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ESG in the boardroom: evidence from the Malaysian market

Author

Listed:
  • Kamilah Kamaludin

    (Prince Sultan University)

  • Izani Ibrahim

    (Prince Sultan University)

  • Sheela Sundarasen

    (Asia Pacific University of Technology and Innovation)

  • OVA Faizal

    (Prince Sultan University)

Abstract

This study examines the influence of boards’ characteristics with respect to independence, diversity, and diligence on the environment, social, governance (ESG) disclosure among Bursa Malaysia companies. The board characteristics are proxied by the percentage of independent directors, women on the board, and the number of board meetings, respectively. We collected data from all 785 companies listed on the Kuala Lumpur Stock Exchange. Our final sample consisted of 91 companies that have an ESG disclosure score. Using GLS panel regression analysis, our findings overall indicate that board independence and diversity enhance ESG disclosure practice significantly for companies in all sectors. However, board diligence is related negatively to ESG disclosure. As expected, the significance of the relations among the board characteristics and the ESG disclosures are more profound from 2014 onward, largely because of changes in regulatory requirements. Our study provides new understanding and insights pertaining to the importance of board independence and board diversity on ESG initiatives and disclosures in the Malaysian context. This research complements studies in the areas of sustainability and strategy, and contributes to business practices with respect to the composition of boards of directors.

Suggested Citation

  • Kamilah Kamaludin & Izani Ibrahim & Sheela Sundarasen & OVA Faizal, 2022. "ESG in the boardroom: evidence from the Malaysian market," International Journal of Corporate Social Responsibility, Springer, vol. 7(1), pages 1-15, December.
    • Handle: RePEc:spr:ijocsr:v:7:y:2022:i:1:d:10.1186_s40991-022-00072-2
    DOI: 10.1186/s40991-022-00072-2
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    1. Uzair Bhatti & Noralfishah Sulaiman, 2022. "The Impact of Sustainability Practices on Share Performance with Mediation of Board Members Experience: A Study on Malaysian Listed Companies," IJFS, MDPI, vol. 11(1), pages 1-22, December.
    2. Shaista Wasiuzzaman & Vasanthan Subramaniam, 2023. "Board gender diversity and environmental, social and governance (ESG) disclosure: Is it different for developed and developing nations?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2145-2165, September.
    3. Um‐E‐Roman Fayyaz & Raja Nabeel‐Ud‐Din Jalal & Michelina Venditti & Antonio Minguez‐Vera, 2023. "Diverse boards and firm performance: The role of environmental, social and governance disclosure," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1457-1472, May.

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