Corporate social responsibility and corporate governance in Malaysian government‐linked companies

Abstract

Purpose

The purpose of this paper is to investigate whether there has been a change in the level of corporate social responsibility (CSR) disclosure and to determine whether corporate governance attributes influence CSR disclosure in corporate annual reports of Malaysian government‐linked companies (GLCs).

Design/methodology/approach

The annual reports of 27 GLCs for two years (2005 and 2007) were analysed using content analysis. Multiple regression analysis was performed to identify factors influencing CSR disclosure in annual reports.

Findings

Consistent with expectations, the paired‐sample t‐tests showed that there was an increase (significant at the 1 percent level) in the extent of CSR disclosure. The multiple regression analysis revealed that board size was positively associated and statistically significant (at the 1 percent level) with the extent of CSR disclosure.

Research limitations/implications

The regression model reported an R² of 33.9 percent, which means that almost 66 percent of factors influencing CSR disclosure in Malaysian GLCs have not been captured by the model. These other factors may perhaps be identified through other research methods such as questionnaire surveys or interviews.

Practical implications

The findings appear to suggest that the government efforts in promoting CSR among GLCs through the introduction of the Silver Book in 2006 have had some positive impact on CSR disclosure in annual reports. The results also imply that larger board size through wider exchange of ideas and experience could lead to better appreciation and involvement in corporate social activities and hence disclosure in annual reports.

Originality/value

This paper is one of the few studies to examine CSR disclosure and corporate governance attributes in GLCs after the introduction of new initiatives to promote CSR.

Citation

Esa, E. and Anum Mohd Ghazali, N. (2012), "Corporate social responsibility and corporate governance in Malaysian government‐linked companies", Corporate Governance, Vol. 12 No. 3, pp. 292-305. https://doi.org/10.1108/14720701211234564