Corporate Social Responsibility Disclosures In Malaysia Accounting Essay

This chapter discusses the background of CSR revelations in Malaysia across three decennaries which are in the late 1980s, in the 1990s and the 2000s and presently. It is of import to reexamine the old literature to derive in-depth cognition and apprehension of the development of CSR revelations before the compulsory revelation demand which was imposed in 2007.

Corporate Social Responsibility Disclosures in Malaysia

CSR disclosures in the late 1980 ‘s

The CSR revelations began easy in Malaysia due to the low degree of consciousness about their importance to the success of the companies. In add-on, there has been no compulsory demand imposed by the regulative organic structure on this affair. This is supported by Teoh and Thong ( 1984 ) and Andrew et Al. ( 1989 ) in their surveies which found that low revelations among the corporate citizens were due to the absence of statute law on the affair and low degree of consciousness of the impact of CSR revelations on their concern public presentation.

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These surveies have proven that there was a disparity between the degree of existent corporate societal engagement and the coverage of such activities in both the private and public listed companies. Based on these disclosures, the research workers concluded that Malayan companies were still conservative in their attitudes towards CSR as quoted by Nik Ahmad et Al. ( 2003 ) , Amran and Devi ( 2008 ) and Amran and A.K ( 2009 ) .

CSR disclosures in the 1990 ‘s

The survey on CSR revelations was conducted by Mohamed Zain and Janggu ( 2006 ) who examined the degree of CSR revelations among building companies from 1998 to 2002. 37 building companies were examined and they discovered that the extent of CRS revelations were at a really low scope of 0.2 for merchandise and environment to a high of 52.4 for human resource revelations. On norm, most of building companies besides tended to unwrap more human resource issues ( 73.6 % ) as compared to community ( 15.9 % ) , environment ( 7 % ) and merchandise ( 3.5 % ) disclosures. The writers besides found that CSR revelation had a positive relationship with the companies ‘ size which implied that the larger the buildings company, the more revelation was made.

In add-on, Haron et Al. ( 2004 ) examined the degree of corporate societal revelation among 134 public listed companies in Malaysia during the recession period in 1998 every bit good as pre and station recessions in 1996 and 2000 severally utilizing content analysis. This survey found that, the corporate societal revelation degree was the highest during the recession period in 1998, in which 72 per centum of the companies disclosed some corporate societal coverage in their one-year studies as compared to during the pre and station recession periods with 48.5 and 61 per centum severally. This is related to the bureau theory which stated that the addition in the CSR disclosures has led to the decrease in bureau cost. The legitimacy theory further recommended that companies may increase the revelation during the fiscal crisis to derive public assurance.

It seems that the authorities ‘s support during the fiscal crisis was another ground for the high degree of CSR revelations during the economic downswing in 1998 through the budget in order to guarantee that the uninterrupted development of the state and the public assistance of the society were good managed every bit good as to better the regulative model. Besides that, the companies were said to hold high degree of CSR revelations stand foring their province of internal controls in following to the Code of Corporate Governance ( Haron et al.,2004 ) .

Furthermore, Muhammad Jamil et Al. ( 2003 ) conducted a longitudinal survey to look into and analyze the tendency of the CSR revelations in Malayan companies for a five-year period from 1995-1999. 500 one-year studies for 100 companies listed on the chief board were reviewed. The writers discovered that 85 per centum of the sampled companies from the assorted industries disclosed CSR information at least one twelvemonth in their one-year studies and all companies in the hotel and excavation sectors strictly disclosed CSR information as compared to merely 75 per centum of companies in the plantation sector.

Furthermore, all the companies chiefly disclosed information on human resources and community engagement. However, in entire, less than 30 per centum of them systematically disclosed the CSR information in the five-year period. The writers argued that the absence of a compulsory demand for CSR revelation was the chief ground for the low degree of revelations every bit good as that the CSR was still at the development phase in Malaysia as compared to other developing states.

Craig and Russell ( 1998 ) who have ascertained the extent, form and nature of the CSR revelations in ASEAN found that other ASEAN states other than Malaysia had disclosed less than the Singaporean companies. The writers argued that the difference in the fiscal accounting system might hold been the ground for this determination. This is because Singapore ‘s and Malaysia ‘s accounting systems have been influenced strongly by the British group as compared to Indonesia, Thailand and the Philippines whose fiscal accounting systems were under the non-British group ‘s influence.

CSR disclosures in the 2000 ‘s

Many research workers continued to analyze the degrees of CSR revelations in Malaysia during the 2000 ‘s period. One of them was Nik Ahmad ( 2003 ) who used content analysis to analyze the happenstance of CSR revelations in the one-year studies of 200 top companies in 2000. This survey found that, 84 per centum of the sampled companies disclosed some signifier of CSR information in their one-year studies. This indicated an addition in the figure of companies which disclosed the CSR information as compared to old surveies due to the alteration in the value of the society. The companies were now more cognizant of the importance of being socially responsible to the society in analogue with the legitimacy theory.

Furthermore, Yusof and Lehman ( twelvemonth? ) besides quoted that the CSR revelations in Malaysia in 2003 was really low which was merely 10 per centum as reported by the ACCA survey in 2004. Malayan companies besides tended to unwrap minimal revelations as possible and focussed on the positive and good intelligence merely every bit compared to developed states such as Australia which disclosed both the good and bad intelligence about their companies.

In add-on, Ramasamy and Hung ( 2004 ) examined the degree of CSR consciousness from the position of the employees as one of the of import stakeholders in Malaysia and Singapore utilizing questionnaires. 303 questionnaires were distributed to 303 MBA pupils of Nottingham University Business School registered in Malaysia and Singapore.

However, merely 102 pupils responded. This survey farther supported that Malayan companies had low degrees of CSR consciousness due to the absence of ordinances on corporate societal revelations. Merely larger companies tended to unwrap all types of CSR information in their one-year studies. On the other manus, smaller companies in Malaysia were merely committed towards CSR activities which were limited to contributions to charity administrations and so on which was due to the limited resources held by little companies.

Furthermore, Nik Ahmad and Abdul Rahim ( 2005 ) conducted a survey to analyze the CSR consciousness among Malayan companies and directors every bit good as their positions towards the CSR activities practiced. They found that 58.6 per centum of the companies agreed that their companies were extremely cognizant of the construct of the CSR. This was followed by 34.5 per centum that felt that their companies were cognizant, while merely 6.9 per centum were diffident about the degree of the CSR consciousness possessed by their companies. Besides, they besides found that the directors of the sampled companies had different perceptual experiences on the CSR issues. The extent of the CSR programmes was besides non extensively implemented by the Malayan companies particularly the classs or developing programmes on CSR. In fact they were at the province of planning and naming directors in charge of the CSR activities.

The longitudinal informations analysis from 1999 to 2005 has besides been conducted by Saleh ( 2009 ) to research the different classs of CSR among 200 public listed companies within the assorted industries in Malaysia. This survey found that companies in Malaysia have participated in four classs of CSR which were employee dealingss which had the highest revelation made by the companies, followed by merchandise development, community engagement and environmental. This indicated that the companies had now put more attending on their human resources. However, the writer besides highlighted other grounds for the CSR revelations by Malayan companies, which included adhering to their concern associates overseas which were already using the CSR and besides for the intent of acquiring undertakings from the authorities.

Besides, the degree of consciousness among the corporate citizens on the CSR revelations was bettering as proven by the addition in the per centum of listed companies that disclosed the CSR from 66 per centum in the early 1990 ‘s to 82 per centum in 2004 ( Thompson & A ; Zakaria, 2004 ) as quoted by Amran and A.K ( 2009 ) . On norm, the figure of sentences disclosed by those companies was comparatively low and descriptive in nature which ranged from 85 to 789 sentences and in 1.4 pages to a upper limit of 14.59 pages. Most of them were likely to unwrap the human resources theme instead than the environment, energy, merchandises and community engagement ( Manasseh, 2004 ; Haron et al. , 2004 ; Amran, 2006 ) .

Furthermore, the corporate duty degree in Malaysia presents is turning in footings of the extent of revelations and the figure of companies that disclosed the CSR information. Most of them appreciated their employees with a 82 per centum of the entire revelations and were concerned about the environmental issues but did non unwrap information on the companies ‘ engagement with the community. This implied that the province of the CSR revelations was non in a satisfactory degree to back up the authorities ‘s attempt to turn around the net income devising minded concern to caring corporate citizens ( Janggu et al. , 2007 ) .

In add-on, with the acceptance of the Silver Book ‘s demand by the Malayan houses, it has shown the betterment in footings of engagement of the companies in the CSR disclosures particularly the Government-Linked Companies. However, the affects of the economic downswing in 2007 has warned the companies that they need to lag their engagement in their CSR activities and revelations in order to concentrate on their endurance in the market. This was due to the viing demands of the companies ‘ resources in confronting the fiscal troubles which required them to decently pull off the companies ‘ resources in order to brace the companies ‘ fiscal public presentation.

Current CSR revelations in Malaya

Current surveies have been conducted by several writers to find the extent of the CSR disclosures with the assorted independent variables. Some of them involved ownership constructions ( Mohd Ghazali, 2008 ; Darus et al. , 2009 ) corporate administration mechanism ( Amran & A ; Devi, 2007 ; Lim et al. , 2008 ; Ying et Al, 2008 ; Said et al. , 2009 ) and impact of ordinance imposed by the authorities ( Darus et al. , 2009 ) . They found the grounds that the authorities ownership every bit good as the compulsory revelation demand which was introduced in 2006 have improved the extent of the CSR disclosures every bit compared to household ownership constructions.

Besides that, the extent of the CSR revelations have shown a great betterment in which the authorities through the Silver Book encourages companies to unwrap their CSR activities comprehensively harmonizing to the model of Bursa Malaysia to include information on environment, community, market place and CSR at the workplace.


In decision, CSR disclosures began easy in 1980 ‘s as reported by Teoh and Thong and Andrew et Al. in their 1984 and 1989 surveies. In 1990 ‘s, the research conducted during this period showed the grounds that Malayan corporate citizens have improved the extent of their CSR revelations.

In add-on, better betterments are shown in the mid 2000 ‘s when some of the surveies found that companies in Malaysia non merely focussed on the part to the community but were besides encouraged by the authorities in 2007 to responsibly make good to employees, environment and clients every bit good as their providers as outlined in the Bursa Malaysia model to derive sustainable competitory advantages.


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