**6.4 Result discussion**

This study yields that board elements, such as board size (BDSIZE) and board independence, (BDIND) are significantly and positively associated with CSR expenditure by banks, implying that banks with large boards and boards with more independent directors tend to spend more money on CSR activities. This result strongly supports our hypothesis, which outlines that board size and independence would promote the CSR activities of the banks. Also, this result supports the stakeholder theory and legitimacy theory in that banks in developing economies focus on creating long-term relationships with different stakeholders to achieve lending supremacy on the one hand and obtain legitimacy on the other hand by catering to the needs of society. A large board tends to have more independent directors with diverse backgrounds and expertise, thereby increasing efficiency in monitoring managerial opportunism. Thus, independent directors can direct the firm's management to spend money on CSR activities to enhance social capital. Arguably, the long-term success of the banking business depends not only on increasing transactional capital but also on improving the relational capital, suggesting that banks should undertake more CSR activities. This is particularly true for the banking sector in developing economies

because this sector takes the prime responsibility for catering to the financial needs of the country. Our findings suggest that banks should hire more independent directors to enhance social and transactional capital to legitimate their activities by the societal forces. This finding supports the previous results [11–13, 35, 36]. However, it disapproves the earlier findings of Uddin and Choudhury [41] that agued independent directors may not function accurately in developing economies due to pressure from owner-directors and fear of losing their jobs. We note that, in Bangladesh, factors, such as corruption, poor governance, and family-led politics, provide strong incentives to firm managers to abuse financial resources. In such an environment, a larger board and a board with more independent directors can effectively monitor the guile behavior of the management, which in turn directs management to discharge more funds on social and environmental purposes to get public legitimacy.

An intriguing finding of the study is that female directors on the board negate CSR spending by banks, indicating the decrease of female representation in the top echelon positions to enhance CSR activities. This result contradicts the view that women are more sensitive to social and environmental issues so that they would raise their voices on the quantity, quality, and transparency of CSR disclosure. Also, this result is contrary to the earlier findings that claim female executives can enhance CSR expenditures [43, 44]. In this pretext, we note that female representation on the board is minimal in Bangladesh; hence, they are likely to be the free-rider to protect their jobs. This is because Bangladesh bank encourages female entrepreneurship with the support of its development partner, the Japan International Cooperation Agency (JICA), and Asian Development Banks (ADB) by creating a refinancing scheme and allocating 15% of the fund to female entrepreneurs. Simultaneously, many NGOs are working on improving the health and education of female entrepreneurs, besides the humanitarian activities. As a result, the participation of female executives in CSR activities is likely to be increased in Bangladesh. Thus, the negative connection between board gender and CSR spending by banks should not be generalized to other economies, and it warrants further investigation. Another outcome of this study is no significant relationship between the number of board meetings and CSR spending by banks. This is plausible for banks in developing economies where board members are likely to discuss critical business issues other than CSR activities whenever they sit for additional board meetings. However, this issue remains a point of debate.

For control variables, we find that bank size (TA) is significantly related to CSR spending by banks. This result is logical because larger banks can allocate more funds to CSR activities than smaller, financially weak banks. This finding approves the previous results of Muttakin and Subramaniam and Hu et al. [12, 49]. Also, the positive link between leverage and CSR spending is quite plausible because the banking industry is a highly leveraged sector where success depends on relational capital and reputation, which eventually influences CSR spending by banks. Also, Bangladesh Bank firmly guides the banking system of Bangladesh for allocating CSR expenditures and disclosure of CSR information in a timely fashion to perform social obligations of banks and legitimate banking activities by the society, resulting in a positive association between CSR spending and leverage. However, this result contradicts the earlier findings [51] that note a negative relationship between CSR and leverage. Finally, we find that bank profitability is not an essential factor for CSR spending by banks in Bangladesh. This may happen because CSR spending by banks is no longer voluntary in Bangladesh. Instead, it is a direct expenditure guided by Bangladesh bank. This issue warrants further investigation. Also, we find that the age of the bank is inversely related to the

promotion of CSR activities. This result supports the earlier findings [51]. However, it disapproves of the view that banks with longer years in operation tend to accumulate financial resources and experience necessary to allocate funds for CSR activities. Hence, this remains another issue for further research.
