The purpose of this paper is to examine corporate social responsibility (CSR) disclosures over a period of time when the business environment, particularly the Malaysian environment, experienced several significant changes including the recent financial crises and regulatory changes. The paper also examines factors influencing the CSR disclosures before and after the aforementioned changes.
A self‐constructed CSR checklist was used to measure the extent and quality of CSR disclosures in the annual reports of 85 companies listed on Bursa Malaysia for the years 2006 and 2009. A number of statistical techniques were employed to assess the CSR disclosures over time, as well as factors influencing the CSR disclosures.
Results revealed a significant overall increase in both the extent and quality of CSR disclosures between the two years covered in the study. In terms of factors influencing the CSR disclosures, director ownership, government ownership and company size were found to be significant in explaining both the extent and quality of CSR disclosures in the year 2006. Board size was found to have a significant relationship with only the extent of CSR disclosures in 2006. However, the results in the year 2009, a period following the policy changes, revealed an improved significant association between board size and CSR disclosures.
The results, which showed a significant increasing trend in CSR disclosures following changes in the market place of an emerging economy, lend some support to legitimacy theory's conjecture that CSR disclosures are used to reduce exposure arising from the public. Hence, this study suggests corporate legitimation practices, which were previously renowned in the economically developed countries, also exist in the emerging economies. The empirical observations asserted in this study, however, were only drawn from the Malaysian context. Therefore, future research involving several emerging countries is needed to ascertain the existence of corporate legitimation exercises in the developing countries.
In terms of practical implications, the dominance of narrative CSR disclosures in the annual reports as opposed to verifiable information, even after the CSR mandatory requirement, could be due to the absence of a detailed CSR framework for Malaysian public listed companies. Policy makers in Malaysia may therefore want to devise detailed and specific CSR disclosure requirements, rather the current general mandatory requirement, to enhance the quality of CSR disclosures.
This study can be considered one of limited empirical studies to have assessed CSR disclosures following changes in the market place.
Ahmed Haji, A. (2013), "Corporate social responsibility disclosures over time: evidence from Malaysia", Managerial Auditing Journal, Vol. 28 No. 7, pp. 647-676. https://doi.org/10.1108/MAJ-07-2012-0729Download as .RIS
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