Corporate ethical values disclosure: evidence from Malaysian and Indonesian top companies

Purpose - This paper aims to examine the extent of ethical values information disclosure on the top 100 Malaysian and Indonesian companies’ annual reports using coercive isomorphism under the institutional theory. Design/methodology/approach - Using the content analysis, the presence or exclusion of ethical values information disclosed on 100 Malaysian and Indonesian companies’ annual reports using a newly developed Ethical Values Disclosure Index is carried out. Findings - The results of the analysis found that Indonesian companies on average disclosed 31 items under study compared to 27 items disclosed by the companies in Malaysia. The results suggest that Indonesian companies are more vigilant in the code of ethics, companies policy on ethical issues, monitoring program and accountability, ethical performance, ethical infrastructure and organizational responsibility aspects, whereas their Malaysian counterparts are better in reporting governance and integrity committee or board of directors. Research limitations/implications - The findings may not be applicable to other countries in the same region, nevertheless, revealed the importance of adequate ethical values disclosure in determining the level of ethical behavior. Practical implications - Companies in Indonesia are coercively pressed by various influential stakeholder groups to address ethical issues. The less disclosure regarding corporate ethical behavior may indicate that unethical practices continue to be a problem in the Malaysian corporate sector. Originality/value - This paper adds to the literature by examining the elements of ethical values adapted mainly from the professional bodies that regulate the accounting profession and other organizations using the institutional theory, particularly in two countries.