Board Effectiveness and Quality of Voluntary Carbon Reporting of Malaysian Companies

Abstract

This study assessed the voluntary carbon reporting (VCR) quality and investigated if board effectiveness is related to the quality of carbon information, as depicted in the company annual reports. The sample comprised of 249 Malaysian public listed companies from a population of Bursa Malaysia for the year 2014. Generally, the findings indicated that the quality of reporting had been relatively low. Using regression model, the results displayed a significantly positive association between the number of directors serving on the board and the quality of VCR. However, board independence and CEO duality did not exhibit any significant role in influencing companies to provide high-quality information. These results have important implications for the top managers who are interested in enhancing their corporate governance practices. The findings are also useful for policy makers and accounting regulatory body as the relevance of enhancing the present carbon reporting requirements are highlighted, along with the introduction of a specific standard for carbon reporting.