The influence of board characteristics on sustainability reporting in selected Malaysian sensitive and non-sensitive industries


  • Mohamad Iruwan Ghuslan Multimedia University Jalan Multimedia, Cyberjaya, Selangor, Malaysia
  • Norman Mohd Saleh Universiti Kebangsaan Malaysia, Bangi, Selangor, Malaysia



Sustainability reporting, Corporate governance, Malaysia, Sensitive industry


This study seeks to investigate the influence of board characteristics on the sustainability reporting of selected industries listed on Bursa Malaysia. The board of directors is claimed to be the most important person and aspects of corporate governance systems that may influence the company’s decision to disclose more or less their sustainability reporting to the society. This study makes a contribution to research in this area as it highlights whether governance mechanisms are related to an increase the level of sustainability reporting in the annual reports. A sample of 70 listed companies was drawn from the Bursa Malaysia using systematic random sampling method. Data were collected from annual reports from 2012 and 2013. Analysis shows that only two variables influence the level of sustainability reporting, namely board size and proportion of independence of directors, Dual leadership and type of industry insignificantly influence the level of sustainability reporting disclosure. This study also found that sustainability reporting is likely to be influenced by profitability and firm growth.


Download data is not yet available.


Abdullah, S.N., Mohamad, N.R., & Mokhtar, M.Z. (2011). Board independence, ownership and CSR of Malaysian
large firms. Corporate Ownership & Control, 8(3), 341-357.

Adams, C.A., Hill, W., & Roberts, C.B. (1998). Corporate social reporting practices in Western Europe:
Legitimating corporate behaviour? British Accounting Review, 30, 1-21.

Aguilera, R.V. (2005). Corporate governance and director accountability: an institutional comparative
perspective. British Journal of Management, 16(l), 39-53.

Alsaeed, K. (2006). The association between firm-specific characteristics and disclosure: the case study of Saudi
Arabia. Managerial Auditing Journal, 21(5), 476-496.

Andrew, B.H., Gul, F.A., Gutrie, J.E., & Teoh, H.Y. (1989). A note on corporate social disclosure practices in
developing countries: The case of Malaysia and Singapore. British Accounting Review, 21, 371-376.

Amran, A., & Devi, S.S. (2008). The impact of government and foreign affiliate i nfluence on corporate social
reporting. Managerial Auditing Journal, 23(4), 386-404.

Ashforth, B.E., & Gibbs, B.W. (l990). The double-edge of organizational legitimation. Organization Science, l(2),

Barako, D.G., Hancock, P., & Izan, H.Y. (2006). Factors influencing voluntary corporate disclosures by Kenyan
companies. Corporate Governance: An International Review, 14(2), 107-125.

Belkhir, K. (2004). Board of directors' size and performance in the banking industry. International Journal of
Managerial Finance, 5(2), 201-221.

Boesso, G., & Kumar, K. (2007). Drivers of corporate voluntary disclosure: A framework and empirical evidence
from Italy and United States. Accounting, Auditing and Accountability Journal, 20(2), 269-296.

Branco, M.C., & Rodrigues, L.L. (2008). Social responsibility disclosure: A study of proxies for the public
visibility of Portuguese banks. British Accounting Review, 40(2), 161-181.

Brammer, S., & Pavelin, S. (2008). Factors influencing the quality of corporate environmental disclosure.
Business Strategy and the Environment, 17(2), 120-136.

Brennan, N.M., & Solomon, J. (2008). Corporate governance, accountability and mechanisms of accountability:
An overview. Accounting, Auditing and Accountability Journal, 21(7), 889-906.

Cahaya, F.R., Porter, S., Tower, G., & Brown, A. (2009). Labour practices and decent work disclosures in
Indonesia, presented at the AFAANZ Conference, Adelaide.

Chau, G., & Gray, S.J. (2010). Family ownership, board independence and voluntary disclosure: Evidence
from Hong Kong. Journal of International Accounting, Auditing and Taxation, 19(2), 93-109.

Chen, C.J., & Jaggi, B. (2000). Association between independent non-executive directors, family control and
financial disclosure in Hong Kong. Journal of Accounting and Public Policy, 9, 285-310.

Cheng, E.C.M., & Courtenay, S.M. (2006). Board composition, regulatory regime and voluntary disclosure. The
International Journal of Accounting, 41(3), 262-289.

Dalton, D.R., Daily, C.M., Certo, S.T., & Roengpitya, R. (2003). Meta-analyses of financial performance and
equity: Fusion or confusion. Academy of Management Journal, 46(1), 12-26.

Deegan, C., & Gordon, B. (1996). A study of the environmental disclosure practices of Australian
companies. Accounting and Business Research, 26(3), 187-199.

Deegan, C. (2002). The legitimizing effect of social and environmental disclosures: A theoretical foundation.
Accounting, Auditing and Accountability Journal, 15(3), 282-311.

de Villiers, C., & van Staden, C.J. (2010). Shareholders requirements for corporate environmental disclosures:
A cross country comparison. British Accounting Review, 42(4), 227-240.

Donelly, R., & Mulcany, M. (2008). Board structure, ownership, and voluntary disclosure in Ireland. Corporate
Governance: An International Review, 34(5), 416-29.

Elsayed, M.O., & Hoque, Z. (2010). Perceived international environmental factors and corporate voluntary
disclosure practices: An empirical study. British Accounting Review, 42(1), 17-35.

Eng, L.L., & Mak, Y.T. (2003). Corporate governance and voluntary disclosure. Journal of Accounting and
Public Policy, 22, 354-345.

Esa, E., Anum, N., & Ghazali, M. (2012). Corporate social responsibility and corporate governance in
Malaysian Government-linked Companies. Corporate Governance: The International Journal of Business in
Society, 12(3), 292-305.

Forker, J.J. (1992). Corporate governance and disclosure quality. Accounting and Business Research, 22(86), 111-

Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the
literature and a longitudinal study of UK disclosures. Accounting, Auditing and Accountability Journal, 8(.2),
4 7- 77.

Gujarati, D.N. (1995). Basic econometrics (3rd ed.). New York, NY: McGraw-Hill.

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.

Gunawan, J., Djajadikerta, H.G., & Smith, M. (2009). An examination of corporate social disclosures in the
annual reports of Indonesian listed companies, Asia Pacific Centre for Environmental Accountability Journal,
15(1), 13-36.

GRI (2004). Public Agency Sustainability reporting: A GRI resource department in support of the Public
Agency Sector Supplement Project, Global Reporting Initiative, Amsterdam.

Haniffa, R.M., & Cooke, T.E. (2005). The impact of culture and governance on corporate social reporting.
Journal of Accounting and Public Policy, 24, 392-430.

Haniffa, R., & Hudaib, M. (2006). Corporate governance structure and performance of Malaysian listed
companies. Journal of Business Finance and Accounting, 33(6/7), 1034-1062.

Hackston, D., & Milne, M.J. (1996). Some determinants of social and environmental disclosures in New
Zealand companies. Accounting, Auditing and Accountability Journal, 9(1), 77-108.

Hahn, R., & Kuhnen, M. (2013). Detenninants of sustainability reporting: A review of results, trends, theory and
opportunities in an expanding field of research. Journal of Cleaner Production, 59, 5-21.

Haran, H., Ibrahim, D.N., Ismail, I., Hoo, Q.C., N.N.K., Zainuddin, Y., Nasruddin, E., Saiful, S.R., & Hariri, H. (2006). Governance, ethics and corporate social responsibility of public listed companies in Malaysia. An unpublished report summited to the Institute Integriti Malaysia and IIM-MAREF Malaysia.

Hilman, A.J., & Dalziel, T. (2003). Board of directors and firm performance: Integrating agency and resource
dependence perspectives. Academy of Management Review, 28(3), 383-396.

Holder-Webb, L., Cohen, J.R., Nath, L., & Wood, D. (2009). The supply of corporate social responsibility disclosure
among US firms. Journal of Business Ethics, 84(4), 497-527.

Ho, P.L., & Taylor, G. (2013). Corporate governance and different types of voluntary disclosure: Evidence from
Malaysian listed firm. Pacific Accounting Review, 25(I), 4-29.

Ho, S.M., & Wong, S.K. (2001). A study of relationship between corporate governance structures and the extend
of voluntary disclosure. Journal of International Accounting, Auditing and Taxation, 10, 139-156.

Hendry, J. (2005). Beyond self-interest: Agency theory and the board in a satisfying world. British Journal of
Management, 16(1), 55-63.

Islam, M.A., & Deegan, C. (2008). Motivations for an organization within a developing country to report social
responsibility information. Accounting, Auditing and Accountability Journal, 21(6), 850-874.

Jaffar, R., lskandar, T.M., & Mohamad, J.N. (2003). An investigation of environmental disclosures in Malaysia,
National University of Malaysia, Bangi Selangor.

Janggu, T., Joseph, C., & Madi, N. (2007). The current state of corporate social responsibility among industrial
companies in Malaysia. Social Responsibility Journal, 3(3), 9-18.

Jensen, M.C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The
Journal of Finance, 48, 831-880.

Joseph, C., Plicher, R., & Taplin, R. (2014). Malaysian local government internet sustainability reporting.
Pacific Accounting Review, 26(1), 75-93.

Kim, H., & Lim, C. (2010). Diversity, outsider directors and firm valuation: Korean evidence. Journal of
Business Research, 63(3), 284-291.

Lakhal, F. (2005). Voluntary earnings disclosures and corporate governance: Evidence from France. Review
of Accounting and Finance, 4, 64-86.

Laksamana, I. (2008). Corporate board governance and voluntary disclosure o f executive compensation
practices. Contemporary Accounting Research, 25(4), 1147-1182.

Lim, S., Matolcsy, Z., & Chow, D. (2007). The association between board composition and different types of
voluntary disclosure. European Accounting Review, 16(3), 555-583.

Mohamad Zain, M., & Janggu, T. (2006). Corporate social disclosure of construction company in Malaysia.
Malaysian Accounting Review, 5(1), 84-114.

Nik Ahmad, N.N., & Sulaiman, M. (2004). Environmental disclosures in Malaysian annual reports: A
legitimacy perspective. International Journal of Commerce and Management, 14(1), 44-58.

Ntim, C.G., & Soobaroyen, T. (2013). Black economic empowerment disclosures by South African listed
corporations: The influence of ownership and board characteristics. Journal of Business Ethics, 116(1), 121-

Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms.
Journal of Business Ethics, 88(2), 351-366.

Roa, K.K., Tilt, C.A., & Lester, L.H. (2012). Corporate governance and environmental reporting: An
Australian Study. Corporate Governance: The International Journal of Business in Society, 12(2), 143-163.

Roberts, J., Mcnulty, T., & Stiles, P. (2005). Beyond agency conceptions of the work of the non-executive
director: Creating accountability in the boardroom. British Journal of Management, 16(I), 5-26.

Said, R., Zainuddin, Y.Hj., & Haron, H. (2009). The relationship between corporate social responsibility
disclosures and corporate governance characteristics in Malaysian Public listed companies. Social
Responsibility Journal, 5(2) , 212-226.

Samaha, K., Dahawy, K., Hussainey, K., & Stapleton, P. (2012). The extent of corporate governance disclosure
and its determinants in a developing market: The case of Egypt. Advances in Accounting, Incorporating
Advances in International Accounting, 28(I), 168-178.

Sawani, Y., Mohamed Zain, M., & Darns, F. (2010). Preliminary insights on sustainability reporting and
assurance practices in Malaysia. Social Responsibility Journal, 6(4), 627-645.

Shamil, M.M., Shaikh, J.M., Ho, P.L., & Krisnan, A. (2014). The influence of board characteristics on
sustainability reporting: Empirical evidence from Sri Lankan firms. Asian Review of Accounting, 22(2), 78-97.

Shan, Y.G. (2009). Related party disclosures in China: Influence of factors identified from agency, legitimacy, and
signaling theories, presented at the symposium SA, Adelaide.

Sobhani, F.A., Amran, A., & Zainuddin, Y. (2009). Revisiting the practices of corporate social and
environmental disclosure in Bangladesh. Corporate Social Responsibility and Environmental Management, 16,

Sobhani, F.A., Amran, A., & Zainuddin, Y. (2012). Sustainability disclosure in annual reports and websites: A
study of the banking industry in Bangladesh. Journal of Cleaner Production, 23, 75-85.

Sumiani, Y., Haslinda, Y., & Lehman, G. (2007). Environmental reporting in a developing country: A case study
on status and implementation in Malaysia. Journal of Cleaner Production, 15(10), 895-901.

Tilt, C.A. (1994). Pressure groups on corporate social disclosures: Some empirical evidence. Accounting, Auditing
and Accountability Journal, 7(4), 47-72.

Thompson, P., & Zakaria, Z. (2004). Corporate social responsibility reporting in Malaysia: Progress and
prospects. Journal of Corporate Citizenship, 13(Spring), 125-136.

Teoh, H.Y., & Thong, G. (1984). Another look at corporate social responsibility and reporting: An empirical study
in a developing country. Accounting, Organization and Society, 9(2), 189-206.

Wallage, P. (2000). Assurance on sustainability reporting: An auditor's view, Auditing: Journal of Practice and
Theory, 19, 53-65.

Wilmshurst, T.D., & Frost, G.R. (2000). Corporate environmental reporting: A test of legitimacy theory.
Accounting, Auditing and Accountability Journal, 13(1), 10-26.

Woodward, D.G., Edwards, P., & Birkin, F. (1996). Organizational legitimacy and stakeholder information
provision. British Journal of Management, 7(4), 329-347.

Zhang, L. (2012). Board demographic diversity, independence and corporate social performance. Corporate
Governance: The International Journal of Business in Society, 12(5), 686.




How to Cite

Ghuslan, M. I., & Mohd Saleh, N. (2017). The influence of board characteristics on sustainability reporting in selected Malaysian sensitive and non-sensitive industries. Journal of Contemporary Issues and Thought, 7, 33–47.