Ethical reporting in Islami Bank Bangladesh Limited (1983-2010)

Belal, Ataur R.; Abdelsalam, Omneya H. and Nizamee, Sardar S. Ethical reporting in Islami Bank Bangladesh Limited (1983-2010). Journal of Business Ethics, 129 (4), pp. 769-784.

Abstract

The main aim of this study is to undertake a critical examination of the ethical and developmental performance of an Islamic bank as communicated in its annual reports over a period of 28 years (1983-2010). Islami Bank Bangladesh Limited's (IBBL hereafter) ethical performance and disclosures are further analyzed through interviews conducted with the bank's senior management. The key findings include an overall increase in ethical disclosures during the study period. However, the focus on various stakeholders' needs has varied over time reflecting the evolving nature of the Islamic finance industry over the last three decades. Based on a secular economy, IBBL focused in the first two decades on the "Particular" Shariah compliance disclosure as a way of establishing its reputation and differentiating itself from conventional banks in a dual banking system. Post 2005, the ethical performance and disclosure shifted to more "Universal" disclosures such as sustainability, charity, employees, and community related disclosures signaling responsible conduct and the bank's adoption of a "wider stakeholder approach." However the bank is still failing to provide full disclosure on certain significant categories such as sources and uses of disposable income, thereby contradicting the principles of full and comprehensive disclosure and accountability. In addition, the structure of IBBL's investment portfolio reveals an overreliance on debt-based financial instruments and a shortcoming in fulfilling the developmental and social objectives of Islamic finance. This is evidenced by the "qualified" Shariah Supervisory Board reports that the bank consistently received. This research provides further evidence that Islamic banking and Finance in its current practices reflect the "global" and the "local" influences in an era dominated by global conventional finance.

Publication DOI: https://doi.org/10.1007/s10551-014-2133-8
Divisions: Aston Business School > Accounting
Aston Business School > Accounting Research Group
Related URLs:
Additional Information: The final publication is available at Springer via http://dx.doi.org/10.1007%2Fs10551-014-2133-8 Funding: El Shaarani Centre for Islamic Business and Finance and the Aston Academy for Research into Management, Aston University.
Uncontrolled Keywords: Bangladesh,case study,ethical reporting,Islami Bank,Business and International Management,Economics and Econometrics,Business, Management and Accounting(all),Law,Arts and Humanities (miscellaneous)

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