Corporate sustainability strategies by commercial banks in Kenya
Within the first decade of the 21st century, society begun to demand that firms carry out policies that move toward sustainable development. The sustainability philosophy assumes that firm directors and management should abandon a narrow version of classical economic theory and develop corporate strategies that include goals that go beyond just maximizing shareholders’ interests. Attention is directed to the demands of a wider group of stakeholders, since the firm’s success depends on stakeholder’s satisfaction. With this in mind, this study sought to achieve three main objectives: to identify corporate sustainability strategies adopted by commercial banks in Kenya , to identify the different stakeholders groups that the banks incorporate in the CSS and to establish the benefits of CSS to the commercial banks in Kenya. Using a sector wide approach of the 43 banks in Kenya, the research retrospectively covered sustainable developments within the last five years. The respondents were the key officers involved in strategy implementation: chief operations officers and the head of sustainability in each of the banks. The research study was carried out with the use of the questionnaires. The questionnaires used also comprised sections of questions relating to the three objectives of the research study. The questionnaires from the respondents totaled 35 (out of 86) which represented 41.6 % response rate. It was noted that banks tended to place value on immediate goals which translated to profit centers for the firms through taking advantage of business opportunities that arose with the achievement of CSS, hence there was a great emphasis across the banks on market driven CSS of: tailor-made capital investments, efficient operations standards and process and technology transfer. In addition, the government and the local community were identified as the key drivers of the sustainability strategies in the banking industry. This pointed to a growing need for the banks to reduce on their exposure to punitive regulatory decisions through a proactive role in CSS. Key recommendations from the study stress on the need for commercial banks in Kenya to make CSS a more definitive experience for customers by giving more emphasis on the commercial banks clientele. This will go a long way in delivering the banks missions and visions and at the same time satisfying commercial banks stakeholders needs Employees also play a major role in the day to day operations of the commercial banks and therefore sustainability strategies adapted by commercial banks should always encompass the employees as key stakeholders. There is need to place a premium on the way they are trained as well as allocating enough monies to aid in employee training and taking care of their training needs in relation to driving the CSS agenda. The study can be extended to a wider scope which will cover the role of finance function in driving company strategy, impact of operational and market driven strategies from a demand point of view and implications of CSS to end users and or consumers within the commercial banking industry in Kenya.