The Relationship between Corporate Governance and Corporate Sustainability Performance in Malaysia
Hubungan antara Tadbir Urus Korporat dan Prestasi Kelestarian Korporat di Malaysia
Keywords:
Corporate Governance, Board of Director Characteristics, Agency TheoryAbstract
This study aims to investigate the effect of good corporate governance (GCG) on corporate sustainability performance (CSP) using an agency theory approach in a single-tier good corporate governance system. Corporate sustainability performance consists of economic, social, and environment sustainability performance. The study sample consists of 257 public companies listed on Bursa Malaysia for 2016, 2017 and 2018. The study considers a set of insightful theories, namely, the agency theories of understanding the motives of sustainability reporting and how the board convey signal to the market and fulfil the stakeholder’s expectation. The study used secondary data, extracted from the annual reports of the public listed companies in Bursa Malaysia. Multiple regression analysis was used to test the hypotheses. The dependent variable corporate sustainability performance was measured using the Global Reporting Index (GRI). The independent variables were board size, board meeting, board ownership and board independence. The results show positive relationship between board ownership, board meeting and board size with corporate sustainability performance, while board independent was not significant. The findings shows that corporate governance elements have very strong influential power in the company for disclosing the sustainability activities in order to send positive signals to the market and ensuring that the companies meet the demand from stakeholders. Therefore, the findings should provide input to the regulatory bodies in Malaysia in evaluating that good corporate governance will influence the sustainability performance in public listed companies in Malaysia.
Kajian ini bertujuan untuk menyiasat kesan tadbir urus korporat yang baik terhadap prestasi kelestarian korporat (CSP) menggunakan pendekatan teori agensi dalam sistem tadbir urus korporat yang berpusat. Prestasi kelestarian korporat terdiri daripada prestasi kelestarian ekonomi, sosial dan alam sekitar. Sampel kajian terdiri daripada 257 syarikat awam yang tersenarai di Bursa Malaysia bagi tahun 2016, 2017 dan 2018. Kajian ini mengguna pakai teori agensi bagi mengenalpasti motif pelaporan prestasi kelestarian yang dilakukan oleh syarikat dan bagaimana ahli lembaga pengarah menggunakannya sebagai isyarat kepada pasaran dan bagi memenuhi kehendak pihak berkepentingan. Kajian ini menggunakan data sekunder, yang diambil daripada laporan tahunan syarikat awam tersenarai di Bursa Malaysia. Analisis regresi berganda digunakan untuk menguji hipotesis. Pemboleh ubah bersandar iaitu prestasi kelestarian, diukur menggunakan Indeks Pelaporan Global (GRI). Pembolehubah tidak bersandar ialah saiz lembaga pengarah, mesyuarat lembaga pengarah, pemilikan lembaga pengarah dan kebebasan lembaga pengarah. Dapatan kajian menunjukkan hubungan positif antara pemilikan lembaga pengarah, mesyuarat lembaga pengarah dan saiz lembaga pengarah dengan prestasi kelestarian korporat, manakala kebebasan lembaga pengarah tidak mempunyai hubungan yang signifikan. Dapatan kajian menunjukkan bahawa elemen tadbir urus korporat sangat berpengaruh dalam syarikat bagi melaporkan aktiviti kelestarian untuk menghantar isyarat positif kepada pasaran dan bagi memastikan syarikat memenuhi permintaan daripada pihak berkepentingan. Oleh itu, Dapatan kajian diharapkan dapat memberi input kepada badan kawal selia di Malaysia dalam menilai bahawa tadbir urus korporat yang baik akan mempengaruhi prestasi kelestarian korporat dalam syarikat awam tersenarai di Malaysia.
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