Culture, Corporate Governance and Disclosure in Malaysian Corporations

33 Pages Posted: 8 Jan 2003  

R. M. Haniffa

University of Exeter Business School

T. E. Cooke

University of Exeter Business School

Abstract

Evidence from research conducted on corporate accounting indicates that the interaction of environmental factors influences disclosure practices. The purpose of this study is to examine the importance of various corporate governance and cultural (race and education) characteristics, in addition to firm-specific factors, as possible determinants of voluntary (non-mandatory accounting and non-accounting information) disclosures in the annual reports of Malaysian listed corporations. The results of the regression analysis indicate significant associations (at the 5 percent level) between two corporate governance variables (viz. chair who is a non-executive director and domination of family members on boards) and the extent of voluntary disclosure. This finding has implications for corporate governance policy formulation by the Malaysian Institute of Corporate Governance (MISG). One cultural factor (proportion of Malay directors on the board) is significantly associated (at the 5 percent level) with the extent of voluntary disclosure suggesting that governmental focus on culture may solicit a response to secrecy from those who feel threatened.

Keywords: accounting, culture, disclosure, Malaysia, voluntary

JEL Classification: M41, M45, M47, G34

Suggested Citation

Haniffa, R. M. and Cooke, T. E., Culture, Corporate Governance and Disclosure in Malaysian Corporations. Abacus, Vol. 38, No. 3, pp. 317-349, 2002. Available at SSRN: https://ssrn.com/abstract=336822

R. M. Haniffa (Contact Author)

University of Exeter Business School ( email )

Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom
+44 1392 263234 (Phone)
+44 1392 263210 (Fax)

Terry E. Cooke

University of Exeter Business School ( email )

Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom
+44 1392 263239 (Phone)
+44 1392 263210 (Fax)

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