Corporate governance practices and environmental reporting of companies in Malaysia: Finding possibilities of double thumbs up

Abstract

Demonstrating good corporate governance and maintaining sound environmental performance are among the key challenges facing the organisation to ensure its sustainability. In an attempt to investigate the linkage between these two essential aspects, this study scrutinises the annual reports of 243 companies listed on the Main Board of Bursa Malaysia. There are six selected corporate governance attributes namely, board independence, CEOduality, management ownership, board size, financial expert and meeting frequency. Overall, it was found that the existence of environmental reporting is low. Only 28% of the companies disclosed environmental information. Furthermore, on average, each company reported 4.7 sentences, while the quality, as measured by the disclosure index shows an average of 3.24. The most significant corporate governance attributes in influencing the extent of environmental reporting are board size and management ownership. The finding provide limited evidence to support that, companies which comply with corporate governance practices have the tendencies to be more environmentally responsible.