Corporate Social Responsibility Disclosure and Financial Performance of Shariah PLCS in Malaysia

Abstract

Corporate social responsibility disclosure (CSRD) has become a critical issue, as evidenced by an increasing number of studies conducted in both developed and developing countries. As such, this study will examine the CSRD of Shariah-compliant PLCs in Malaysia and its relationship to financial performance. From 2007 to 2017, 175 Shariah PLCs listed on Bursa Malaysia's Main Market were chosen as samples for this study. The findings indicate that the level of CSRD in Shariah PLCs in Malaysia remains low. Additionally, the CSRD is positively correlated with financial performance (ROA and Tobin's Q). Also, Muslim directors have a negative correlation with financial performance (ROA and Tobin's Q), whereas board size has no such correlation with ROA or Tobin's Q. There is a need for additional encouragement from the Malaysian government or regulatory bodies to encourage all PLCs to include CSR activities in their annual reports, particularly Shariah PLCs in Malaysia. Future research can therefore examine the determinants and extent of CSRD in Shariah and non-Shariah PLCs in Malaysia or by industry or compare Shariah PLCs to other Shariah PLCs in ASEAN countries (Indonesia,

Corporate ethical values disclosure: evidence from Malaysian and Indonesian top companies

“…Malaysian companies lack comprehensive disclosure in their whistleblowing policies (Ahmad et al, 2018), have a low level of CSR disclosure (Wan Jusoh and Ibrahim, 2017;Ramba et al, 2018) and have a low level of integrated reporting disclosure (Ghani et al, 2018). Even Shariah-compliant businesses have been found to withhold information required by Islamic law (Shariah), such as zakat (Islamic levy) information (Muhammad and Mohd Hanefah, 2020) and a low level of disclosure for CSR (Aziz and Haron, 2020). The Securities Commission and the Malaysian Government's involvement in addressing this issue is still required.…”

“…Even Shariah -compliant businesses have been found to withhold information required by Islamic law ( Shariah ), such as zakat (Islamic levy) information (Muhammad and Mohd Hanefah, 2020) and a low level of disclosure for CSR (Aziz and Haron, 2020). The Securities Commission and the Malaysian Government’s involvement in addressing this issue is still required.…”

“…Even Shariah-compliant businesses have been found to withhold information required by Islamic law (Shariah), such as zakat (Islamic levy) information (Muhammad and Mohd Hanefah, 2020) and a low level of disclosure for corporate social responsibility (Aziz and Haron, 2020) areas to disclose in the annual report: remuneration policies and procedures. This may explain, in part, why Malaysian companies are reluctant to disclose information (Jaafar et.…”

Corporate Social Responsibility and Performance of Listed Pharmaceutical Sector Firms in Nigeria

“…Corporate social responsibility includes the discretionary philanthropic, ethical, legal, and economic expectations the society has towards organizations at a given time (Sameer, 2021) Globalization of the economy and society advances in science and technology, and increased access to information are just a few of the causes that have highlighted the value of moral behavior and corporate social responsibility. Today, CSR has become a strategy which organizations use as an instrument to enhance their marketing image, customer satisfaction, and stakeholder's acceptance (Aziz & Haron, 2021) and improve long-term performance. Discretionary philanthropic, ethical, legal, and economic obligations are the four pillars of Carroll's (1991) social responsibility for business is based on a pyramid of principles.…”

“…A company's legal obligation involves meeting the standards set by a law-abiding society. Direct or indirect actions that increase the company's profit or stock price fall within the purview of economic responsibility (Aziz & Haron, 2021).…”