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Alternative enterprises – organizations that operate as a business while still also being driven by a social purpose – are sometimes owned by workers or other stakeholders, rather than shareholders. What role does ownership play in enabling alternative enterprises to prioritize substantively rational organizational values, like environmental sustainability and social equity, over instrumentally rational ones, like profit maximization? We situate this question at the intersection of research on: (1) stakeholder governance and mission drift in both hybrid and collectivist-democratic organizations; and (2) varieties of ownership of enterprise. Though these literatures suggest that ownership affects the ability of alternative enterprises to maintain their social missions, the precise nature of this relationship remains under-theorized. Using the case of a global, social, and environmental values-based banking network, we suggest that alternative ownership is likely a necessary, but not sufficient, condition to combat mission drift in enterprises that have a legal owner. A supermajority of this network’s banks deploy alternative ownership structures; those operating with these structures are disproportionately associated with social movements, which imprint their values onto the banks. We show how alternative ownership acts through specific mechanisms to sustain enterprises’ missions, and we also trace how many of these mechanisms are endogenous to alternative ownership models. Finally, we find that ownership models vary in how well they enable the expression and maintenance of these social values. A ladder of mission-sustaining ownership models exists, whereby the dominance of substantive, non-instrumental values over operations and investment becomes increasingly robust as one moves up the rungs from mission-driven investor ownership to special shareholder and member-ownership models.

This paper aims to analyse whether the practices of Islamic banks in Bahrain are in line with value-based Islamic banking (VBIB) and reporting disclosure in the annual reports towards achieving their fundamental objectives of human-centred economic development and social justice.

Based on Islamic finance, Islamic economic principles and perception of Maqasid al-Shari’ah, this paper examines and assesses the current practices of Islamic financial institutions (IFIs) in Bahrain through content analysis of financial and annual reports of Islamic banks in Bahrain and interviews of Islamic banking experts.

The findings reveal that value-based banking (VBB) has not been translated fully into practice by the Islamic banks in Bahrain.

The data analysis was restricted to Islamic banks in Bahrain.

This paper identifies the need for reporting standard development to improve the VBB practice in Bahrain in the future. Looking at the objectives of the IFIs, this paper introduces the concept of VBB in Bahrain, which includes ethical banking, responsible banking and social responsibility. The study adds value not only to the current Islamic finance literature but also helps many stakeholders, including prospective academics, who may conduct comparative studies in different jurisdictions throughout the world.

The specific contribution of this paper is the identification of the VBB practices and related disclosure in the Islamic banking industry in Bahrain. The study is useful to harmonise and standardise the practices of VBIB by the contemporary Islamic banks in Bahrain.

This chapter aims to examine Bank Negara Malaysia’s (BNM) approach in fulfilling its financial consumer protection mandate from unfair contract terms and the statutory framework relevant for consumer protection in the domestic market. This is a qualitative-based research. Using content analysis, this study analyses BNM’s Financial Stability and Payment Systems Report from 2012 to 2016, specifically on the ‘market conduct and consumer empowerment’ to explore BNM’s prudential regulatory, supervisory and consumer protection roles in protecting bank consumers from unfair contract terms. It is found that even if a number of standards and guidelines have been issued by BNM in improving ‘fairness and transparency’, the potential risk facing bank consumers from unfair terms in standard consumer contracts of Islamic banks especially where terms may be unfair or unclear remains unchanged. This study recommends that BNM as the Central Bank and financial regulator of Malaysia promotes self-regulation of the Islamic banks by adopting value-based banking of a consumer-focussed culture in delivering an effective protection for consumers from unfair contract terms and empowering them in their dealings with Islamic banks in Malaysia. This study will be helpful in bringing a policy formulation by BNM in identifying their weak areas and suggesting improvements in pursuing a strong consumer protection agenda from unfair contract terms.

The purpose of this paper is to discuss the stakeholders of debt settlement programmes in general and some lessons learnt from the most significant debt settlement programmes of recent years in Hungary. The study also presents a planned debt settlement programme in Hungary. The paper explores and details behaviours and motivations of different stakeholders in debt settlement in general and also with reference to a specific case study. As for its main research question, the paper seeks to identify the preconditions of a successful debt settlement programme with specially emphasis on the poor.

Data from semi-structured in-depth expert interviews, documents and former research papers were collected for identifying previous Hungarian debt settlement programmes and potential lessons learnt. After a general discussion, based on primary and secondary sources, a case study is presented to obtain a more comprehensive understanding of opportunities and challenges of debt settlement.

Six preconditions of successful debt settlement targeting the poor are identified. In the case study, the existence and relevance of these preconditions are tested: the main finding is that they all are important for solving the situations, so a partial solution is not sufficient. In the scope of the case study, more precisely within the planned innovative banking solution, the motivations of the bank and the coordinator NGO are identified. On the part of the bank, motivations for solving social problems (both as far as business and moral issues are concerned) are relevant, while – as for the other party – the situation of the debtor is important to understand so that opportunities of cooperation can be identified. In addition, as other stakeholders also influence the potentials of the programme, their cooperative attitude is also needed.

Limitations consist in generalisation: the study presents some cases from one single country and finally it focuses only on one specific case in one specific social and economic context in Hungary. Having recognized this risk, the author opted for basing research questions on theory, documented the process in detail, and also used triangulation through applying a multiple data collection (interview, content analysis, literature review) method.

Besides presenting an academic understanding of the phenomena, the goal of the study is to contextualize and interpret the case, to help the realization of currently frozen initiatives and to promote similar future ones.

Indebtedness is a stressful situation affecting families, smaller communities and broader society as well. The planned cooperation of BAGázs and MagNet tries to help people excluded from the banking system. So that a deeper debt trap can be avoided, the goal of this programme is to purchase, partially discharge and reschedule pre-accumulated debts of carefully selected people who have regular income and are willing to undertake bearable repayment. The idea is very innovative with literally no good practice to follow. The research seeks to clarify the pitfalls and opportunities to help the realization of the project and similar future ones.

A certain form of values-based banking concerns the financial inclusion of the poor, e.g. debt settlement. Nevertheless, over-indebtedness and the settlement of existing debts as well as the relevance of such issues to the financial inclusion are not emphasized enough in the literature or in practice. Besides presenting an academic understanding of the phenomena, the goal of the study is to contextualize and interpret the case, to help the realization of currently frozen initiatives and to promote similar future ones.

This paper investigates the development of moralised business ideologies (MBIs) amongst sustainable banks as they navigate social and environmental business prospects.

Empirical evidence is drawn from top-management-level interviews with 16 UK-based small and medium-sized banks that specialise in financing social and environmental projects.

MBIs have emerged in the literature review and empirical data analysis as a new concept taken on by sustainable banks with roots closer to sustainability such as ethical practices, moralised values, sustainable business models and ecological standards. The results confirm that MBIs help banking institutions create a more sustained positive impact in terms of social and environmental business opportunities.

This paper offers novel evidence on the intersection between banking and MBIs, with a focus on social, sustainability and environmental considerations.

The paper’s purpose is to investigate the concept of integrated thinking as part of the International Integrated Reporting Council’s (IIRC’s) Integrated Reporting (<IR>) framework. It explores integrated thinking as a cultural control and analyses how it operates.

The paper presents a case study of ResBank (a pseudonym), a small Australian bank, which is participating in the IIRC’s <IR> Pilot Programme Business Network. ResBank issued its first integrated report in 2012. Using semi-structured interviews, we examine whether integrated thinking develops as espoused by the IIRC.

In ResBank’s case, we find that the responsible banking culture that was in place prior to joining the Pilot Programme is a stronger cultural control, alongside personnel, results and action controls. The implication for the IIRC is that integrated thinking clashes with the existing organisational culture rather than driving a new organisational culture.

If integrated thinking is to prevail, it may become a source of inertia rather than change because it advocates that an entire workforce should think the same way. We also question whether breaking down silos, as advocated by integrated thinking, is necessary across all organisational functions, especially concerning material organisational risks and reputation, because these silos foster independent thinking.

The problem with the arguments proposed by the IIRC is that they aim at a one-size-fits-all approach. Not every organisation has a disconnection between strategy, governance, past performance and future prospects nor do they all have disconnected departments that need reconnecting. Therefore, a fundamental problem with <IR> is that the IIRC argues ‘why’ companies need <IR>, not ‘how’ to implement <IR>, and especially not ‘how’ to operationalise integrated thinking.

The paper is a must-read because it contributes to the growing debate on the benefits of <IR> by examining and critiquing an early adopter’s practice.

The purpose of this paper is to investigate whether levels-classified fair values of US banks based on SFAS 157: Fair Value Measurements, as recognised in the quarterly financial statements of the banks over the period from 2008 until 2015, have predictive value in relation to the banks’ future financial performance measured by operating cash flows and earnings over a three-quarter horizon period. In addition, we consider whether the global financial crisis (GFC) impacted the relationship between SFAS 157–based levels‐classified fair values and bank future financial performance.

We develop hypotheses connecting the net levels-classified bank fair values based on SFAS 157 with banks’ future financial performance. We test the hypotheses by estimating three-period quarters’ ahead forecasting models. We also use these models to test for the impact of the GFC on the relationship between the fair values and future financial performance.

Our findings suggest that the levels-classified net fair values based on SFAS 157 have predictive value in relation to future cash flows for banks. There is significant variation, across the levels, in the predictive value of levels-classified net fair values for future performance. Our findings indicate that the GFC has limited impact on the predictive value for cash flows, but the GFC had a significant adverse impact on earnings, and, with allowance for the effect of the GFC, the Level 2 net fair values have predictive value for the future earnings.

The study provides the first direct empirical evidence on the relationship between the SFAS 157 levels-classified quarterly bank fair values recognised in publicly available financial statements and banks’ future performance. Our results are consistent with the findings from earlier research (Ehalaiye et al., 2017) using annual data disclosed in the supplementary notes to the financial statements of US banks based on SFAS 107. The study, makes a significant contribution to the question of frequency of reporting and to the disclosure vs recognition debate. The study has implications for policy makers, regulators and accounting standards setters such as the Securities and Exchange Commission and the Financial Accounting Standards Board in evaluating the use of fair value measurement in financial reporting.

This paper aims to investigate the influence of Islamic marketing ethics and convergence marketing on competitive advantage and bank performance.

This study is based on a survey of 204 Indonesian branch managers from the Islamic banking industry. Results were produced with the partial least square approach.

Results revealed that Islamic marketing ethics and convergence marketing have sufficient confidence to have significant influences on competitive advantage, producing a positive association with a competitive advantage. However, Islamic marketing ethics and convergence marketing did not influence bank performance directly. Competitive advantage positively mediated the relationship. Furthermore, organizational digital literacy did not moderate the relationship between convergence marketing and bank performance.

This study contributes to the conceptualization of convergence marketing and the identification of its effects on competitive advantage and bank performance. The identification of convergence marketing in this dissertation contains dimensions of mobile, security, foreign currency, holistic and interactivity as different aspects from the steps of Islamic banks to digitize their services to the internet in a single application. The results also indicate that convergence marketing does not have a direct effect on bank performance but has an indirect effect through competitive advantage. Convergence marketing must first create a bank advantage over its competitors to have a good effect on bank performance.

This study offers many opportunities for Islamic bank marketers to improve performance. Many Islamic banks currently do not implement Islamic marketing ethics consistently and thoroughly. The results of this study encourage Islamic banks by showing that the more intensive and consistent they are in implementing Islamic marketing ethics, the better their competitive advantage and the higher the performance. This effort can be done in various ways, such as offering tariffs/ratios of services transparently to customers, not exaggerating the benefits of the products offered to distort customer expectations, building brands that can strengthen customer confidence in Islamic banks and only offering products and services with high-quality standards.

This study uses a sample of Islamic banking so that it is still limited to certain types of banks. Future research needs to conduct model testing in different contexts such as conventional banking. In addition, further research needs to use the capabilities or capabilities of bank IT as a moderator in the effect of convergence marketing on bank performance. Future research also needs to control for more variables and use a scale that is more complex than the binary scale (for example, the percentage of share ownership or territory in the scope of the province or district/city).

This research views the Islamic bank competitiveness through the lenses of Islamic ethical theory and convergence marketing theory.