises of many activities as in Table 2.

Community
Charity
Donation
Sponsored
Blood Donation
Education
Healthcare
Graduate
employment
Scholarship
Cash awards
Employee
volunteerism
Community
Development
Charity Draw
Financial assistance
Concert

Environment

Turtle
Conservation
Tree Planting
Campaign\
reforestation
project
Nature day
camp
Recycling
Biodiversity
Conservation
Nature hunt
Green building
Protection of
endangered
species
Education
programmes
Landscaping
Zoo upkeep
Beautification

Marketplace
Good corporate
governance
Collaboration
Unethical
lending
Return value to
stakeholders
Operations
network
extends
Ethical conduct
sharing of
knowledge
exhibition
regional
conference
Innovation
Financing

Employee

Professional
Development
Sports
development
Training &
Development
Life-long learning
Employee
engagement
Health and safety
Service recognition
Partnership with
higher institutions
Labour rights
Transparent
appraisal system
Career
development
Fair remuneration
Special loan
interest rate
Employee
Engagement
Survey

Table 2: Main CSR Activities

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

3.3

BANKING GROUP CSR EVENTS

The RHB Banking Group has a strong commitment in enriching the community they

operate in, especially the younger generation.

Since 2007, its strategic Corporate

Responsibilty programmes have been aimed at addressing the needs of the core of the
community, namely children.
The latest announced CSR project by RHB with collaboration with Shimano
Singapore Pte Ltd and Lebuhraya Kajang-Seremban Sdn Bhd (LEKAS Highway) under
IJMs Toll Division is RHB Shimano Highway Ride @ LEKAS2016 which to be held on 30
April 2016.

This unique cycling event is yet another milestone for Malaysias sporting

industry and RHB are honoured to be given the opportunity to co-organise this first night
cycling race on a closed highway. RHB hope that events such as this will encourage
members of the public as well as our employees to engage in activities that promote healthy
lifestyles.
Besides that, RHB also had organized activity to promoting a healthy lifestyles
among their employees which have been conducted in 2015 - RHB Broga Challenge 2015.
Seventy two hikers and trail enthusiasts from RHB and the Department of Environments
(DOE) public outreach programme kick-started their weekend by going up Bukit Broga in the
inaugural RHB Broga Challenge on 31 October 2015. Divided into teams, the hikers raced to
the peak of Bukit Broga and back to the starting line. The trek featured several challenges
along the way which included crossword puzzles, sorting out beans in bowls and stringing
stacks of rubber bands. To add to the fun, the teams also competed to collect the most
amount of trash, and vied for the best costumes award.

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

RHB brought smiles to the faces of young patients at the Selayang Hospitals
Paediatric Wards on the eve of Hari Raya Aidil Adha, 23 September 2015.

The CSR

program was led by Dato Khairussaleh Ramli, Group Managing Director, the entourage
comprising members of senior management visited three paediatric wards and gave away
duit raya as well as raya gift bags consisting of healthy snacks and lunch packs. The team
was welcomed by Selayang Hospitals Dr Muhammad Yusof Sibert, Deputy Director
(Perubatan) II, Dr Wan Jazilah Wan Ismail, Head of the Paediatric Department and Dr Tang
Swee Ping, Childrens Specialist Consultant and Head of Rheumatology Department.

As our country places greater emphasis on the need for a sound education in Maths
and Science, RHB are proudly to say that they have been doing just that for years with the
RHB-Star Mighty Minds National Challenge. Introduced in 2009, it was designed to improve
the foundation in those two important subjects, as well as increase general knowledge
among secondary school students.

RHB organize annual state and national-level

championships as they believe that one of the best ways to enlarge a childs world view and
create informed future leaders is by instilling a love for books.
RHB employees have grown with us since the 1970s. Even back then, staffs were
sent for regular training both locally and abroad. In 1997, RHB set up own Training Centre,
and this was upgraded in 2001 to a Learning Centre which was moved to a state-of-the-art
Learning and Technology Centre in Bangi in year 2003. RHB hope to build a pipeline of
future leaders with RHB Young Graduate Trainees and Management Associate
Programmes, and the incentives we offer staff to pursue industry-related courses conducted
by Institute of Bankers Malaysia (IBBM).
All the CSR Programs listed above only a few of the successful CSR Program
conducted by RHB Bank Group. There are more programs held locally and internationally
by them that recognized by many organizations.

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

3.4

BANKING GROUP CSR ACHIEVEMENTS

One of the major CSR achievements by RHB banking group during the year 2007
and 2008 was the successful expansion of the Groups Missing Children Reuniting
Families programme. The Group have placed advertisements of missing children in major
dailies for the purpose of publicity of the missing children as well as placing pictures of any
child reported missing in all their ATM machines nationwide. Themed such as Crime
Prevention Tips for Kids, are the main caption of the advertisement and to comprehend the
activities a nationwide road shows in primary schools was carried out. In addition to safety
and crime prevention, the Group has also taken a steadfast position in contributing positively
to the educational development of future Malaysians.
The English language continues to be an important medium of communication. The
Government, in partnerships with schools and institutions of higher learning, has strived to
provide quality English education in order to prepare students to be globally competent. In
supporting this effort, the Group in 2007 became the presenting sponsor of the EduSmith
National EssayWriting Competition WordSmith 2007 and Tunas Pujangga 2007, a
competition that help cultivate a love for reading and writing among the youth and promoting
educational excellence.
The Group's strong commitment to enhancing the use of the English Language
amongst young students in Malaysia was recognised and honoured again in 2013 by
Malaysian English Language Teaching Association (MELTA) when it received the prestigious
Raja Zarith Sofiah Award for Corporate Social Responsibility in English Language Education.
The Group won the award based on its long term and sustained efforts in supporting the
development of the English Language in Malaysia.

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

RHB Banking Group was recognised at the 2014 World Bloggers and Social Media
Award by the Social Media Chambers on 26 February 2014. RHB received the Social Media
Excellence Award - Banking & Finance Industry for its active role in promoting social media
to the public through various channels available on the new media scene.

4.0

ANALYSIS
F Maon, A Lindgreen, and V Swaen in Journal of Business Ethics had develop

framework

in

the

Figure1 using Lewins (1951) force field model of change, which

characterizes change as a state of imbalance between pressures for (driving) and against
(restraining) that change (Wilson,1992). By changing the equilibrium between driving and
restraining forces by creating pressure in favour of change, managers can effect
change (Burnes,2004; Lewin,1951).
Several recent change models also use Lewins (1951) model (e.g.,Bamford and
Forrester,2003; Beverland and Lind-green,2007;

Bullock

and

Batten,1985),

which

consistently presents change as a finite activity. Lewins (1951) model consists of

three stages: unfreezing, moving, and refreezing.
In the first stage, the process requires managers to unfreeze past practices
associated with the status quo.

Unlearning is critical to a learning orientation and the

development of a CSR orientation and requires uncovering long-held, unchallenged,

cultural assumptions

about

the

right

way

to

do

things(Schein,1992).

Such

assumptions, often held sub-consciously, must resurface through a change intervention

unfreezing process and may result in energetic forces against change (Wilson,1992).
Barriers to the development of a CSR orientation include threats to stability, fear of change,
the belief that a CSR orientation is inappropriate for the organization, or the belief that
focusing on CSR will result in the organization losing sight of its core values. In the moving
stage, the organization is guided toward a new set of assumptions (Lewin,1951).
Identifying the need to adopt a CSR orientation, therefore, is just the start of the
change process. In the third stage, to affect a new state, managers must

refreeze

the

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

new cultural assumptions. Depending on the degree of change necessary, refreezing

even may involve wider changes that build structures and processes to support the
new ways (Katz and Kahn,1978). Critically, a learning orientation again is necessary to
ensure the refreezing of CSR-oriented cultural values, because an organizations learning
orientation represents a resource that influences the quality of CSR-related behaviours.
That

is,

(generative

in

learning

organization,

employees understand

how

to

learning), which involves constantly reflecting on past strategies

learn
and

approaches to business rather than just learning through adaptation (e.g., trial and
error) (Bell et al.,2002).

They also include a fourth stage: sensitizing. In this stage, which precedes the
unfreezing stage, top management becomes aware of the importance of sustainability
issues. A person, or group of people, also seeks to overcome resistance to change. The
four stages incorporate nine steps: raising CSR awareness inside the organization,
assessing corporate purpose in a societal context, establishing a working definition
and vision for CSR, assessing current CSR status, developing an integrated CSR
strategic plan, implementing the CSR integrated strategic plan, maintaining internal and
external communication, evaluating CSR-related strategies and communication, and
institutionalizing CSR policy.

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP

CORPORATE SOCIAL RESPONSIBILITY IN RHB BANKING GROUP