Corporate Governance and Corporate Environmental Disclosures of Public-Listed Companies in Bursa Malaysia
Keywords:
corporate environmental disclosure, corporate governance, Bursa Malaysia, annual reports
Abstract
The purpose of this study is to further increase the understanding of disclosure practices and the interrelationship between corporate governance (CG) and corporate environmental disclosures (CED) of companies on the Main Boards of Bursa Malaysia. The study adopts a quantitative analysis approach by examines the 2018 annual reports of 251 companies to determine the amount of environmental disclosure and compared with various corporate governance measures. Regression analysis was used to examine the relationship between CED and independent variables of CG namely independent non-executive directors, Muslim chairman/president of the board and Muslim ownership structures. Analysis found a significant relationship between the extent of environmental disclosure with independent non-executive directors, Muslim chairman/president of the board. In contrast, the extent of CED is insignificant with relation of Muslim ownership structures. The results indicate there have been improvements of CED over the years and could useful to provide the evidence to regulatory bodies to look further and consideration in identifying the elements of corporate governance that will enhance the CED.
References
Aljifri, K., & Hussainey, K. (2007). The determinants of forward-looking information in annual reports of UAE companies. Managerial Auditing Journal, 22 (9), 881-894.doi: 10.1108/02686900710829390.
Alrazi, B., Sulaiman, M., & Nik Ahmad, N.N. (2009). A longitudinal examination of environmental reporting practices in Malaysia. Gadjah Mada International Journal of Business, 11 (1), 37-72.
Andrew, J. (2003). Corporate governance: the environment and the internet. Electronic Green Journal, 19, 25-30.
Bank Negara Malaysia. (1999). The central bank and the financial system in Malaysia. Kuala Lumpur: Bank Negara Malaysia.
Banks, E. (2004). Corporate governance: Financial responsibility, control and ethics. New York: Palgrave MacMillan.
Barako, D., Hancock, P., & Izan, H. (2006). Factors influencing voluntary corporate disclosure by Kenyan companies. Corporate Governance: An International Review, 14(2), 107-125. doi: 10.1111/j.1467-8683.2006.00491.x
Baydoun, N., & Willett, R. (1997). Islam and accounting: ethical issues in the presentation of financial information. Accounting, Commerce & Finance: The Islamic Perspective Journal, 1(1), 1-25.
Bewley, K., & Li, Y. (2000). Disclosure of environmental information by Canadian manufacturing companies: A voluntary disclosure perspective. Advances in Environmental Accounting and Management, 1, 201-26. doi: 10.1016/S1479-3598(00)01011-6.
Bird, A., Buchanan, R., & Rogers, P. (2004). The seven habits of an effective board. European Business Journal, 16(3), 128-132.
Bliss, M., & Balachandran, J. (2003). CEO duality, audit committee independence and voluntary disclosures in Malaysia. Paper presented at the International Conference on Quality Financial Reporting and Corporate Governance-Building Public Trust, Integrity and Accountability. Kuala Lumpur.
Brammer, S., & Pavelin, S. (2008). Factors influencing the quality of corporate environmental disclosure. Business Strategy and the Environment, 17, 120-136.doi: 10.1002/bse.506.
Buniamin, S., Alrazi, B., Johari, N. H., & Rahman, N. R. (2011). Corporate governance practices and environmental reporting of companies in Malaysia: Finding possibilities of double thumbs up. Jurnal Pengurusan. 32, 55-71.
Burgess, Z., & Tharenou, P. (2002). Women board of directors: Characteristics of the few. Journal of Business Ethics, 37, 39-49.
Bursa Malaysia (2009). CSR framework for Malaysian PLCs. Retrieved from http://www.bursamalaysia.com.my.
Coombes, P., & Wong, S. C. (2004). Chairman and CEO-one job or two ? SSRN eLibrary. Retrieved from http://papers.ssrn.com/so13/papers.cfm? abstract_id=897485=.
Chau, G. K., & Gray, S. J. (2002). Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore. The International Journal of Accounting,37, 247-265. doi:org/10.1016/j.intacc.2006.07.00.
Cheng, E. C. M., & Courtenay, S. M. (2006). Board composition, regulatory regime and voluntary disclosure. The International Journal of Accounting, 41(3), 262-289.doi: org/10.1016/j.intacc.2006.07.00.
Deegan, C., & Blomquist, C. (2006). Stakeholder influence on corporate reporting: an exploration of the interaction between WWF-Australia and the Australian minerals industry. Accounting, Organizations and Society, 31(4/5), 343-372. doi: org/10.1016/j.aos.2005.04.001.
De Villiers, C., & Staden, C. (2006). Can less environmental disclosure have a legitimizing effect? Evidence from Africa. Accounting, Organizations and Society, 31(8), 763-781. doi: org/10.1016/j.aos.2006.03.001.
Economic Planning Unit (2003). Third Outline Perspective Plan, 1990-2005. Retrieved from http://www.epu.gov.my.
Environmental Resources Management Malaysia. (2002). The state of corporate environmental reporting in Malaysia. Certified Accountants Educational Trust, London.
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26, 1-32.
Gandia, J. L. (2008). Determinants of internet-based corporate governance disclosures by Spanish listed companies. Online Information Review, 32(6), 791-817. doi:10.1108/14684520810923944.
Gibson, K., & O’Donovan, G. (2007). Corporate governance and environmental reporting: An Australian study. Corporate Governance, 1, 944-956. doi: 10.1111/j.1467-8683.2007.00615.x
Gul, F., & Leung, S. (2004). Board leadership, outside directors’ expertise and voluntary corporate disclosures. Journal of Accounting and Public Policy, 23(5), 351-379.
Haigh, M., & Jones, M. T. (2006). The drivers of corporate social social responsibility: A critical review. The Business Review, Cambridge, 5(2), 245-251.
Halme, M., & Huse, M. (1997). The influence of corporate governance, industry and country factors on environmental reporting. Scandinavian Journal of Management, 13, 137-157. doi: org/10.1016/S0956-5221(97)00002.
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.doi: 10.1016/j.jaccpubpol.2005.06.001.
Haniffa, R. M., & Cooke, T. E. (2002). Culture, corporate governance and disclosure in Malaysian corporations. Abacus, 38(3), 317-349.doi: 10.1111/1467-6281.00112.
Haniffa, R., & Hudaib, M. A. (2002). A theoretical framework for the development of the Islamic perspective of accounting. Accounting, Commerce & Finance: The Islamic Perspective Journal, 6(1/2), 1-71.
Healy, P. M. & Palepu, K. G. (2001). Information asymmetry, corporate disclosure and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1-3), 405-440. doi: org/10.1016/SO165-4101(01)00018.
Hedberg, C. J., & von Malmborg, F. (2003). The global reporting initiative and corporate sustainability reporting in Swedish companies. Corporate Social Responsibility and Environmental Management, 10, 153-164. doi:10.1002/csr.38.
Herbohn, K. (2005). A full cost environmental accounting experiment. Accounting, Organizations and Society, 30(6), 519-536. doi: org/10.1016/j.aos.2005.01.001.
Ho, S. M. & Wong, K. S. (2001). A study of the relationship between corporate governance structure and the extent of voluntary disclosure. Journal of International Accounting, Auditing & Taxation, 10, 139-156. doi: 10.111/1467-646X-00067.
Hossain, M., & Hammami, H. (2009). Voluntary disclosure in the annual reports of an emerging country:The case of Qatar. Advances in International Accounting, 25, 255-265. doi: org/10.1016/j.adiac.2009.08.002.
Huang, C. L., & Kung, F. H. (2010). Drivers of environmental disclosure and stakeholder expectation: Evidence from Taiwan. Journal of Business Ethics, 96, 435-451. doi: 10.1007/s10551-010-0476- 3.
Hui, W. L., & Jin, H. C. (2008). Ownership structure and firm performance: an empirical research on Chinese public companies. Economic Research Journal, 6(4), 32-45.
Jinfeng, Z., & Huifeng, X. (2009). Empirical research on factors influencing level of environmental protection information disclosure in annual reports by listed companies. Chinese Journal of Population, 7(1), 15-25. doi:10.1080/10042857.2009.10684905.
Jomo, K. S. (2001). Malaysian eclipse, economy crisis and recovery. London: Zed Books
Joshi, P. L., & Gao, S. S. (2009). Multinational corporations’ corporate social and environmental disclosures (CSED) on web sites. International Journal of Commerce and Management, 19(1), 27-44. doi:10.1108110569210910939654.
Keown, A. J., John, D., Martin, J., & Petty, W. (2008). Foundation of Finance: The Logic and Practice of Financial Management (6th Edition), New Jersey: Pearson International Edition
Lehman, E., & Weigand, J. (2000). Does the governed corporation perform better? Governance structure and corporate performance in Germany. European Economic Review, 4(1), 157-195. doi: 10.1023/A:1009896709767.
Leung, S., & Horwitz, B. (2004). Director ownership and voluntary segment disclosure: Hong Kong evidence. Journal of International Financial Management and Accounting, 15, 235-260. doi: 10.1111/j. 1467-646x.2004.00109.x
Mishkins, F.S., & Eakins, S.G. (2009). Financial Markets and Institutions. 6th Edition. Pearson International Edition. Prentice Hall.
News Straits Times. (2006). When a video rocked the nation. December 26, p. 16.
Nik Ahmad, N. N., Sulaiman, M., & Siswantoro, D. (2003). Corporate social responsibility disclosure in Malaysia: An analysis of annual reports of KLSE listed companies. IIUM Journal of Economics and Management , 11(1).
Nik Ahmad, N. N., & Sulaiman M. (2002). Environmental disclosures in Malaysian annual reports: A study of the construction and industrial products sectors. Papers presented at the European Accounting Association 25th Annual Congress, Copenhagen Business School, Denmark.
Othman, R., & Ameer, R. (2009). Environmental disclosures of palm oil plantation companies in Malaysia: A tool for stakeholder engagement. Corporate Social Responsibility and Environmental Management, 17, 52-62. doi: 10.1002/csr.218.
Ousama, A. A., & Fatima, A. H. (2010). Voluntary disclosure by Shariah approved companies: An exploratory study. Journal of Financial Reporting and Accounting, 8(1), 35-49.doi: 10.1108/19852511011055943.
Pahuja, S. (2009). Relationship between environmental disclosures and corporate characteristics: A study of large manufacturing companies in India. Social Responsibility Journal, 5(2), 227-244.doi: 10.1108/17471110910964504.
Rezaee, Z., Szendi, J. Z., & Aggarwal, R. (1999). Corporate governance and accountability for environmental concerns. Managerial Auditing Journal, 10(8), 27-33.doi:10. 1108/02686909510093598.
Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms. Journal of Business Ethics, 88(2), 351-366. doi: 10.1007/s10551-008-9968-9.
Salma, D. A. (2010). Social and environmental reporting in the annuals reports of large companies in France. Accounting and Management Information Systems, 9(1), 22-44.
Sekaran, U. (2003). Research Methodology For Business: A Skill Building Approach (4th Edition). New Jersey: John Wiley & Sons Inc.
Sinclair-Desgagne, B., & Gozlan, E. (2003). A theory of environmental risk disclosures. Journal of Environmental Economics and Management, 45, 377-393. doi: org/10.1016/S0095-0696(02)00056.
Ullmann, A. E. (1985). Data in search of a theory: A critical examination of the relationships among social performance, social disclosure and economic performance of US Firms. Academy of Management Review, 10(3).
Wong, S. C., Jomo, K. S., & Chin, K. F. (2011). Malaysian “Bail Outs”? Capital controls, restructuring and recovery. Singapore: University Press.
Yusoff, H., & Lehman, G. (2009). Corporate environmental reporting through the lens of Semiotics. Asian Review of Accounting, 17(3), 226-246.doi: 10.1108/13217340910991938.
Alrazi, B., Sulaiman, M., & Nik Ahmad, N.N. (2009). A longitudinal examination of environmental reporting practices in Malaysia. Gadjah Mada International Journal of Business, 11 (1), 37-72.
Andrew, J. (2003). Corporate governance: the environment and the internet. Electronic Green Journal, 19, 25-30.
Bank Negara Malaysia. (1999). The central bank and the financial system in Malaysia. Kuala Lumpur: Bank Negara Malaysia.
Banks, E. (2004). Corporate governance: Financial responsibility, control and ethics. New York: Palgrave MacMillan.
Barako, D., Hancock, P., & Izan, H. (2006). Factors influencing voluntary corporate disclosure by Kenyan companies. Corporate Governance: An International Review, 14(2), 107-125. doi: 10.1111/j.1467-8683.2006.00491.x
Baydoun, N., & Willett, R. (1997). Islam and accounting: ethical issues in the presentation of financial information. Accounting, Commerce & Finance: The Islamic Perspective Journal, 1(1), 1-25.
Bewley, K., & Li, Y. (2000). Disclosure of environmental information by Canadian manufacturing companies: A voluntary disclosure perspective. Advances in Environmental Accounting and Management, 1, 201-26. doi: 10.1016/S1479-3598(00)01011-6.
Bird, A., Buchanan, R., & Rogers, P. (2004). The seven habits of an effective board. European Business Journal, 16(3), 128-132.
Bliss, M., & Balachandran, J. (2003). CEO duality, audit committee independence and voluntary disclosures in Malaysia. Paper presented at the International Conference on Quality Financial Reporting and Corporate Governance-Building Public Trust, Integrity and Accountability. Kuala Lumpur.
Brammer, S., & Pavelin, S. (2008). Factors influencing the quality of corporate environmental disclosure. Business Strategy and the Environment, 17, 120-136.doi: 10.1002/bse.506.
Buniamin, S., Alrazi, B., Johari, N. H., & Rahman, N. R. (2011). Corporate governance practices and environmental reporting of companies in Malaysia: Finding possibilities of double thumbs up. Jurnal Pengurusan. 32, 55-71.
Burgess, Z., & Tharenou, P. (2002). Women board of directors: Characteristics of the few. Journal of Business Ethics, 37, 39-49.
Bursa Malaysia (2009). CSR framework for Malaysian PLCs. Retrieved from http://www.bursamalaysia.com.my.
Coombes, P., & Wong, S. C. (2004). Chairman and CEO-one job or two ? SSRN eLibrary. Retrieved from http://papers.ssrn.com/so13/papers.cfm? abstract_id=897485=.
Chau, G. K., & Gray, S. J. (2002). Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore. The International Journal of Accounting,37, 247-265. doi:org/10.1016/j.intacc.2006.07.00.
Cheng, E. C. M., & Courtenay, S. M. (2006). Board composition, regulatory regime and voluntary disclosure. The International Journal of Accounting, 41(3), 262-289.doi: org/10.1016/j.intacc.2006.07.00.
Deegan, C., & Blomquist, C. (2006). Stakeholder influence on corporate reporting: an exploration of the interaction between WWF-Australia and the Australian minerals industry. Accounting, Organizations and Society, 31(4/5), 343-372. doi: org/10.1016/j.aos.2005.04.001.
De Villiers, C., & Staden, C. (2006). Can less environmental disclosure have a legitimizing effect? Evidence from Africa. Accounting, Organizations and Society, 31(8), 763-781. doi: org/10.1016/j.aos.2006.03.001.
Economic Planning Unit (2003). Third Outline Perspective Plan, 1990-2005. Retrieved from http://www.epu.gov.my.
Environmental Resources Management Malaysia. (2002). The state of corporate environmental reporting in Malaysia. Certified Accountants Educational Trust, London.
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26, 1-32.
Gandia, J. L. (2008). Determinants of internet-based corporate governance disclosures by Spanish listed companies. Online Information Review, 32(6), 791-817. doi:10.1108/14684520810923944.
Gibson, K., & O’Donovan, G. (2007). Corporate governance and environmental reporting: An Australian study. Corporate Governance, 1, 944-956. doi: 10.1111/j.1467-8683.2007.00615.x
Gul, F., & Leung, S. (2004). Board leadership, outside directors’ expertise and voluntary corporate disclosures. Journal of Accounting and Public Policy, 23(5), 351-379.
Haigh, M., & Jones, M. T. (2006). The drivers of corporate social social responsibility: A critical review. The Business Review, Cambridge, 5(2), 245-251.
Halme, M., & Huse, M. (1997). The influence of corporate governance, industry and country factors on environmental reporting. Scandinavian Journal of Management, 13, 137-157. doi: org/10.1016/S0956-5221(97)00002.
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.doi: 10.1016/j.jaccpubpol.2005.06.001.
Haniffa, R. M., & Cooke, T. E. (2002). Culture, corporate governance and disclosure in Malaysian corporations. Abacus, 38(3), 317-349.doi: 10.1111/1467-6281.00112.
Haniffa, R., & Hudaib, M. A. (2002). A theoretical framework for the development of the Islamic perspective of accounting. Accounting, Commerce & Finance: The Islamic Perspective Journal, 6(1/2), 1-71.
Healy, P. M. & Palepu, K. G. (2001). Information asymmetry, corporate disclosure and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1-3), 405-440. doi: org/10.1016/SO165-4101(01)00018.
Hedberg, C. J., & von Malmborg, F. (2003). The global reporting initiative and corporate sustainability reporting in Swedish companies. Corporate Social Responsibility and Environmental Management, 10, 153-164. doi:10.1002/csr.38.
Herbohn, K. (2005). A full cost environmental accounting experiment. Accounting, Organizations and Society, 30(6), 519-536. doi: org/10.1016/j.aos.2005.01.001.
Ho, S. M. & Wong, K. S. (2001). A study of the relationship between corporate governance structure and the extent of voluntary disclosure. Journal of International Accounting, Auditing & Taxation, 10, 139-156. doi: 10.111/1467-646X-00067.
Hossain, M., & Hammami, H. (2009). Voluntary disclosure in the annual reports of an emerging country:The case of Qatar. Advances in International Accounting, 25, 255-265. doi: org/10.1016/j.adiac.2009.08.002.
Huang, C. L., & Kung, F. H. (2010). Drivers of environmental disclosure and stakeholder expectation: Evidence from Taiwan. Journal of Business Ethics, 96, 435-451. doi: 10.1007/s10551-010-0476- 3.
Hui, W. L., & Jin, H. C. (2008). Ownership structure and firm performance: an empirical research on Chinese public companies. Economic Research Journal, 6(4), 32-45.
Jinfeng, Z., & Huifeng, X. (2009). Empirical research on factors influencing level of environmental protection information disclosure in annual reports by listed companies. Chinese Journal of Population, 7(1), 15-25. doi:10.1080/10042857.2009.10684905.
Jomo, K. S. (2001). Malaysian eclipse, economy crisis and recovery. London: Zed Books
Joshi, P. L., & Gao, S. S. (2009). Multinational corporations’ corporate social and environmental disclosures (CSED) on web sites. International Journal of Commerce and Management, 19(1), 27-44. doi:10.1108110569210910939654.
Keown, A. J., John, D., Martin, J., & Petty, W. (2008). Foundation of Finance: The Logic and Practice of Financial Management (6th Edition), New Jersey: Pearson International Edition
Lehman, E., & Weigand, J. (2000). Does the governed corporation perform better? Governance structure and corporate performance in Germany. European Economic Review, 4(1), 157-195. doi: 10.1023/A:1009896709767.
Leung, S., & Horwitz, B. (2004). Director ownership and voluntary segment disclosure: Hong Kong evidence. Journal of International Financial Management and Accounting, 15, 235-260. doi: 10.1111/j. 1467-646x.2004.00109.x
Mishkins, F.S., & Eakins, S.G. (2009). Financial Markets and Institutions. 6th Edition. Pearson International Edition. Prentice Hall.
News Straits Times. (2006). When a video rocked the nation. December 26, p. 16.
Nik Ahmad, N. N., Sulaiman, M., & Siswantoro, D. (2003). Corporate social responsibility disclosure in Malaysia: An analysis of annual reports of KLSE listed companies. IIUM Journal of Economics and Management , 11(1).
Nik Ahmad, N. N., & Sulaiman M. (2002). Environmental disclosures in Malaysian annual reports: A study of the construction and industrial products sectors. Papers presented at the European Accounting Association 25th Annual Congress, Copenhagen Business School, Denmark.
Othman, R., & Ameer, R. (2009). Environmental disclosures of palm oil plantation companies in Malaysia: A tool for stakeholder engagement. Corporate Social Responsibility and Environmental Management, 17, 52-62. doi: 10.1002/csr.218.
Ousama, A. A., & Fatima, A. H. (2010). Voluntary disclosure by Shariah approved companies: An exploratory study. Journal of Financial Reporting and Accounting, 8(1), 35-49.doi: 10.1108/19852511011055943.
Pahuja, S. (2009). Relationship between environmental disclosures and corporate characteristics: A study of large manufacturing companies in India. Social Responsibility Journal, 5(2), 227-244.doi: 10.1108/17471110910964504.
Rezaee, Z., Szendi, J. Z., & Aggarwal, R. (1999). Corporate governance and accountability for environmental concerns. Managerial Auditing Journal, 10(8), 27-33.doi:10. 1108/02686909510093598.
Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms. Journal of Business Ethics, 88(2), 351-366. doi: 10.1007/s10551-008-9968-9.
Salma, D. A. (2010). Social and environmental reporting in the annuals reports of large companies in France. Accounting and Management Information Systems, 9(1), 22-44.
Sekaran, U. (2003). Research Methodology For Business: A Skill Building Approach (4th Edition). New Jersey: John Wiley & Sons Inc.
Sinclair-Desgagne, B., & Gozlan, E. (2003). A theory of environmental risk disclosures. Journal of Environmental Economics and Management, 45, 377-393. doi: org/10.1016/S0095-0696(02)00056.
Ullmann, A. E. (1985). Data in search of a theory: A critical examination of the relationships among social performance, social disclosure and economic performance of US Firms. Academy of Management Review, 10(3).
Wong, S. C., Jomo, K. S., & Chin, K. F. (2011). Malaysian “Bail Outs”? Capital controls, restructuring and recovery. Singapore: University Press.
Yusoff, H., & Lehman, G. (2009). Corporate environmental reporting through the lens of Semiotics. Asian Review of Accounting, 17(3), 226-246.doi: 10.1108/13217340910991938.
Published
2019-10-31
How to Cite
SALLEHUDDIN, M., & ROSLI, N. A. (2019). Corporate Governance and Corporate Environmental Disclosures of Public-Listed Companies in Bursa Malaysia. IJO -International Journal of Business Management ( ISSN 2811-2504 ), 2(10), 01-15. Retrieved from http://ijojournals.com/index.php/bm/article/view/242
Section
Articles
Copyright (c) 2019 IJO -International Journal of Business Management
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Author(s) and co-author(s) jointly and severally represent and warrant that the Article is original with the author(s) and does not infringe any copyright or violate any other right of any third parties and that the Article has not been published elsewhere. Author(s) agree to the terms that the IJO Journal will have the full right to remove the published article on any misconduct found in the published article.
