Bashing the banks – CSR is not the answer

There are several interesting stories criticising banks and credit card companies in the news today.  First, the Bank of England governor criticised high street banks for not issuing £5 notes through cash machines.  Mervyn King is quoted as saying:

“Such mutual convenience is a public good, and may not correspond to the private interest of commercial banks.”

Secondly, the banks have taken over responsibility for reporting credit card fraud to the police.  Although the banks claim not to have asked for a recent change in the law, they are criticised for hiding the true extent of the crime owing to a vested interest.

The third story relates to moves by Barclaycard (and other card providers) to reduce the minimum required monthly fees, which is marketed as a benefit, whilst actually causing many people to get into greater debt.

Perhaps given the scale of the industry, it is not unusual to see such negative stories in the media.  But it does make you wonder about their strategies with regard to public relations.  There is little evidence of any recognition of mutual interersts or corporate social responsibility in these policies. 

However, each of the major banks boasts of a CSR strategy.  For example,  wants to be leaders, not followers in CSR.  is active in climate change partnerships and promotes “sustainable banking”.  expresses a commitment to stakeholders through its standards and values.

I’m not disputing the investment and recognition of the value of CSR in the financial institutions – but there seems to be a conflict here between lots of good initiatives and business practices that lead to public criticisms.

It is likely that those responsible for managing and communicating such CSR programmes are separate to the “sharp-end” press officers responding to the media criticism. 

Does this matter?  After all, doesn’t society benefit from all the actions being undertaken under the CSR banner?   Is it realistic to expect commercial organisations to act in the interests of the public when conducting their business activities?

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Heather Yaxley PhD

Dr. Heather Yaxley is passionate about sustainable careers, reflective practice and professional development. I am a rhizomatic educator, practitioner, consultant, academic and scholar. As a qualified academic, I teach the CIPR professional qualifications with PR Academy and have experience teaching at various Universities. I run the Motor Industry Public Affairs Association (MIPAA) and my own strategic consultancy. I was awarded by PhD researching Career Strategies in Public Relations by Bournemouth University in 2017. I'm a published author, with books, chapters and academic papers to my name.

2 thoughts on “Bashing the banks – CSR is not the answer”

  1. I think that all commercial organisations need to take into account the views and interests of the public when conducting business. In one sense, this can be seen as a key rationale for conducting CSR activity.

    I don’t, however, believe that society automatically benefits from all actions undertaken by the function of CSR. This view tends to see the relationship between the organisation and public as equal when, in reality, the organisation has far greater control. HSBC, for instance, is responsible for deciding which projects to invest in and how to allocate the resources. Although the charities and communities at the receiving end of CSR activity do receive benefits, they are not treated as an equal partner. Evaluation, for example, is typically done to assess levels of media coverage and the impact of such activity on employee morale rather than on the benefits to the beneficiaries.

    Although, it is unrealistic for large organisations to have anything other than commercial interests at the centre of their activities, there is perhaps a need for them to be more transparent about why they are conducting CSR.

  2. Stuart – thank you for your interesting thoughts. Good point about the lack of equality in the relationship between the organisation and the public. At least economists such as Friedman were honest in their view that “the business of business is business”.

    I heard one of the private equity guys on Radio 4 yesterday justifying large incomes to a few people by citing how much money they donate to charity.

    It is an odd view that by doing good in one area you make up for less ethical practices elsewhere. This is simply feelgood CSR – which is fine provided it is recognised as such. I wonder if so much of it would go on if companies didn’t feel it gave them benefits to their reputation, media coverage etc as you indicate.

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