Corporate Governance and Corporate Social Responsibility (CSR) Disclosure: The Moderating Role of Cultural Values

Abstract

The principles of sustainable development argue that organizations should make decisions not only based on economic or financial factors but also based on the long-term social and environmental consequences. The Code on Corporate Governance is one of the drivers for corporate social responsibility (CSR) reporting in Malaysia. Additionally, the way managers execute their responsibilities may be affected by their own tradition, beliefs, values, and culture. Thus, this chapter aims to examine the relationship between corporate governance characteristics and CSR disclosure and to investigate the influence of cultural values (Board’s Culture Domination) on the relationship between corporate governance and corporate social responsibility. A sample of 150 companies from the main board of Bursa Malaysia for year ended 2006 are chosen for the purpose of this study due to the year of the introduction of Bursa Malaysia CSR Framework. Based on available data, a CSR index is constructed. Hierarchical regression analysis is used to examine the relationship between the CSR disclosure index and the independent variables and also the moderating effect of Board’s Culture Domination. Results show that government ownership and audit committees have a positive and significant influence on CSR disclosure. Furthermore, the findings show that the Board’s Culture Domination moderate the relationship between audit committee, number of shareholders, foreign ownership, and CSR disclosure.

Citation

Said, R., Joseph, C. and Mohd Sidek, N.Z. (2017), "Corporate Governance and Corporate Social Responsibility (CSR) Disclosure: The Moderating Role of Cultural Values", Modern Organisational Governance (Developments in Corporate Governance and Responsibility, Vol. 12), Emerald Publishing Limited, Leeds, pp. 189-206. https://doi.org/10.1108/S2043-052320170000012013