The influence of corporate governance structure on the sustainability reporting of malaysian public listed firms

Abstract

There has been abundant attention on sustainability reporting research, with most of it focusing on the perspective of developed countries. The present study adds to existing sustainability reporting literature from the standpoint of a developing country, Malaysia. Following the introduction of the revised Malaysian Code on Corporate Governance in 2012, this study investigates the influence of corporate governance structure on the quality of sustainability reporting disclosed by public listed firms in Malaysia. We utilise perspectives from agency theory, resource dependence theory, and stakeholder theory. The sample in this study consists of 126 firms listed on Bursa Malaysia. Based on content analysis of sustainability reporting in firms’ annual reports for the year ended 2010 and 2014, this study analyses the quality of sustainability reporting before (year ended 2010) and after (year ended 2014) the introduction of MCCG2012. Results from multiple regression analyses indicate that the number of sustainability-related trainings attended by board of directors, percentage of directors with sustainability-related experience and several control variables such as firm size, industry, and profitability have a significant effects on the quality of sustainability reporting. Findings from this study may serve as guidance for stakeholders on aspects of corporate governance mechanisms that may influence firms’ sustainability reporting.