The Relationship Between Corporate Governance Quality and Sustainability Reporting: An Analysis of Top Performing Companies and Financially Distressed Companies

10 Chapter 1: Introduction . 12 1.1 Background . 13 1.2 Motivation . 14 1.3 Research methodology . 17 1.4 Outline of the Dissertation . 18 1.5 Chapter Summary. 18 Chapter 2: Literature Review . 19 2.1 CSR/Sustainability Reporting . 19 2.2 Corporate Governance . 23 2.3 Sustainability Reporting and Corporate Governance . 26 2.4 Characteristics of Corporate Governance . 30 2.4.1 Outside/Independent Director . 30 2.4.2 Gender diversity . 32 2.4.3 Board size . 34 2.4.4 Board Professionalism and Knowledge . 36 2.4. 5 CEO Duality . 37 2.4. 6 Audit Committee. 38 2.4. 7 Big 4 External Auditors . 40 2.5 Legitimacy theory . 41 The relationship between corporate governance and sustainability reporting: An analysis of top performing companies and financially distressed companies in Malaysia. 4 | P a g e 2.6 Chapter Summary. 42 Chapter 3: Research Methodology . 43 3.1 Methodology and Method . 43 3.2 Sampling and data selection . 47 3.3 Data Collection Method and Data Analysis . 49 3.3.1 Corporate Governance Characteristics . 50 3.3.1.1 Scoring – Corporate Governance . 51 3.3.2 Sustainability Reporting/CSR Disclosure . 52 3.3.2.1 Content analysis . 52 3.3.2.2 Scoring Sustainability Reporting . 53 3.3.2.3 Hyphotheses . 54 3.4 Dependent variable, independent variable and control variables . 55 3.5 Model used . 56 3.6 Statistical Analysis . 56 3.7 Chapter Summary. 56 Chapter 4: Qualitative Findings and Discussion . 58 4.1 Corporate Governance Quality and Sustainability Reporting Quality . 58 4.1.1 Gender Diversity . 59 4.1.2 Board size . 61 4.1.3 Education level and professionalism. 63 4.1.4 CEO Duality . 64 4.1.5 Independent Directors . 65 4.1. 6 Audit committee . 67 4.1. 7 Big 4 Auditors . 69 4.2 Information disclosed in sustainability reporting . 69 4.2.1 General . 70 4.2.2 Human Resource . 71 The relationship between corporate governance and sustainability reporting: An analysis of top performing companies and financially distressed companies in Malaysia. 5 | P a g e 4.2.3 Community . 73 4.2.4 Environment. 74 4.2.5 Products/Services . 75 4.3 Corporate Governance Quality and Sustainability Reporting Quality . 77 4.4 Summary . 77 Chapter 5: Quantitative Results and Interpretation of Results . 79 5.1 Descriptive Statistics . 79 5.2 Bivariate Analysis . 83 5.3 Regression Results . 85 5.4 Interpretation of Results Using Legitimacy Theory . 88 5.5 Summary . 94 Chapter 6: Conclusions, Limitations and Suggestions for Further Research. 95 6.1 Conclusion . 95 6.2 Limitations and suggestions for future research. 99 References . 101 Appendix A: Breakdown of Sample Companies . 110 Appendix B Sustainability Reporting Measuring Instrument . 111 Appendix C: . 112 Appendix C1: Corporate Governance Quality Top Listed Companies . 112 Appendix C 2: Corporate Governance Quality Mid-Capitalisation . 113 Appendix C 3: Corporate Governance Quality . 114 Appendix C 4: Corporate Governance Quality Financially Distressed Companies 115 The relationship between corporate governance and sustainability reporting: An analysis of top performing companies and financially distressed companies in Malaysia. 6 | P a g e Appendix C 5: Corporate Governance Quality ACE Market . 116 Appendix D . 117 Appendix D 1: Sustainability Reporting Quality Top Listed Companies. 117 Appendix D 2: Sustainability Reporting Quality Mid Capitalisation . 118 Appendix D 3: Sustainability Reporting Quality Small Capitalisation . 119 Appendix D 4: Sustainability Reporting Quality Financially Distressed Companies . 120 Appendix D 5 : Sustainability Reporting Quality . 121 The relationship between corporate governance and sustainability reporting: An analysis of top performing companies and financially distressed companies in Malaysia. 7 | P a g e List of Figures Figure 1:Convergent Parallel Mixed Methods (Adapted from Creswell, 2014), . 45 Figure 2:Women on board – Top companies . 60 Figure 3:Women on board – Financially distressed companies. 60 Figure 4:Comparison of women on board . 61 Figure 5: Board size of top listed companies and financially distressed companies . 62 Figure 6: Percentage of sample companies achieving optimum b