Social Disclosure and Governance Among Malaysian Corporations
Abstract
The objective of the study is to examine the relationship between corporate governance mechanisms and corporate social responsibilities (CSR) disclosure among Malaysian leading corporations on Bursa Malaysia. The research is carried out due to the relatively low awareness and inconsistency with respect to the CSR disclosure particularly in Malaysia. The study uses the annual reports and data stream to collect the data of 50 Malaysian top corporations on Bursa Malaysia in 2015. The multivariate analysis suggests that the audit committee expertise and the foreign shareholding have significant relationships with CSR disclosure in Malaysia. In this sense, having a clear understanding on the corporate governance characteristics is perceived as able to increase the disclosure of CSR information to the respected stakeholders. The study therefore contributes to the theories, literature and practice. In this perspective, the study highlights the importance of having a sound corporate governance structure in enhancing CSR information disclosure. In overall, the results of the study can be regarded as valuable to the corporate players, corporations, relevant statutory authorities as well as other related parties.
References
Ali, A. R. H., Zain, M. M., Abidin, Z. Z., & Embi, R. (2015). The level of knowledge of corporate governance in federal statutory bodies in Malaysia. Procedia Economics and Finance, 28, 170-175. https://doi.org/10.1016/S2212-5671(15)01097-7
Abbott, W. F., & Monsen, R. J. (1979). On the measurement of corporate social responsibility: Self-reported disclosures as a method of measuring corporate social involvement. Academy of Management Journal, 22(3), 501-515. https://doi.org/10.2307/255740
Akhtaruddin, M., & Haron, H. (2010). Board ownership, audit committees' effectiveness and corporate voluntary disclosures. Asian Review of Accounting, 18(1), 68-82. https://doi.org/10.1108/13217341011046015
Anas, A., Abdul Rashid, H. M., & Annuar, H. A. (2015). The effect of award on CSR disclosures in annual reports of Malaysian PLCs. Social Responsibility Journal, 11(4), 831-852. https://doi.org/10.1108/SRJ-02-2013-0014
Annuar, H. A. (2015). Changes in ownership forms and role of institutional investors in governing public companies in Malaysia: A research note. Journal of Accounting & Organizational Change, 11(4), 455-475. https://doi.org/10.1108/JAOC-08-2012-0068
Appuhami, R., & Tashakor, S. (2017). The impact of audit committee characteristics on CSR disclosure: An analysis of Australian firms. Australian Accounting Review, 27(4), 400-420. https://doi.org/10.1111/auar.12170
Arena, C., Liong, R., & Vourvachis, P. (2018). Carrot or stick: CSR disclosures by Southeast Asian companies. Sustainability Accounting, Management and Policy Journal, 9(4), 422-454. https://doi.org/10.1108/SAMPJ-06-2016-0037
Branco, M. C., & Rodrigues, L. L. (2008). Social responsibility disclosure: A study of proxies for the public visibility of Portuguese banks. The British Accounting Review, 40(2), 161-181. https://doi.org/10.1016/j.bar.2008.02.004
Brown, N., & Deegan, C. (1998). The public disclosure of environmental performance information-A dual test of media agenda setting theory and legitimacy theory. Accounting and Business Research, 29(1), 21-41. https://doi.org/10.1080/00014788.1998.9729564
Chambers, E., Chapple, W., Moon, J., & Sullivan, M. (2003). CSR in Asia: A seven country study of CSR web site reporting (Research paper series ISSN 1479-5124). International Centre for Corporate Social Responsibility (ICCSR), Nottingham University Business School.
Chapple, W., Moon, J., Herzig, C., & Slager, R. (2014). The dynamics of corporate social responsibility in Asia: A 6-country study. In Academy of Management Proceedings (Vol. 2014, No.1, p. 16813). Academy of Management. https://doi.org/10.5465/ambpp.2014.16813abstract
Chen, J. C., & Roberts, R. W. (2010). Towards a more coherent understanding of the organization society relationship. Journal of Business Ethics, 97(4), 651-665. https://doi.org/10.1007/s10551-010-0531-0
Clikeman, P. M. (2004). Socially conscious corporation: how can you reap the rewards of good corporate citizenry? Be one--and broadcast it!. Strategic Finance, 8(10), 22-27.
Darus, F., Mad, S., & Yusoff, H. (2014). The importance of ownership monitoring and firm resources on corporate social responsibility (CSR) of financial institutions. Procedia-Social and Behavioral Sciences, 145, 173-180. https://doi.org/10.1016/j.sbspro.2014.06.024
Deegan, C., & Gordon, B. (1996). A study of the environmental disclosure practices of Australian corporations. Accounting and Business Research, 26(3), 187-199. https://doi.org/10.1080/00014788.1996.9729510
De Vaus, D. (2002). Analyzing social science data: 50 key problems in data analysis. SAGE Publications.
Elsayed, K. (2007). Does CEO duality really affect corporate performance?. Corporate Governance: An International Review, 15(6), 1203-1214. https://doi.org/10.1111/j.1467-8683.2007.00641.x
Eng, L. L., & Mak, Y. T. (2003). Corporate governance and voluntary disclosure. Journal of Accounting and Public Policy, 22(4), 325-345. https://doi.org/10.1016/S0278-4254(03)00037-1
Ghazali, N. A. M. (2007). Ownership structure and corporate social responsibility disclosure: Some Malaysian evidence. Corporate Governance: The International Journal of Business in Society, 7(3), 251-266. https://doi.org/10.1108/14720700710756535
Ghazali, N. A. M., & Weetman, P. (2006). Perpetuating traditional influences: Voluntary disclosure in Malaysia following the economic crisis. Journal of International Accounting, Auditing and Taxation, 15(2), 226-248. https://doi.org/10.1016/j.intaccaudtax.2006.08.001
Giannarakis, G. (2013). Determinants of corporate social responsibility disclosures: The case of the US companies. International Journal of Information Systems and Change Management, 6(3), 205-221. https://doi.org/10.1504/IJISCM.2013.058325
Giannarakis, G., Konteos, G., & Sariannidis, N. (2014). Financial, governance and environmental determinants of corporate social responsible disclosure. Management Decision, 52(10), 1928-1951. https://doi.org/10.1108/MD-05-2014-0296
Gul, F. A., & Leung, S. (2004). Board leadership, outside directors' expertise and voluntary corporate disclosures. Journal of Accounting and Public Policy, 23(5), 351-379. https://doi.org/10.1016/j.jaccpubpol.2004.07.001
Hackston, D., & Milne, M. J. (1996). Some determinants of social and environmental disclosures in New Zealand companies. Accounting, Auditing & Accountability Journal, 9(1), 77-108. https://doi.org/10.1108/09513579610109987
Haji, A. A. (2013). Corporate social responsibility disclosures over time: Evidence from Malaysia. Managerial Auditing Journal, 28(7), 647-676. https://doi.org/10.1108/MAJ-07-2012-0729
Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Public Policy, 24(5), 391-430. https://doi.org/10.1016/j.jaccpubpol.2005.06.001
Hibbitt, C. J. (2004). External environmental disclosure and reporting by large European companies: An economic, social, and political analysis of managerial behaviour. Rozenberg Publishers. https://doi.org/10.1080/0969160X.2004.9651708
Isa, M. A., & Muhammad, S. (2015). The impact of board characteristics on corporate social responsibility disclosure: Evidence from Nigerian food product firm. International Journal of Management Science and Business Administration, 1(12), 34-45. https://doi.org/10.18775/ijmsba.1849-5664-5419.2014.112.1004
Jensen, M. C. (2010). The modern industrial revolution, exit, and the failure of internal control systems. Journal of Applied Corporate Finance, 22(1), 43-58. https://doi.org/10.1111/j.1745-6622.2010.00260.x
Jizi, M. I., Salama, A., Dixon, R., & Stratling, R. (2014). Corporate governance and corporate social responsibility disclosure: Evidence from the US banking sector. Journal of Business Ethics, 125(4), 601-615. https://doi.org/10.1007/s10551-013-1929-2
Juhmani, O. (2013). Ownership structure and corporate voluntary disclosure: Evidence from Bahrain. International Journal of Accounting and Financial Reporting, 3(2), 133-148. https://doi.org/10.5296/ijafr.v3i2.4088
Khan, H. U. Z. (2010). The effect of corporate governance elements on corporate social responsibility (CSR) reporting: Empirical evidence from private commercial banks of Bangladesh. International Journal of Law and Management, 52(2), 82-109. https://doi.org/10.1108/17542431011029406
Lipton, M., & Lorsch, J. W. (1992). A modest proposal for improved corporate governance. The Business Lawyer, 48(1) 59-77.
Marsidi, A., Annuar, H. A., & Abdul Rahman, A. R. (2018). The impact of corporate governance on the financial, social and governance disclosures at Islamic banks in Malaysia. Journal of Islamic Finance, 7(1), 9-25. https://doi.org/10.12816/0051131
Matuszak, L., Różańska, E., & Macuda, M. (2019). The impact of corporate governance characteristics on banks' corporate social responsibility disclosure: Evidence from Poland. Journal of Accounting in Emerging Economies, 9(1), 75-102. https://doi.org/10.1108/JAEE-04-2017-0040
McMullen, D. A. (1996). Audit committee performance: An investigation of the consequences associated with audit committees. Auditing: A Journal of Practice and Theory, 15(1), 87-96, 98, 100-103. https://www.proquest.com/scholarly-journals/audit-committee-performance-investigation/docview/216734161/se-2
Mustafa, S. A., Othman, A. R., & Perumal, S. (2012). Corporate social responsibility and company performance in the Malaysian context. Procedia-Social and Behavioral Sciences, 65, 897-905. https://doi.org/10.1016/j.sbspro.2012.11.217
Patten, D. M. (1991). Exposure, legitimacy, and social disclosure. Journal of Accounting and Public Policy, 10(4), 297-308. https://doi.org/10.1016/0278-4254(91)90003-3
Ramasamy, B., & Ting, H. W. (2004). A comparative analysis of corporate social responsibility awareness: Malaysian and Singaporean firms. The Journal of Corporate Citizenship, (13), 109-123. https://doi.org/10.9774/GLEAF.4700.2004.sp.00013
Razak, S. E. A., & Mustapha, M. (2013). Corporate social responsibility disclosures and board structure: Evidence from Malaysia. Sains Humanika, 64(3), 73-80. https://doi.org/10.11113/jt.v64.2273
Said, R., Hj Zainuddin, Y., & Haron, H. (2009). The relationship between corporate social responsibility disclosure and corporate governance characteristics in Malaysian public listed companies. Social Responsibility Journal, 5(2), 212-226. https://doi.org/10.1108/17471110910964496
Securities Commission Malaysia. (2021). Malaysian code on corporate governance (As at 28 April 2021). Retrieved December 12, 2022, from https://www.sc.com.my/api/documentms/download.ashx?id=239e5ea1-a258-4db8-a9e2-41c215bdb776
Siregar, V. S., & Bachtiar, Y. (2010). Corporate social reporting: Empirical evidence from Indonesia stock exchange. International Journal of Islamic and Middle Eastern Finance and Management, 3(3), 241-252. https://doi.org/10.1108/17538391011072435
Stuebs, M., & Sun, L. (2015). Corporate governance and social responsibility. International Journal of Law and Management, 57(1), 38-52. https://doi.org/10.1108/IJLMA-04-2014-0034
Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571-610. https://doi.org/10.2307/258788
Sufian, M. A., & Zahan, M. (2013). Ownership structure and corporate social responsibility disclosure in Bangladesh. International Journal of Economics and Financial Issues, 3(4), 901-909.
Taylor, D. W., Sulaiman, M., & Sheahan, M. (2001). Auditing of environmental management systems: A legitimacy theory perspective. Managerial Auditing Journal, 16(7), 411-422. https://doi.org/10.1108/02686900110398331
Thompson, P., & Zakaria, Z. (2004). Corporate social responsibility reporting in Malaysia: Progress and prospects. The Journal of Corporate Citizenship, (13), 125-136. https://doi.org/10.9774/GLEAF.4700.2004.sp.000014
Vance, S. C. (1975). Are socially responsible corporations good investment risks. Management review, 64(8), 19-24.
Vourvachis, P., Woodward, T., Woodward, D. G., & Patten, D. M. (2016). CSR disclosure reactions to major accidents: A legitimacy-based exploration. Sustainability Accounting, Management and Policy Journal, 7(1), 26-43. https://doi.org/10.1108/SAMPJ-12-2014-0080
Vourvachis, P. & Woodward, T. (2015). Content analysis in social and environmental reporting research: trends and challenges. Journal of Applied Accounting Research, 16(2), 166-195. https://doi.org/10.1108/JAAR-04-2013-0027
Watson, A., Shrives, P., & Marston, C. (2002). Voluntary disclosure of accounting ratios in the UK. The British Accounting Review, 34(4), 289-313. https://doi.org/10.1006/bare.2002.0213
Copyright (c) 2022 UNIMAS Publisher
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.
