The influence of corporate governance structure on sustainability reporting in Malaysia

Amira, Jamil and Mohd Ghazali, Nazli Anum and Puat Nelson, Sherliza (2020) The influence of corporate governance structure on sustainability reporting in Malaysia. Social Responsibility Journal. pp. 1-31. ISSN 1747-1117 E-ISSN 1758-857X (In Press)

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Abstract

Purpose – Following the introduction of the revised Malaysian Code on Corporate Governance in 2012 (MCCG 2012), this study investigates the influence of corporate governance structure on the quality of sustainability reporting from the perspectives of agency theory and resource dependence theory. Design/methodology/approach – Based on analysis of 126 firms’ annual reports for the year ended 2010 and 2014, this study analyses sustainability reporting quality before introduction of MCCG 2012 (year ended 2010) and after (year ended 2014). Findings – The findings of the study show that there was a significant increase in the quality of sustainability reporting from 2010 to 2014. Results from multiple regression analyses indicate that the number of sustainability-related training attended by the board of directors and percentage of directors with sustainability-related experience have a significant impact on the quality of sustainability reporting. Practical implications – Observations from the study provide useful insights into the importance of appointment of directors with sustainability-related experience as part of the criteria for directors’ appointment. Moreover, the board of directors are encouraged to attend sustainability-related training to help firms improve sustainability practices and reporting. Social implications - The increase in the quality of sustainability reporting indicates that companies are committed in ensuring that environmental degradation is put at the minimum level if not eliminated. It appears that companies are embracing the concept of sustainability reporting and hence contributing to improving and enhancing social well - being. Originality/value – This study contributes to the discussion of both internal mechanisms (board independence and board capital) and external mechanisms (compliance to the code on corporate governance) of corporate governance structure on the quality of sustainability reporting. The findings can be used to identify necessary mechanisms that should be enhanced to strengthen the practice of sustainability reporting.

Item Type:	Article (Journal)
Additional Information:	3486/91938
Uncontrolled Keywords:	Sustainability reporting, Corporate governance, Board of directors, Sustainability-related experience
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > H Social Sciences (General) > H96 Public policy (General), Policy sciences
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Accounting Kulliyyah of Economics and Management Sciences
Depositing User:	Sherliza Puat Nelson
Date Deposited:	06 Sep 2021 22:34
Last Modified:	06 Sep 2021 22:34
URI:	http://irep.iium.edu.my/id/eprint/91938

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