CHAPTER ONE

INTRODUCTION

1.1 Background to the study.

Every organization has a motive for engaging in corporate social responsibility

practices which affects their financial performance positively or negatively. The motive

driving a firm to engage in CSR practices could be for strategic choice, philanthropic

purpose, economic returns or risk management. As a result, the relationship between CSR

and financial performance has been subject to several studies, which have shown conflicting

results. Little evidence support that CSR and financial performance are directly related. Lys,

Naughton and Wang (2015) opined that most banks take up corporate social responsibility

practices in their report to show the shareholders their investment in and commitment to

social welfare. CSR investments lead to higher levels of credibility, improved image or

reputation, higher employee retention and b