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

Abstract

This study examines the impacts of ESG on the corporate performance government-linked companies (GLCs) in Malaysia. For the period 2006-2012, ESG disclosure data were extracted from the Sustainalytics ESG performance reports, while financial data were obtained from the Bloomberg database. Data development analysis (DEA) was used to estimate efficiency in the first stage; a regression analysis was performed to test the relationship between ESG and efficiency in the second stage. The empirical results of this study show that GLCs focused more on governance disclosures, followed by social and environmental aspects. Moreover, governance will improve firm efficiency, but social and environmental factors have no similar effect. In conclusion, this study provides insight on the limited literature on ESG and informs the relevant stakeholders on the important ESG components for financial and investment decisions.

The Determinants of Corporate Social Responsibility Disclosure: The Case of Malaysian Government-Linked Companies in Malaysia

“…According to Abd Rahman et al (2011), high gap between the minimum and maximum values on profitability ratio indicating that certain companies are enjoying a good financial performance while some are not and their study found that profitability do not have any relationship with the level of CSR disclosure among Malaysian GLCs. Esa and Mohd Ghazali (2012) also found that there is no relationship between profitability and CSR disclosure. Pressure to disclose CSR is more influenced by ''public'' rather than ''economic'' pressure (Esa & Mohd Ghazali, 2012).…”

“…Esa and Mohd Ghazali (2012) also found that there is no relationship between profitability and CSR disclosure. Pressure to disclose CSR is more influenced by ''public'' rather than ''economic'' pressure (Esa & Mohd Ghazali, 2012). Said et al (2009) on the other hand found that there is a significant positive relationship between profitability and the extent of CSR disclosure in Malaysian non-financial companies.…”

“…A study by Esa and Mohd Ghazali (2012) in Malaysia investigated the change in the level of CSR disclosure among Malaysian GLCs for the years 2005 and 2011. The study also investigated whether corporate governance attributes influence CSR disclosure in corporate annual reports of Malaysian GLCs.…”

“…The implementation of GLC Transformation Program 2005/06 by government is one effort to promote the CSR disclosures among GLCs. CSR issues are being stressed in the Silver Book, one of the initiatives included in the GLC Transformation Manual under the GLC Transformation Program 2005/06 (Esa & Mohd Ghazali, 2012), and Khazanah Nasional Berhad, a key Government-Linked Investment Companies (GLIC), was tasked with the responsibility of monitoring Malaysian GLCs on the implementation of the CSR (Ching & Wad, 2009). It is questionable, however, as to whether the introduction of the Silver Book really reflects goods prospects for GLCs to disclose their CSR, and whether there are any other factors that will influence the GLCs in Malaysia to disclose their CSR.…”

An Exploratory Study of the Rhetoric in CSR Reports: A Comparison of Shari’ah Compliant Company and Non –Shari’ah Compliant Company in Malaysia

“…Their result had shown that different rhetoric is applied in companies' report where ethos had been the most common ethical perspective expressed in the report. † In Malaysia, the CSR study focuses on the nature, status or trend, quality, quantity and factors of disclosure in both Non-Shari'ah -compliant and the Shari'ah compliant companies' annual reports (Anuar et.al., 2004, Yahya et al, 2005, Amran and Devi,2008Said et al, 2009;Mohamad et al, 2010 ;Esa and Ghazali., 2012). However, none has been noted to have discussed the type of ethical categories and moral attitude of company in divulging CSR in the annual report.…”