Bridging Corporate Governance and Environmental Reporting: Evidence from Malaysian Public Listed Firms

Abstract

The primary goal of this paper is to investigate the effect of the corporate governance characteristics on Malaysian public listed firms’ environmental reporting practices. The independent variables include board size, women on the board, audit committee size, audit committee meeting frequency, and females on the audit committee. The size of the firm, profitability, growth, industry, and earnings before interest and tax represents as the control variables. Based on 131 samples, this study applies the multiple regression analysis with robust standard errors in order to identify the variables. The results show that women on board have a positive and significant association with environmental reporting, whereas female representation on audit committees is negatively and significantly associated with disclosure. Firm growth is also negatively associated with environmental reporting, while earnings before interest and taxes show a positive relationship. In contrast, board size, audit committee size, audit committee meeting frequency, firm size, industry, and profitability do not have significant relationships with environmental disclosure. The findings support agency theory and resource dependence theory by highlighting the importance of gender diversity in board-level strategic decision-making. The effectiveness of governance is influenced more by the roles and impacts of directors than by structural features alone. This study extends the body of knowledge on corporate governance by offering empirical research in the field of environmental reporting for developing markets and delivers practical suggestions to government regulators, boards of directors, and corporations for the quality improvement of environmental information reporting.