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The Influence of Board Diversity on Environmental Disclosures and Sustainability Performance in Malaysia

Author

Listed:
  • Rohaida Abdul Latif

    (Tunku Puteri Intan Safinaz, School of Accountancy, COB, Universiti Utara Malaysia, Changlun, Malaysia,)

  • Nurul Huda Yahya

    (Politeknik Sultan Abdul Halim Mu adzam Shah, Jitra, Malaysia,)

  • Kamarun Nisham Taufil Mohd

    (School of Economics, Finance and Banking, COB, Universiti Utara Malaysia, Changlun, Malaysia)

  • Hasnah Kamardin

    (Tunku Puteri Intan Safinaz, School of Accountancy, COB, Universiti Utara Malaysia, Changlun, Malaysia,)

  • Arifatul Husna Mohd Ariffin

    (Tunku Puteri Intan Safinaz, School of Accountancy, COB, Universiti Utara Malaysia, Changlun, Malaysia,)

Abstract

Sustainable growth and environmental issues have been one of the critical topics discussed by governments, legislators and environmentalists worldwide. These issues have vital impacts on the future sustainability performance of a company, societies, environment and other interrelated ecosystem. The objectives of the study are three-folds (i) to examine the extent of environmental disclosures (ER) among industrial listed companies, (ii) to examine the factors which motivate companies to disclose ER and (iii) to assess the impact of ER disclosures on sustainability performances in terms of returns on invested capital (ROIC) and sustainable growth (SG). Based on content analysis, this study finds that the level of ER disclosures is very low with an average ER Disclosure Score of only 26%. Hence more efforts are needed to motivate firms to disclose environmental activities. Using hierarchical tobit regression with robust standard error, this study finds that board diversity (Muslim directors), firm size, profitability and growth have significant influence on ER disclosures. Other board characteristics such as board size and board independence were not significant drivers of environmental disclosures. Firm size and growth had strong significant effect on one-year ahead and average 3-year future performances while the results of ER disclosures on future performances are insignificant.

Suggested Citation

  • Rohaida Abdul Latif & Nurul Huda Yahya & Kamarun Nisham Taufil Mohd & Hasnah Kamardin & Arifatul Husna Mohd Ariffin, 2020. "The Influence of Board Diversity on Environmental Disclosures and Sustainability Performance in Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 287-296.
    • Handle: RePEc:eco:journ2:2020-05-34
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    References listed on IDEAS

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    Cited by:

    1. Mustafa K. Yilmaz & Umit Hacioglu & Ekrem Tatoglu & Mine Aksoy & Selman Duran, 2023. "Measuring the impact of board gender and cultural diversity on corporate governance and social performance: evidence from emerging markets," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2106503-210, December.
    2. Safraa Sapawi & Albattat Ahmad & Marco Valeri & Norhidayah Azman, 2024. "Change in Sustainable Waste Management Behaviour in Oil Palm Community: Application of the Theory of Planned Behaviour," Sustainability, MDPI, vol. 16(2), pages 1-23, January.
    3. Xiaowei Ding & Lyu Ye & Yueying Yang & Olga Efimova & Alina Steblyanskaya & Junfeng Zhang, 2022. "The Impact Mechanism of Environmental Information Disclosure on Corporate Sustainability Performance—Micro-Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-22, September.

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    More about this item

    Keywords

    environmental reporting; sustainability growth; board diversity; Muslim; gender; integrated reporting.;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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