Determining the managerial perception on triple bottom line performance

Abstract

Purpose

The purpose of this paper is to determine managerial perception on social and environmental performance and its effect on financial performance in the Indian banking industry. In addition, the study tests moderating role of gender and experience of bank managers in influencing the association between the constructs.

Design/methodology/approach

The empirical study is conducted using survey methodology. Responses were collected from 182 bank managers covering the private sector, public sector, foreign, regional rural and cooperative banks. Structural equation modelling technique was used to test hypothesized relationships between the constructs using Smart partial least squares software (3.3.2 version).

Findings

Results of the study endorse the stakeholder perspective. Bank managers perceive that involvement in socially responsible practices strengthens the relationship between stakeholders and banks, which eventually improves financial performance. Conversely, results indicate that environmental practices by banks do not influence financial performance, thereby sustaining shareholder perspective. Further, results suggest that gender and experience of bank managers are not effective moderators in determining the relationship between the constructs.

Practical implications

Findings would be valuable for investors to better assimilate social and environmental performance along with its effect on the financial performance of banks. The study would also facilitate policymakers and regulators to outline pertinent policies and rules to uphold financial strength and integrity in the banking industry. Further, bank managers’ perception would have a marked influence on customers’ understanding of social and environmental activities that might shape customer satisfaction, trust, engagement and loyalty.

Originality/value

The study underscores the eminence of endorsing socially responsible practices in the banks. This would facilitate in improving the sustainability in the Indian banking industry.

Citation

Munjal, P. and Sharma, D. (2023), "Determining the managerial perception on triple bottom line performance", Journal of Financial Reporting and Accounting, Vol. 21 No. 2, pp. 322-343. https://doi.org/10.1108/JFRA-03-2021-0084