Environmental Responsibility Disclosures

7/28/2019 Environmental Responsibility Disclosures

1/22

c

r

a

r

l

he aim of this

ompanies listed

sed to identify

elationship bet

wnership struct

nalyze the sig

elationships wit

oard of Sharia

urthermore, the

ow. This resear

uidelines.

eywords: Corp

research is to

in main board,

the level of c

een percentag

ure, independen

ificant of the r

h corporate env

compliant co

study confirms

h provides evi

orate Responsi

EThe Cas

Gra

Gra

investigate th

BursaMalaysia.

orporate envir

of corporate

t non-executive

lationships. T

ironment respo

pany has influ

that the level

ence for regula

il ity, Environm

vironmentae of Shariah

duate School of

chool of Mana

duate School of

disclosures o

A total of 217

nment respons

environment re

directors, capit

he study reveal

sibility disclos

nce over corp

f corporate env

tory body such

ent Responsibi

1

Responsibil

Compliant C

Sofri Yahya,

Business, Univ

Harashid Haro

ement, Univers

and

Thahirah Hadi

Business, Univ

ABSTRACT

corporate env

nnual reports f

bility in the a

sponsibility an

l structure and

ed that Musli

res.The empiri

rate environme

ironment respo

as Securities C

i ty, CSR, Capit

ity Disclosurompanies in

ersiti Sains Mal

iti Sains Malays

ersiti Sains Mal

ironment respo

r the year ende

nual report. C

the independe

ype of business

chairman of t

cal evidence of

nt disclosures.

sibility disclos

mmissions of

l Structure, Sh

s:Malaysia

ysia

ia

ysia

sibility in ann

2007 have bee

orrelation anal

nt variables w

or sectors. Mul

e board and t

this study reve

his is consiste

res is different

alaysia to furt

ariah Compani

ual report of S

n analyzed. Co

sis was used

ich are chair

iple regressions

pes of busines

led that Musli

t with Islamic

across sectors

er look at the

s.

hariah complia

tent analysis w

n examining t

an of the boar

is further used

have significa

chairman of t

school of taug

nd it is relative

hariah complia

t

s

e

d,

o

t

e

t.

ly

t


2/22


3/22


4/22


5/22


6/22

s

t

pecific factors

006).

ypothesis 5:

nvironment: I

at explain on

Ownership structu

Chairman of the B

President of the C

Independent Non-

Executive Directo

Capital Structure

Inde endent Vari

Industry Sectors

uch as firm siz

here is as positi

slam is the relig

he environment

re

oard /

ompany

r

ble

, industry me

ve relationship

ion that care an

protection. Ac

bership, owner

etween level o

The

promote the i

cording to Khal

Corporate E

Responsibili

De endent Va

6

hip, legal cont

disclosure and

oretical Frame

portant of envi

id (2002), the

nvironment

ty Disclosure

iable

xt and media e

company sector

ork

ronment protect

uranic view h

posure (Aerts,

.

ion. There are

old that everyt

W., Cormier,

any verses in

ing on the eart

., & Magnan,

uran and Hadi

was created f

.

h

r


7/22

s

e

s

e

umankind. It w

ith.

takeholder Th

takeholder theo

f the stakehold

nterprise, inclu

takeholder high

ndeavor involvi

odel.

takeholder Mo

S

Go

Ass

as Gods gift (

eory has been u

y is a theory of

r approach is th

ing employees,

ights the fact th

ng large numbe

el

ppliers

ernment

rade

ociations

imah) to us, b

sed as a foundat

organizational

at corporations

customers, sup

at corporate act

s of people org

FIRM

Investors

Employees

t a gift with c

ion for this stud

anagement an

re operated or

liers, and the l

vity is not solel

nized in variou

C

Co

7

nditions nevert

y. According to

that addresses

ught to be oper

cal community

y a series of ma

s ways. Below

ustomers

olitical

Groups

mmunities

eless and it is

Wikipedia Enc

morals and valu

ated for the ben

(Boatright, 200

ket transaction

igure shows the

decidedly not s

clopedia (http:/

es in managing

fit of all those

). Boatright (2

but also a coop

diagram of the

mething that o

/www.wikipedi

an organization.

ho have a stak

07) explain, the

erative (and co

stakeholder

e runs and pla

a.org/wiki), the

The central clai

in the

concept of a

petitive)

s


8/22

s

c

c

5

s

a

a

gency Theory

otential for the

elegates decisi

anagement is

hareholders nee

ompanies that

ill disclose mo

orporate enviro

. RESEARCH

he population

09 Shariah co

tratified rando

epartment, locare formed, a si

nnual report w

ebsite.Annual

s a set of ideas

wishes of own

n-making auth

their agents, a

d the informati

ave Muslim C

re information

ment responsib

METHODOL

or this study is

pliant compan

sampling. In

tion, industry typle random sa

ill be used. A

eport has been

on organization

ers to be ignor

ority or contro

ppointed by s

n either financ

airman or Presi

o their shareho

ility are higher

GY

the Shariah co

es listed in the

tratified rando

pe and so on. Iple is taken fro

total of 217 a

onsistently vie

al control base

d (Pearce & R

l over resourc

areholders to

al or non finan

dent, majority

lders especially

n their compan

pliant compani

main board.

sampling, th

this study them each stratum

nual reports h

ed as an impor

8

on the belief t

binson, 2007).

s to another (

utilize organiz

cial in order to

uslim shareho

on corporate e

es.

es listed in Mai

or the purpose

elements in t

opulation divid(William, Swen

ve been downl

tant source of i

at the separatio

An agency rel

he agent) (Jon

tional resource

monitor the act

lders, and majo

nvironment res

n Board of Bur

of this study 2

e population ar

ed into industryey, & Anderson

oaded from B

formation in de

n of the owners

tion arises wh

s, 2007). Shar

s most effecti

vities of agents

ity Muslim ind

onsibility. It is

a Malaysia. As

17 companies

e first divided

type, one indus, 2007). For the

rsaMalaysia w

cision making.

ip from manag

never one pers

eholders are t

ely. Therefore

. In this study,

ependent non-e

expected that t

of May 2008 t

ere selected a

nto groups cal

ry is one stratupurpose of this

bsite as well

ement creates t

on (the principa

e principals; t

as a principal

t is assumed th

ecutive directo

he disclosures

ere are a total

s sample using

ed strata such

. After the strastudy, company

s the company

e

l)

p

s,

at

rs

n

f

a

s

tas

s


9/22

s

s

umber of samp

Industry

Consumer P

Industrial Pr

Trading and

Plantations

Properties

Constructio

Infrastructur

Technology

Total

(Source: List o

ontent analyseystematic, and

he statistical pa

tatistical techni

les collected inc

oducts

oducts

Services

s

e

Shariahcompli

method was tuantitative desc

ckage for social

ues such as De

ludes the follo

Total No. L

78

144

115

35

69

41

6

18

506

ant Securities b

e basic designription of mani

science (SPSS)

criptive Statisti

ing industries,

isted

the Shariah A

for this study.est content of a

version 16.0 w

cs, Regression

9

No. Sample S

34

62

49

15

30

18

2

8

217

visory Council

ontent analysicommunication

as used for the

nalysis and Co

lected

of Securities Co

has been desc (Cooper & Sc

ata analysis. T

relation Analys

mmission, 22

ribed as a reseindler, 2006) .

e data collectio

is.

ay 2008)

arch technique

was processed

for the objectiv

through differe

e,

t


10/22

s

t

s

. ANALYSIS

total of 217 c

.1.1 shows that

ervices sector

echnology secthairman or M

hareholders in

uslim sharehol

ajority Non-M

irectors.

ype of Business

Secto

onsumer prod

ndustrial produ

onstruction

rading/services

roperties

lantation

echnology

nfrastructure

ND RESULT

mpanies are ra

the sample con

22%), consum

r (3.7%) and islim Presidents

the companies

ders in their co

uslim independ

F

cts

ts

domly selecte

ists of compani

r products sec

nfrastructure sand 77 compa

selected are N

panies. Fur

nt non-executi

equency

33

62

18

49

30

15

8

2

from the list o

es from various

or (15.2%), pr

ctor (0.9%). Onies or 35.5 pe

n-Muslim, whi

thermore indep

e directors and

Percent

15.2

28.6

8.3

22.6

13.8

6.9

3.7

.9

10

f Shariah Comp

sectors. The se

operties sector

ut of 217 comcent have Non

ch consist of 6

ndent non-exe

only 92 compa

liance Securitie

tors selected ar

(13.8%), const

panies selected-Muslim Chair

5.4% and only

utive directors

nies or 42.4% h

s listed in Main

e industrial pro

uction sector (

140 companian or Non-Mu

34.6% of com

in the compani

ave majority M

Board of Burs

ucts sectors (28

8.3%), plantati

s or 64.5 percslim Presidents

anies selected

s. 57.6% of th

uslim independ

Malaysia. Tab

.6%), trading a

n sector (6.9

ent have Musli. The majority

have majority

companies ha

ent non-executi

le

d

),

f

f

e

e


11/22

Secto

onsumer prod

ndustrial produ

onstruction

rading/services

roperties

lantation

echnology

nfrastructure

otal

resident of Co

President of Co

uslimon-Muslim

otal

F

cts

ts

pany

pany Frequ

14

7

21

equency

33

62

18

49

30

15

8

2

217

ency

0

7

Percent

15.2

28.6

8.3

22.6

13.8

6.9

3.7

.9

100.0

Percent

64.5

35.5

100.0

11


12/22

uslim Shareho

Sharehold

ajority Musli

ajority Non-

otal

uslim Indepen

on-Executive

ajority Musli

ajority Non M

otal

he cross tabula

ifferent type of

ER which are

ders in a Comp

rs Frequ

7

uslim 14

21

ent Non-Execu

irectors Fre

uslim 1

2

tion analysis h

companies or s

32 and 23 co

any

ency Perce

34.6

2 65.4

7 100.0

ive Directors

uency Perc

2 42.

25 57.

17 10

s been used to

ectors. Industri

panies respecti

t

ent

4

6

.0

analyse the C

al products and

ely. However,

12

R disclosures i

trading & servi

Technology se

n the companie

ces sectors sho

tor shows onl

s. Table 1 repo

the higher nu

25 percent or

rts on the CER

bers of comp

2 companies d

disclosures fro

nies disclosed

sclosed on CE

n

.


13/22

t

Table 2 s

eir companies.

able 1

orporate Envir

Sectors

onsumer prod

ndustrial produ

onstruction

rading/services

roperties

lantation

echnology

nfrastructure

otal

hows that comp

onment Disclos

Corpora

Yescts 14

ts 32

9

23

15

9

2

2

106

anies that discl

res by Sectors

te Environment

Disclosur

No19

30

9

26

15

6

6

0

111

sed their CER

Responsibility

s

Total33

62

18

49

30

15

8

2

217

13

are the companies that have ma ority Muslim hairman or Muslim Presidents in


14/22

able 2

orporate Envir

resident of the

uslim

on-Muslim

otal

ontradictory, a

on-Executive

able 3orporate Envir

Shareholder

ajority Musli

on-Muslim

otal

onment Respons

Company

1

reported in the

irectors, the C

onment Respons

s Corp

Y

4

6

1

ibility Disclosu

Corporate En

es

69

37

06

Table 3 CER d

R disclosure is

ibility Disclosu

rate Environm

s

0

6

6

es by President

ironment Respo

isclosures

o

71

40

11

sclosure is high

high in compan

es by Majority

nt Responsibili

No

35

76

111

14

of the Compan

nsibility

Total

140

77

217

in companies t

es that have ma

Shareholders

y Disclosures

Total

75

142

217

at have Majori

jority Non-Mus

y Non-Muslim

im, independen

Shareholders. A

t non-executive

s for Independe

directors.

t


15/22

s

I

orporate Envir

on-Executive

ajority Musli

ajority Non M

otal

evel of Disclos

he level of CE

ector with the a

evel of Corpor

Sectors

onsumer produc

dustrial product

onstruction

onment Respons

irectors Co

uslim

ures

disclosures in

erage of 0.438

te Environment

Tot

s

ibility Disclosu

rporate Environ

Yes

51

55

106

annual report f

percent, follow

Responsibility

al Disclosure (%

1.26

6.27

2.94

es by Independ

ment Responsi

No

41

70

111

r all sectors is

d by Plantation

isclosure by S

) Minimu

0

0

0

15

ent Non- Execut

ility Disclosure

Total

92

125

217

show in below

sector with 0.3

ctors

Maximu

.20

.65

1.18

ive Directors

s

ab1e. The high

8 percent and

Mean

.0382

.1011

.1633

r level of discl

rading & Servi

sure is reporte

es sector of 0.2

in Infrastructu

014 percent.

e


16/22

I

rading/services

roperties

lantations

echnology

frastructure

orrelation anal

escribes the rel

orrelations An

ercentage of

ER

isclosure

Pearso

Correl

Sig. (2

N

ype of

usiness

Pearso

Correl

Sig. (2

N

sis is applied t

tionship (Levin

lysis for All Va

Percent

CE

Disclo

tion1.0

-tailed)

217.

tion.13

-tailed) .05

21

9.87

2.49

5.07

.35

.86

o determine the

& Rubin, 2007

iables (Corpor

ge of

sure

Type of

Business

C

Str

0 .131 .

.053 .

00 217

1 1.000 .

3 .

217.000

0

0

0

0

.05

degree to whi

.

te Environmen

pital

ucture Chairman

077 .147*

260 .030

217 217

050 -.101

466 .140

217 217

16

4.32

.54

1.62

.24

.81

h the variables

Responsibility)

Percentage of

Muslim

Shareholders

Perce

Ind

.060

.377

217

.247**

.000

217

.2014

.0830

.3380

.0438

.4300

are related. It t

tage of Muslim Non

pendent Directors

-.008

.903

217

.232**

.001

217

ells us how well the estimated equation actual

ly


17/22

I

apitaltructure

PearsoCorrel

Sig. (2

N

hairman Pearso

Correl

Sig. (2

N

ercentage of

uslim

hareholders

Pearso

Correl

Sig. (2

N

ercentage of

uslim Non

ndependent

irectors

Pearso

Correl

Sig. (2

N

. Correlation is signi

*. Correlation is sig

tion

.07

-tailed) .26

21

tion.14

-tailed) .03

21

tion.06

-tailed) .37

21

tion-.00

-tailed) .90

21

ficant at the 0.05 leve

ificant at the 0.01 le

7 .050 1

0 .466

217 21

* -.101 -

0 .140 .

217

0 .247** .

7 .000 .

217

8 .232** .

3 .001 .

217

l (2-tailed).

el (2-tailed).

.000 -.066

.335

7.000 217

.066 1.000

335

217 217.000

113 -.247**

098 .000

217 217

165* -.264**

015 .000

217 217

17

.113

.098

217

-.247**

.000

217

1.000

217.000

.752**

.000

217

.165*

.015

217

-.264**

.000

217

.752**

.000

217

1.000

217.000


18/22

elow is the reg

egression Ana

V

Type of Bus

Capital struc

President of

Muslim shar

Muslim I

Executive D

ummary of the

Hypothesis 1:

Hypothesis 2:

Hypothesis 3:

ession analysis

ysis: Corporat

ariables

ness

ture

the companies

eholders

dependent

rector

Findings

Hypotheses

There is a

ownership st

corporate env

There is a s

chairmanship

responsibility

There is a si

executive

responsibility

table signifying

Environmenta

Bet

.13

.08

.17

.15

on- -.12

significant rela

uctures (Muslim

ironment respon

ignificant relatio

or President a

disclosure.

gnificant relation

directors and

disclosure.

the Beta, t-valu

Responsibility

t-

1

1

2

1

-1

tionship betwee

majority shareh

ibility disclosure.

ship between t

nd corporate e

ship between M

corporate e

18

e and the signifi

Disclosure

alue

.957

.247

.472

.483

.187

Acc

Muslim

lders) and

e Muslim

vironment

slim non-

vironment

cance level.

Sig.

0.52

.214

.014

.139

.236

epted or Rejected

Reject

Accept

Reject


19/22


20/22


21/22

I

J

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