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Corporate Social
Responsibility inthe Kingdom o
Saudi Arabia 2009The National Commercial Bank Study on Perceptions o CorporateSocial Responsibility across the Kingdom o Saudi Arabia
Conducted in cooperation with YouGovSiraj
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About NCBThe National Commercial Bank is the most prominent amongst all the Saudi banks and was the rst bank establishedin Saudi Arabia. The Bank initiated business in the name o The National Commercial Bank under Royal Decree on20 Rabi Thani 1373H (26 December 1953). The initial paid-up capital or NCB was SR 30 million (US$ 8 million).Since its establishment, the bank maintained its legal structure as General Partnership until it was converted into aSaudi Joint Stock Company in 1997 as a rst step towards initial public oering. In 1999, the Government, throughthe Ministry o Finances Public Investment Fund (PIF) acquired a majority holding in the Bank. With the changesin the Banks ownership in 1999, a new Board o Directors was ormed under the chairmanship o Mr. Abdulla
Salem Bahamdan who was re-elected as Chairman o the Board o Directors. On October 1, 2005, Mr. AbdulKareem Abu Al Nasr was appointed as General Manager and later assumed the banks rst Chie Executive Ocer(CEO) position on January 1, 2006 ater NCB had applied the principles o the corporate governance to separatebetween ownership and management o the Bank.
NCBs ratings o A by Fitch Agency and A+ by Standard and Poors are indicative o the quality and perormancethat it delivers each day to its customers. A pioneer in Islamic banking, with a total group-wide client base o morethan 2 million, NCB operates its comprehensive array o alternative delivery channels such as Al-Ahli TelephoneBanking, Al-Ahli Mobile Banking, Al-Ahli Online, Alahli eCorp, Alahli ePay, Al-Ahli Tadawul, Al-Ahli InternationalBrokerage through a manpower o more than 5400 employees (86% Saudis).
Since its inception, NCB has taken great care o its business, employees and key stakeholders, always strivingto make a positive contribution to the communities in which it operates. In act, NCB CSR Units vision is to be
the leading joint stock company in the eld o Corporate Social Responsibility. NCBs CSR mission is to introducecreative, innovative, and non-prot programs that contribute to the countrys development. The banks CSR initiativesare broad in scope and look to cater to a number o areas related to community development including:
Contributing to unemployment reduction through the creation o job opportunitiesContributing to the education development o the societyContributing to the health development o the societyAdopting various social programs or assisting the needy and encouraging the concept o voluntary work inthe society
As part o its commitment to CSR, NCB published its rst Sustainability Report in 2008. This report positions NCBas the rst bank in the Middle East to publish a sustainability report reviewed by the Global Reporting Initiative (GRI)
and the rst company in the KSA to comply with the G3 guidelines or dening report content, transparency andbalanced reporting.
Also in 2008, in recognition o the companys eorts and contribution within CSR, NCB was awarded the CSRLeadership Award at the 5th Annual Corporate Social Responsibility Summit held in Dubai, U.A.E., and waspresented the Social Responsibility Award at the 2008 Saudi Achievement Awards by ITP Group.
In January 2009 NCB got the rst rank on the competition o King Khaled Award or Best Responsible CompetitivenessCompany, where NCB received the award at the 2009 Global Competitiveness Forum held in Riyadh KSA.
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Whats Inside
01 Introduction
02 Key Findings
03 Awareness
04 Impact05 Priorities
06 Survey Results
12 Demographics and Methodology
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IntroductionCorporate Social Responsibility (CSR) is about the integration o social,environmental and economic considerations into the decision-makingstructures and processes o a business. Sustainability or an organization,undamentally requires contributing positively towards societal and environmentalchallenges, along with engaging and collaborating with shareholders andstakeholders to manage potential risks as well as build credibility and trust insociety in a more eective manner.
There is broad and varied awareness and understanding o CSR in the regionas well as within the Kingdom o Saudi Arabia (KSA). Many organizations inthe region have been involved in CSR-related activities leading to enhanced
consumer trust, community improvement, employee recruitment and retentionand improved nancial perormance without ormally organizing these initiativesunder a single CSR umbrella. Researching current perceptions is critical orunderstanding the nature and approach to CSR in KSA today. As a regional CSRLeader, National Commercial Bank (NCB) is dedicated to raising awarenessand understanding o CSR and collaboratively, with YouGov Siraj, conducted astudy on perceptions o CSR across the KSA. The research was commissionedin November 2008 to explore attitudes, opinions and perspectives on the impacto CSR amongst various groups including government and private sectors, non-governmental organizations, media, consumers and those employed acrossKSA. This study highlights the current awareness o and approach to CSR in theKSA, its impact on corporate reputation, loyalty and recruitment, as well as thecurrent social priorities in the country.
The results indicate that awareness o CSR initiatives is quite widespread,however, priorities are fuid depending upon the geographical area and thespecic community needs. Also, the general opinion o CSR impact is verypositive rom the perspectives o all stakeholders interviewed. Much importanceis attached to charitable giving to improve the lives o those in need, as well asinitiatives positively impacting unemployment and encouraging entrepreneurship.What is also critical is the need and ability to eectively communicate the valueo the CSR strategy and activities to the relevant stakeholders in terms thatdemonstrate its value to their interests. As the research was both qualitativeand quantitative in nature, the qualitative ndings have been summarized inthe relevant report sections while the quantitative data has also been illustrated
within the Survey Results section. When viewed strategically, CSR can becomea source o tremendous social progress, as business applies its considerableresources, expertise and insights to activities that benet society.
As an extension of our commitment to corporate social responsibility in the
region, NCB is pleased to support efforts toward building CSR awareness and
understanding in Saudi Arabia and across the region. With these objectives in
mind, we have published this study to serve as a base from which positive corporate
interest can emerge and proactive development as well as implementation of CSR
initiatives will be championed in the Kingdom.
Abdul Kareem Abu Al Naser
CEO, National Commercial Bank
01 Corporate Social Responsibility inthe Kingdom o Saudi Arabia
35%o bankcustomers eel condent in
dealing with a bank that isinvolved in CSR.
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Key FindingsCompanies are increasingly being evaluated byvarious stakeholders on the environmental impacto their operations, their activities in the communities inwhich they operate, their treatment o employees andhow they respond to the needs o society at large. Byembracing CSR, they can contribute to the long-termgrowth and development o the region, as well as realizeits positive impact on their business operations.
CSR activities in the KSA are viewed as important
to serve the more unortunate in society as well
as a medium through which to obtain a sense
o religious ulllment. However, respondents elt
that it is not appropriate to restrict these activities
on the basis o religion .
Overall, organizations involved in CSR activities
are perceived to have developed a positive image
in society as well as loyalty amongst customersand employees. In the specic context o the
nancial industry, CSR involvement promotes
trust, loyalty and motivates stakeholders to
personally contribute to initiatives.
Most investors perceive that CSR involvement
contributes to the perception that organizations
involved in CSR are nancially protable enough
to allocate unds to ulll social needs. Investing
in such organizations also gives them a sense o
being a co-contributor.
Similarly, a company that is committed to CSR
appears to attract talent who that also eels proud
to be employed by such an organization.
One o the key actors that contributes to an
organizations inability to enjoy the ull benet
o CSR commitment is the absence o eective
awareness about its initiatives. Communication is
critical.
02Corporate Social Responsibility inthe Kingdom o Saudi Arabia
49 % o respondents believe thatcompanies involved in CSR are consideredto exhibit good business ethics.
41% o investors wouldrecommend a Bank to others i it isinvolved in CSR activities.
62% o respondents believe CSRacilitates the development o a strongerrelationship between customers and theorganization.
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AwarenessThere is considerable eort throughout the region to enhancethe awareness o CSR, and specically within the KSA, it isa commitment rom NCB to ensure that eorts continue in thisdirection. Most companies that actively participate in CSR tend toocus on the areas o health, saety and environment, ethics andcorporate governance, commitment to the communities in whichthey operate and commitment to their employees. How theyapproach each o these areas is usually customized or tailoredto their respective organization, industry norms or stakeholderexpectations.
03 Corporate Social Responsibility inthe Kingdom o Saudi Arabia
DRIVERS
The results also identiy a variety o CSR driversor an organization, though the prominentthemes that emerged were societal improvementor reormation, and a means to ulll onesreligious obligations o serving the impoverishedand underprivileged.
The benets identied were aligned with these
themes, though also included enhancingcorporate reputation, gaining community trust,brand building leading to additional businessopportunities, and enjoying positive responserom approving government agencies.
Government and charitable organizations appearto positively respond to organizations engagedin CSR. It is perceived that the governmentcannot be expected to ulll all social servicesand societal needs; as a result, it appreciatesassistance rom the corporate arena. Anotherperspective identied is that the Governmenthas a avorable opinion o organisations whotake responsibility or societys betterment.
Most respondents elt that CSR activities shouldnot be mixed with religion and thereore did nothave to be Shariah compliant.
FOCUS
The top 3 CSR activities identied in KSA arecreating job opportunities or the unemployed(49%), encouraging entrepreneurship (47%)and conducting or supporting anti-smokingcampaigns (46%).
Other activities identied include medicalsupport programs (32%), computer literacy
and education drives (30%), and training to thephysically challenged (41%).
Signicantly low awareness o CSR activities wasin relation to womens programs (10%), anti-obesity campaigns (11%) and career counseling(11%).
Although awareness o the top 3 activitiesidentied by the male respondents and emalerespondents are the same, they are slighlt variedin order. Female respondents report a higherawareness o antismoking campaigns (55%).
In Riyadh, anti-smoking campaigns (53%) andorphan support and rehabilitation activities (47%)generate greater awareness, whereas in Jeddah,the initiatives associated with educational andvocational programs or women (45%) tops thelist. Awareness or unemployment reduction andencouragement o entrepreneurship are almostidentical in both cities.
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ImpactThe impact o CSR upon various stakeholders was evaluatedin this study in order to identiy whether CSR has a positiveaect on reputation, image, trust and loyalty. The results showed italways does. CSR is amongst the key ingredients o good corporatereputation and an engaged and realistic CSR strategy can strengthenan organizations overall reputation, thus making it easier tomanage, and improving the prospects or a company to attract newcustomers and increase market share. From the perspective o theinvestment community, CSR involvement can improve a companysstock market valuation and its capacity to access capital. Anotherkey beneft involves establishing the conditions that yield betterresults concerning employee recruitment, commitment, retention,
motivation, innovation and productivity. Stakeholder engagementand collaboration involving open dialogue, eective partnershipsand demonstration o transparency can eectively improve acompanys relations with communities and thereby stimulateimproved business prospects or its uture.
04Corporate Social Responsibility inthe Kingdom o Saudi Arabia
NEW TALENT & RETAININGWORKFORCE
About 60% o respondents agree that a qualifedworkorce can be attracted to such organizationsand 58% eel it would develop loyalty.
Engaging in CSR activities does not necessarilyqualiy organizations as air employers
60% o respondents eel that organizationsinvolved in CSR are able to motivate their
qualied workorce to give their best to theorganization.
ENHANCING BRAND IMAGE,TRUST & REPUTATION
A high 69% o respondents agree thatorganizations conducting CSR activities refecta positive image in society. 57% are also o theopinion that such organizations are trusted asa result, while 61% believe this involvementrefects good business ethics.
INVESTORS & CUSTOMER LOYALTY
More than hal the respondents (56%) think CSR attracts new investors and another 62% claim CSR acilitates the
development o a stronger relationship with the organization.
Amongst customers, 63% claim they would recommend to riends and amily a bank that is involved in CSR activities.
Investors view organizations that have dedicated CSR programs avorably. 42% are o the opinion that such organizationsare trusted by their shareholders and investors, while a high 62% believe they would attract new investors.
51% o customers agree they would be encouraged to contribute to causes in which their bank is involved.
The qualitative results also indicate that people would like to be part o such noble acts as it allows them to eel thatthey are also doing their bit or the society.
More than 50% o customers agree that a banks CSR involvement could lead to stronger loyalty.
56%o respondents think CSR attracts
new investors.
60%o respondents eel thatorganizations involved in CSR are able tomotivate their qualied workorce to givetheir best to the organization.
More than 50% o customersagree that a banks CSR involvement couldlead to stronger loyalty.
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PrioritiesThe act o giving back to the community, taking care oemployees and protecting the environment have beenprevalent in organized commerce and trading or centuries.Today, business and commerce have made this a priority.Although there was signicant overlap between awarenesso current CSR initiatives underway throughout the KSA andpriority social issues identied, themes or issues emerged thatwere not identied as being tackled. This could be a result o aneed or relevant programming or a simple result o ineectivecommunications o existing programs.
05 Corporate Social Responsibility inthe Kingdom o Saudi Arabia
STAKEHOLDER PRIORITIES
Corporations participating in the study identiedcharitable giving as a key activity. They alsoclaim to work closely with government agenciesin supporting social causes. Some examplesinclude: mass marriage, proessional day, jobcreation, environmental preservation, mobilelibraries, health-related awareness programsand promotion o local culture.
The media that was interviewed claim to beengaged in various charities, promote CSR-related initiatives o prominent charitable orprivate organizations through their respectivemediums, sponsoring events and undraisingor specic causes.
Private sector and non-governmentalorganizations identied specic programsin which they were involved. These includeappliance distribution to those in need,
helping people perorm Hajj/Umrah, housingschemes or the homeless, medical care or theimpoverished and various training programs.
INITIATIVES REQUIRED
When respondents were asked to identiy the
most important social causes or Saudi society,
unemployment remained the key issue to be
addressed (83%).
Job opportunities or the physically challenged
(65%), orphan support (63%) and encouraging
entrepreneurship (63%) are consideredimmediate issues to be tackled.
Although basic education or children, womens
issues and human rights all very low on the
awareness radar, these issues are identied
amongst the top 10 social causes or Saudi
society today.
O the top 5 social causes identied, 3 o them
are common across both genders.
Job creation to reduce unemployment is the
main ocus across all age groups, though the
group 36+ years o age identies basic education
or children as a key concern.
The age groups 21-25 years o age and 31-
35 years o age highlighted womens issues as
important to address.
83%o respondents believe that unemployment is themain social issue that needs to be addressed.
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Survey Results
Providing job opportunities to reduce unemployment
Encouraging entrepreneurship and financing projects for Saudis
Anti-smoking campaigns
Supporting Charitable organizations
Providing training and job opportunities to the physically challenged
Orphans support and rehabilitation
Educational and vocational programs for women
Medical Support Programs
Computer literacy and education drivers
Basic education for children
Food program for the needy
Equipment donation to hospitals / clinics
Marriage counseling
Human rights support
Preservation of the Environment
Help in emergencies such as natural disasters
Infrastructural development within the country
Supporting medical research
Road safety rules awareness
Youth career counselling
Anti-obesity campaigns
Rehabilitation of divorced Saudi women
49
47
46
41
41
39
38
32
30
29
24
21
19
19
17
16
15
13
12
11
11
10
06Corporate Social Responsibility inthe Kingdom o Saudi Arabia
Q. Please indicate which CSR activities are you aware o that semi-private and private sector organizations areconducting in Saudi Arabia ? (Please select all that apply)
All gures in percentage
Total Respondents
FIGURE 1
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07 Corporate Social Responsibility inthe Kingdom o Saudi Arabia
Anti-smoking campaigns
Providing job opportunities to reduceunemployment
Encouraging entrepreneurship andfinancing projects for Saudis
Educational and vocationalprograms for women
Orphans support and rehabilitation
Basic education for children
Medical Support Programs
Computer literacy and educationdrivers
Supporting charitable organizations
Providing training and job opportunitiesto the physically challenged
55
49
47
42
40
38
37
37
36
34
49
48
44
42
42
39
37
30
29
28
Providing job opportunitiesto reduce unemployment
Providing training and jobopportunities to the physically challenged
Orphans support and rehabilitation
Encouraging entrepreneurship andfinancing projects for Saudis
Basic education for children
Infrastructural developmentwithin the country
Human rights support
Rehabilitation of divorced Saudi women
Anti-smoking campaigns
Supporting medical research
83
65
63
63
61
58
55
53
53
51
MaleFemale
Survey Results
Q. Please indicate which CSR activities are you awareo that semi-private and private sector organizationsare conducting in Saudi Arabia ? (Please select all thatapply)
All gures in percentage
By Gender
Q. In your opinion, which o the ollowing social causesare the most important or the benet o the Saudisociety ? (Please select all that apply)
All gures in percentage
Total Respondents
FIGURE 2 FIGURE 3
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08Corporate Social Responsibility inthe Kingdom o Saudi Arabia
Providing job opportunities to reduce unemployment
Providing training and job opportunities to the physically impaired
Orphans support and rehabilitation
Encouraging entrepreneurship and financing projects for Saudis
Basic education for children
Infrastructural development within the country
Human rights support
Rehabilitation of divorced Saudi women
Anti-smoking campaigns
Supporting medical research
36+
31 - 35
26 - 30
21 - 25
84
81
84
85
69
58
65
66
68
63
59
61
68
66
60
59
73
64
53
53
57
60
5756
60
59
51
50
52
60
44
59
56
51
51
53
56
52
47
50
Survey Results
Q. In your opinion, which o the ollowing social causesare the most important or the benet o the Saudisociety ? (Please select all that apply)
All gures in percentage
By Age Group
FIGURE 4
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09 Corporate Social Responsibility inthe Kingdom o Saudi Arabia
MaleFemale
Survey Results
Providing job opportunities to reduceunemployment
Providing training and job opportunities
to the physically challenged
Human rights support
Orphans support and rehabilitation
Basic education for children
Anti-smoking campaigns
Rehabilitation of divorced Saudiwomen
Infrastructural development withinthe country
Encouraging entrepreneurship andfinancing projects for Saudis
92
70
63
62
59
59
59
58
55
64
82
65
Educational and vocationalprograms for women
Supporting medical research
73
52
58
63
54
51
51
61
Q. In your opinion, which o the ollowing social causesare the most important or the benet o the Saudisociety ? (Please select all that apply)
All gures in percentage
By Gender
Q. On a scale o 1 - 5, where 1 is strongly disagreeand 5 is strongly agree, how would you rate yourbank that you deal with on the ollowing statements,i you ound out that it is involved in CSR activities ?
All gures in percentage
Customers
FIGURE 5 FIGURE 6
Recommend the bank to family / friends
Feel confident in dealing with the bank
Trust it completely
Recommend the bank as an employer to those seekingemployment
Develop stronger loyalty towards bank
Feel encouraged to contribute to the causes theyare involved in
Be encouraged to invest with the bank
10 6 21 28 35
8 9 17 32 35
8 8 19 32 32
12 8 27 22 30
16 8 26 21 28
14 9 27 23 28
10 23 23 3113
Strongly disagree
Disagree to some extent
Neither agree nor disagree
Agree to some extent
Strongly agree
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10Corporate Social Responsibility inthe Kingdom o Saudi Arabia
Reflect a positive image in society
Are considered to exhibit good business ethics
Are trusted by people who deal with them
Attract new investors
Are trusted by their shareholders and investors
9 4 9 20 57
5 9 18 25 43
6 7 23 34 31
5 6 28 34 28
9 8 41 19 23
Strongly disagree
Disagree to some extent
Neither agree nor disagree
Agree to some extent
Strongly agree
Recommend the bank to family / friends
Feel confident in dealing with the bank
Recommend the bank as an employer to those seekingemployment
Develop stronger loyalty towards bank
Feel encouraged to contribute to the causes they areinvolved in
Trust it completely
Be encouraged to invest with the bank
8 3 19 29 41
6 6 15 35 39
11 11 20 21 37
11 9 25 19 36
8 9 17 30 36
15 9 19 25 32
7 26 21 379
Strongly disagree
Disagree to some extent
Neither agree nor disagree
Agree to some extent
Strongly agree
Survey Results
Q. On a scale o 1 - 5, where 1 is strongly disagree and 5is strongly agree, please rate the ollowing statementsthat relate to organizations that are involved in CSRactivities ?
All gures in percentage
Investors
Q. On a scale o 1 - 5, where 1 is strongly disagree and5 is strongly agree, how would you rate your bank thatyou deal with on the ollowing statements, i you oundout that it is involved in CSR activities ?
All gures in percentage
Investors
FIGURE 8FIGURE 7
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11 Corporate Social Responsibility inthe Kingdom o Saudi Arabia
12 6 13 20 49
8 8 21 29 33
7 7 24 29 32
10 8 23 30 28
9 8 23 33 27
7 9 28 30 26
8 9 23 34 26
10 9 24 33 24
14 9 36 24 17
23 13 33 15 16
14 14 38 18 16
Reflect a positive image in society
Develop a strong relationship and loyalty with thier customers
Are considered to exhibit good business ethics
Develop loyalty amongst employees
Attract qualified workforce
Attract new investors
Are able to motivate their workforce to give their best to the organization
Are trusted by people who deal with them
Are trusted by their shareholders and investors
Do not discriminate between employees based on nationality / gender
Are perceived to be fair in rewarding employees
Strongly disagree
Disagree to some extent
Neither agree nor disagree
Agree to some extent
Strongly agree
Survey Results
Q. On a scale o 1 - 5, where 1 is strongly disagree and5 is strongly agree, please rate the ollowing statementsthat relate to organizations that are involved in CSRactivities ?
All gures in percentage
Total Respondents
FIGURE 9
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12Corporate Social Responsibility inthe Kingdom o Saudi Arabia
Demographics & MethodologyThis study was designed in collaboration with specialists in the eld o CSR and the survey was conducted byYouGov Siraj on behal o National Commercial Bank.
Data was collected in November / December 2008 rom respondents in the Kingdom o Saudi Arabia.
The methodology applied 460 online interviews and 13 in-depth ace-to-ace interviews across the Kingdom oSaudi Arabia including the cities o Riyadh, Jeddah, Khobar, Madinah, Abha, Jizan and Hail.
48% o respondents were rom Riyadh, 32% were rom Jeddah and 20% rom the other geographical areas.
In the quantitative study, 47% o respondents were rom the government sector, 46% were rom the private sectorand 7% were private business owners.
In the qualitative study, 38% o respondents were rom the government sector, 23% were rom the media sector,23% were NGOs and 15% were rom the private sector.
In the qualitative study, 23% o respondents were rom the engineering and automotive industry, 23% were romthe media, 8% were rom FMCG, 8% were rom the nancial industry, 8% were rom construction industry, 23%represented NGOs and 8% were rom the airline industry.
O the total respondents, 72% were investors and 92% were also specically banking customers.
84% were male respondents while 16% were emale respondents.
The age groups interviewed: 17% were 21-25 years o age, 30% were 26-30 years o age, 25% were 31-35 yearso age and 27% were 36 years o age or older.
Those employed accounted or 91% o respondents while the unemployed actively seeking employment accountedor 9%.
For more inormation aboutCorporate Social Responsibility in the Kingdom o Saudi Arabia 2009 :National Commercial Bank Surveys Perceptions onCorporate Social Responsibility Across the Kingdom o Saudi Arabiaplease contact:
The National Commercial Bank
Corporate Social Responsibility Department
T +966 2 2299333F +966 2 6426615
Mailto: [email protected]
www.alahli.com
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The National Commercial Bank