Roshima Said, Ariffah Ashikin Abdul Rahim and Rohail Hassan
The purpose of this study is to investigate the influence of corporate governance and human governance on management commentary disclosure among Malaysian Public Listed in the…
Abstract
Purpose
The purpose of this study is to investigate the influence of corporate governance and human governance on management commentary disclosure among Malaysian Public Listed in the Main Market, Bursa Malaysia.
Design/methodology/approach
The annual reports of 150 companies listed on the main market, Bursa Malaysia, for the year ended 2014, are examined to analyze the company’s management commentary disclosure using content analysis. A management commentary disclosure index was developed based on the five elements that had been established by the Malaysian Accounting Standards Board (MASB) in Practices of Management Commentary’s framework. The study considers four corporate governance mechanisms such as board composition, board size, board’s education and ownership structure. Structural equation modeling (SEM -PLS), partial least squares (PLS) and SmartPLS software were used to measure the impact of corporate governance and human capital on management commentary disclosure.
Findings
The results reveal that most of the information disclosure by Malaysian Listed companies was not presented in a complete and balanced manner and not providing an insight because they are more focused on describing the process. Besides, there was no clear link between companies’ strategies and performance measure. Consequently, the reporting is not balanced and cannot assist the shareholders in understanding the opportunities and risk associated with the business. The results, based on a structural model, indicated that only two variables, namely, board size and board independence, showed a positive and significant influence on the degree of disclosure information of management commentary. Board independence is the most significant variable that influences the degree of corporate governance and human capital on management commentary disclosure.
Originality/value
The study contributes to the information disclosure literature as it presents in empirical evidence proving that governance mechanism affects the management commentary disclosure of information by companies. This study also provides additional information which is expedient to other researchers since there is lack of studies in management commentary which relates the attributes of corporate and human governance mechanisms as key drivers in providing management commentary information. Importantly, this study will stimulate the interest of academics in research activities concerning the attributes of governance mechanisms and corporate and human governance on management commentary activities.
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Wan Nailah Abdullah and Roshima Said
This empirical study aims to examine two areas: first, the characteristics of the audit committee and their relationship with corporate financial crime so as to ensure that their…
Abstract
Purpose
This empirical study aims to examine two areas: first, the characteristics of the audit committee and their relationship with corporate financial crime so as to ensure that their effectiveness as a corporate governance mechanism is still relevant; and second, the effectiveness of having a risk committee which is separated from the audit committee in the prevention of corporate financial crime.
Design/methodology/approach
This empirical research was carried out by using a Web-based data collection for corporate financial crime cases.
Findings
While the results for audit committee characteristics are not supported, the findings, however, indicate a significant relationship between the existence of a stand-alone risk committee with corporate financial crime incidences.
Practical implications
The result of the study serves as an empirical indicator of a firm’s consideration in deciding on the implementation of a stand-alone risk committee from its audit committee.
Originality/value
Both the descriptive and correlation analyses produced by this paper provide new insights into the extent of corporate financial crime, as well as the empirical evidence of the effectiveness of having a stand-alone risk committee.
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Roshima Said, Khairunnisa Abd Samad, Noor Zahirah Mohd Sidek, Nurul Fatihah Ilias and Noorain Omar
The purpose of this paper is to examine the extent of Maqasid Al-Shariah corporate social responsibility (CSR) disclosure of public listed companies of Shariah-compliant companies…
Abstract
Purpose
The purpose of this paper is to examine the extent of Maqasid Al-Shariah corporate social responsibility (CSR) disclosure of public listed companies of Shariah-compliant companies in Malaysia.
Design/methodology/approach
Content analysis was used to construct the Maqasid Al-Shariah CSR disclosure index. Furthermore, the study used a checklist that covered four themes of CSR, namely environment, community involvement, human resource and product, and five elements of Maqasid Al-Shariah, namely, faith, human self, intellect, posterity and wealth.
Findings
The findings of the study show that the level of Maqasid Al-Shariah CSR disclosure index is generally low. The study found that Shariah-compliant companies revealed more community-related theme and an intellect element in their annual reports for the year of the survey.
Originality/value
This paper is one of few papers that has developed the Maqasid Al-Shariah CSR disclosure index that used the aforementioned four themes of CSR and five Maqasid Al-Shariah elements.
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Normah Omar, Roshima Said and Zulaikha ‘Amirah Johari
Corporate crimes in Malaysia are increasing each year. These issues are bothersome to the investors, creditors and the public as a whole because of the huge impact on all of them…
Abstract
Purpose
Corporate crimes in Malaysia are increasing each year. These issues are bothersome to the investors, creditors and the public as a whole because of the huge impact on all of them. Employees lose their jobs, investors do not get optimal return on their investments and creditors are unable to get their payments, and as a result, the public lose their faith on the legislation. The purpose of this study is to analyze the cases charged under Securities Commission and Bank Negara Malaysia.
Design/methodology/approach
This study analyzes the cases in Securities Commission and Bank Negara under four criteria which are the corporate profiles, details on crime committed, perpetrators profile and, finally, the offence.
Findings
The findings show that top-level management, especially the directors, usually commit such crime and many of them are male.
Originality/value
This study looks into the criteria of the cases charged under both institutions, Securities Commission and Bank Negara, which can be used to create awareness among the organizations in Malaysia.
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Roshima Said, Mazlifa Md. Daud, Leily Adja Radjeman and Noridah Ismail
The number of Shari’ah Compliant companies is tremendously increasing year by year in Malaysia. In an attempt to win the trust and confidence of its Muslim investors and…
Abstract
Purpose
The number of Shari’ah Compliant companies is tremendously increasing year by year in Malaysia. In an attempt to win the trust and confidence of its Muslim investors and stakeholders, the Shari’ah Compliant companies must portray their sincerity and earnestness in complying with Islamic values which may have implications on winning the trust of Muslim investors largely from oil-rich Arab Gulf Region which have flush of funds currently. Thus, the purpose of the study is to gauge the extent of the corporate ethical identity (CEI) that is being incorporated by the Shari’ah Compliant companies in Malaysia.
Design/methodology/approach
This study used the content analysis to develop CEI by adding all the items covering the four themes, which were underlying philosophy and values, interest-free and Islamically acceptable activities, developmental and social goals and environment theme. This CEI index was developed by using the dichotomous, which the score of ‘1’, if the company disclose the items and ‘0’, if it is not. The process will add all the scores and equally weighted.
Findings
The study showed that the level of communicated ethical identity disclosed in annual reports of Shari’ah Compliant companies for the year ended 2008 is relatively low with average of 23.66%. Overall, the findings of the study showed that the Shari’ah Compliant companies revealed more communicated ethical identity on Theme 1 (underlying philosophy and values) in the annual reports for the year ended 2008. In addition, in the year 2008, the findings showed that the dimension of developmental and social goals has the most influence towards the ethical identity index of Shari’ah Compliant companies.
Research limitations/implications
The source of data in this study is limited to companies’ annual report. In other words, the extent of communicated ethical identity index is constructed limited to company’s annual report. The study has shown that annual reports is not the only means or medium of disclosure. Hence, studying other forms of disclosure on communicated ethical identity could possibly complement and add value to any investigation on the nature and extent of communicated ethical identity through annual reports in the future.
Practical implications
The study is expected to alert the Securities Commission with regard to the definition of Shari’ah Compliant companies which should not just include ‘good public perception and image company’ but also the extent of the application of Islamic values in the conduct of their businesses.
Originality/value
The study provides a new benchmark of an ideal Islamic communicated CEI index based on Shari’ah principles and also past literatures. The study developed a checklist from preliminary checklist with 88 items based on Berrone, Surroca, and Tribo (2005), Haniffa and Hudaib (2007) and Roshima, Yuserrie and Hasnah (2009). In order to develop the checklist, the researchers also look on the definition of Islamic ethics defined by Khan (2009).
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Wan Nailah Abdullah and Roshima Said
The chapter focuses on the personal characteristics of top executives in companies involved in corporate financial crime as well as the introduction of human governance as one of…
Abstract
The chapter focuses on the personal characteristics of top executives in companies involved in corporate financial crime as well as the introduction of human governance as one of the mechanisms in preventing corporate misbehaviour. This chapter discusses directors’ and top management teams’ personal characteristics – in the context of corporate governance – that may influence the occurrence of corporate financial crime. The study further proposes the human governance factor as a possible mechanism to improve corporate governance in preventing such misbehaviour. This chapter highlights the personal characteristics of top executives, which may become the indicators of corporate financial crime, as well as human governance, which is shown to be one of the most important mechanisms of corporate governance for corporate financial crime prevention.
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Dayang Hafiza Abang Ahmad, Corina Joseph and Roshima Said
This chapter examines the determinants of accountability practices disclosure on the websites of Malaysian local authorities, from the institutional isomorphism perspective.
Abstract
Purpose
This chapter examines the determinants of accountability practices disclosure on the websites of Malaysian local authorities, from the institutional isomorphism perspective.
Design/methodology
A content analysis was employed to examine the websites of all local authorities in Malaysia. A modified accountability disclosure index was used to examine the extent of accountability practices disclosure on websites. Multiple regression analysis was conducted to examine the significant impact of institutional factors on the accountability practices disclosure.
Findings
The results suggest that, on average, Malaysian local authorities have disclosed 42 items (or 42%) of the accountability practices disclosure on the websites. The implementation of innovation activities, political competition and press visibility has statistically influenced the extent of accountability practices disclosure of Malaysian local authorities on the websites on the premise of coercive isomorphism.
Research limitations/implications
This chapter highlights the institutional factors that influence the extent of online accountability practices disclosure of local authorities in developing countries. The findings therefore enable local authorities to explore the best possible approaches to effectively discharge accountability and to promote greater transparency through the dissemination of information on the website.
Originality/value
This chapter contributes to the public sector accounting literature by introducing new institutional factors that influence the disclosure practice of local authorities in Malaysia i.e. the establishment of the Integrity Unit and implementation of innovation activities under the public sector reform agenda.
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Roshima Said, Noorain Omar and Wan Nailah Abdullah
The objectives of this paper are to examine the level of environmental disclosure in annual reports made by Malaysian public listed companies for the year ended 2009, and to…
Abstract
Purpose
The objectives of this paper are to examine the level of environmental disclosure in annual reports made by Malaysian public listed companies for the year ended 2009, and to investigate whether there are any relationships between board characteristics (board size and board independence), firm characteristics (business type) and human capital characteristics (age, knowledge background and proportion of female directors) and environmental disclosure in Malaysian public listed companies' annual reports for the year ended 2009.
Design/methodology/approach
The study constructs the environmental disclosure index with 11 disclosure themes based on research by Sharifah et al. to determine the environmental disclosure level. The study uses content analysis to find the environmental disclosure items and constructs an environmental disclosure index from the companies' annual reports. Hierarchical regression analysis is used to examine the relationships between the environmental disclosure index and board characteristics (board size and board independence), firm characteristics (business type) and human capital characteristics (age, knowledge background and proportion of female directors).
Findings
The results of the study reveal that there is a significant relationship between the existence of an independent non-executive chairman, the chairperson's age, the existence of a CEO with a law background and the industry type with the extent of environmental disclosure. The industry type is found to be the most significant variable that influences the level of environmental disclosure in Malaysian public listed companies for the year ended 2009.
Research limitations/implications
The findings are limited to Malaysian public listed companies for the year January to December 2009. The source of the data used in this study is companies' annual reports only. This study has several implications that may apply in many countries, irrespective of whether they are developing or developed countries. First, it provides strong evidence to show that boards of directors and human capital are significant variables in the extent of disclosure. Second, it is useful to managers, especially to boards of directors in Malaysia, in identifying board characteristics and human capital characteristics that could improve companies' environmental activities; these could be disclosed in the interest of stakeholders and the public's environmental concern. Third, this study can also be used as an initial step for companies in to be involved in environmental activities. Prior studies have proved that these activities could enhance companies' image and reputation and could offer financial benefits to the business.
Originality/value
The study extends the previous studies by the inclusion of human capital characteristics as a factor that influences environmental reporting in Malaysia. This study has demonstrated that to mitigate the agency problems between firms and shareholders, society and stakeholders, and particularly environmental impact, the inclusion of human capital characteristics as an indicator may help to reduce expected costs and negative impacts on firm value, and may also demonstrate to society and the company's stakeholders that individual firms are doing their part to help solve society's social and environmental problems through additional disclosures.
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Roshima Said, Corina Joseph and Noor Zahirah Mohd Sidek
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…
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.