Corporate governance code and voluntary disclosure of integrated reporting: Evidence from an emerging economy

Abstract

Integrated reporting (IR) is the most recent business reporting paradigm that seeks to improve information quality and create sustainable value. This study investigates the impact of the Malaysian Code on Corporate Governance (MCCG) 2017 on the voluntary IR disclosure quality. Data is collected from the top 100 Malaysian public listed companies from 2016 to 2020. The study used content analysis and a developed IR disclosure index on panel data of companies that fully adopt IR. The results show ongoing growth in IR adoption among Malaysian companies; most of them are aware of its benefits. The study provides empirical evidence on the positive influence of MCCG 2017 on the IR disclosure quality using the random effects generalised least squares regression model. The trend analysis confirms that Malaysian companies enhanced their IR disclosure quality, especially after 2017. The results also show that the research sample has reported 70% for each IR content element in 2020. In this regard, the highest reported element is 'risks and opportunities'. Thus, several companies have established enterprise risk management frameworks and risk committees. This study contributes to the literature by providing an intensive investigation of the IR practices in Malaysia's earliest adoption stages preceding and following the MCCG 2017.

Sustainable development, disclosure to stakeholders and the Sustainable Development Goals: Evidence from Brazilian banks' non‐financial reports

“…The global trend is for integrated reporting to be compulsorily required or, even voluntarily, for there to be some governmental guidance, at least for large organizations, such as the King III regulation in South Africa (IoD, 2009), the Directive 2014/95/EU in Europe (EU, 2014), MCCG in Malaysia (Hamad et al, 2022) or the general regulation 797/2019 in Argentina (KPMG, 2020). Developing countries, such as Brazil, should follow these examples and start encouraging the adoption of IR at least for listed companies (Ali et al, 2017).…”

“…The reports are one of the main ways of effecting the process of disclosure of companies to their stakeholders, in order to raise transparency and subsidize the decision making (Diouf & Boiral, 2017; GRI, 2018; Hamad et al, 2022). The reports are basically divided into financial and non‐financial, which can unfold, for example, into a sustainability report (SR), a corporate social responsibility report (CSR), a corporate responsibility report (CR) and ESG reports (ESG‐R).…”

Assessing the implementation of sustainable development goals: does integrated reporting matter?

“…The independent variable is the integrated reporting quality level (IRQL). To measure the quality of IR, we followed the international IR framework (IIRC, 2013) and prior literature (Barth et al , 2017; Erin and Adegboye, 2022; Hamad et al , 2022; Pistoni et al , 2018) to develop an IR index to quantify the quality of IR adoption. This index includes 43 items to cover the international IR framework’s eight content elements and six types of capital.…”

“…The authors chose to conduct this study in Malaysia because it is one of the fastest growing and emerging economies in the country. It thrives on getting closer to the developed nation’s status (Hamad et al , 2022). Malaysia’s commitment to and involvement in pursuing the SDG at the international level began in late 2014 (DOSM, 2020).…”

Can the innovation in sustainability disclosures reflect organisational sustainable development? An integrated reporting perspective from China

“…Integrated reporting (IR) is an innovative organisational reporting approach that emerges to holistically show an organisation's social, environmental, and ethical activities (Caruana & Grech, 2019; Hamad et al, 2022). Compared with traditional sustainability reporting, IR pays particular attention to providing sustainability disclosures ( SD s) in an integrated manner.…”