An analysis of corporate governance factors influencing sustainability reporting disclosure in the Malaysian agro-industry

Abstract

Purpose – The effects of corporate governance characteristics such as board independence, board gender diversity, board experience and sustainability committee on sustainability reporting are examined in the context of Malaysian agro-industry companies. Design/methodology/approach – A fixed effects regression with Driscoll-Kraay standard error and generalized method of moments (GMM) analysis was employed in this study to analyze the sustainability reporting of 56 publicly listed agro-industry companies over eight years (2016–2023) using a newly developed sustainability reporting index (SRI). Findings – The findings suggest that having a sustainability committee is vital in enhancing sustainability reporting, as demonstrated by its strong positive relationship with sustainability reporting disclosure. Additionally, board gender diversity and board experience show a significant positive relationship with sustainability reporting, whereas board independence shows a negative relationship. Practical implications – The observations from this study provide important perspectives on the significance of sustainability committees in companies, diversity and experience with sustainability-related board of directors' appointments. Social implications – The findings provide practical insights for corporate governance stakeholders and policymakers in striving to enhance clarity as well as responsibility in sustainability reporting. Originality/value – The newly constructed SRI enhances the ability to evaluate sustainability practices, making a meaningful contribution to the literature by offering a robust, multidimensional measure.