FEMALE REPRESENTATION ON BOARDS AND CARBON DISCLOSURE QUALITY AMONG MALAYSIAN FIRMS: EMPIRICAL EVIDENCE FROM CARBON-INTENSIVE INDUSTRIES

Abstract

The growing interest concerning climate change-related risk and the necessity of providing more information related to carbon emissions to the public reflects firms’ efforts to contribute to climate change issues. The current study examined the effect of female representation on the board of directors on the quality of carbon disclosure provided by 96 publicly listed firms in Bursa Malaysia covering the period of 2015 to 2019. Content analysis of annual reports was used to measure carbon disclosure quality via establishing a comprehensive carbon reporting checklist based on several international and Malaysian carbon reporting guidelines; for example, sustainability reporting standards GRI 305, bursa Malaysia sustainability guideline, sustainability accounting standards board framework CDSB. Accordingly, the carbon reporting checklist is used to assess the quality of carbon disclosure. In addition, female representation was measured as the percentage of female directors on a firm’s board, controlling for firm age, firm profitability, firm size, leverage, liquidity and audit quality. There was a positive and significant relationship between female representation on the board of directors and the carbon disclosure quality provided, suggesting that the presence of female directors on firms’ boards can be seen as a determinant element of carbon disclosure quality.