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Exploration of the Association between Audit Committee Effectiveness and Sustainability Reporting During a Disclosure Regime Change
... While prior research has placed extensive emphasis on the role of traditional board committees such as AC, there are studies emphasizing that EC is critical for non-financial disclosure in general and carbon disclosures in particular. In this regard, (Valle et al., 2019) stated that corporations that form EC tend to be more environmentally transparent. Besides, the EC may play a crucial role in balancing corporate financial and non-financial goals and decreasing stakeholders' conflicts of interest. ...
This study investigates the impact of the board of directors' effectiveness (BODEF), audit committee effectiveness (AUDEF), and institutional ownership (IO) on carbon disclosure quality (CDQ) and examines the moderating effect of the environmental committee (EC) on such impacts. Thus, to evaluate CDQ, a self‐constructed index was established based on standards and recommendations stated in several Malaysian and international guidelines related to carbon reporting. This study employs panel data analysis on 200 publicly listed Malaysian firms observed from 2015 to 2019. The findings showed a significant positive effect of BODEF, AUDEF, and IO on CDQ. Additionally, the results showed that EC has an insignificant moderating influence on the impact of BODEF and AUDEF on CDQ; meanwhile, it strengthens the effect of IO on CDQ. The reported findings offer valuable insights to policymakers, enhancing their awareness of carbon disclosure practices in Malaysia and emphasizing the significance of corporate governance in this context.
... While prior research has placed extensive emphasis on the role of traditional board committees such as AC, there are studies emphasizing that EC is critical for non-financial disclosure in general and carbon disclosures in particular. In this regard, (Valle et al., 2019) stated that corporations that form EC tend to be more environmentally transparent. Besides, the EC may play a crucial role in balancing corporate financial and non-financial goals and decreasing stakeholders' conflicts of interest. ...
This study assesses the effect of the board of directors' attributes, environmental committee (EC), and institutional ownership (IO) on carbon disclosure quality (CDQ) from the perspectives of legitimacy and agency theories in Malaysia. This study collects and analyzes data based on 1000 observations of firms from carbon‐intensive industries from 2015 to 2019. The effect of the board of directors' attributes, EC, and IO on the CDQ was observed using a panel data regression model. The study revealed a significant positive relationship between board independence, board size, female representation, EC, IO, and CDQ. These findings suggest that carbon disclosure awareness is rising in Malaysia as firms have gradually integrated corporate governance (CG) best practices into their business strategies. To the best of our knowledge, this is the first study to examine the factors that influence CDQ in Malaysian businesses. This study identified firms with a higher CDQ using a new global reporting initiative‐based carbon reporting index. This expands the literature on carbon disclosures. This study focuses on carbon‐intensive industries, which might not reflect Malaysia's current CDQ situation. Thus, future research should focus on other sectors to fully grasp the current state of the CDQ in Malaysia and offer new perspectives on emerging markets. The findings may benefit a vast group of regulatory bodies in assessing Malaysian firms' responses to local and international carbon guidelines.
This research aims to investigate the impact of audit committees, liquidity, leverage, and return on assets (ROA) on the sustainability reporting of firms. Additionally, the study conducts a comparative analysis of sustainability reporting practices between Pakistani food companies and BRICS food companies. The collected data included 360 samples of food companies for the period 2017-2022, including data from Pakistan and the top five (05) emerging market economies comprising BRICS, namely Brazil, Russia, India, China, and South Africa. Secondary data was employed in this study, utilizing information from sustainability reports and annual reports. Logistic regression analysis was used to analyze the results. The findings indicate that audit committee members and independent audit committee members significantly impact sustainability reporting, while audit committee meetings, board meetings, and liquidity do not. These findings provide valuable insights for investors seeking to understand the determinants of sustainability reporting, as well as for researchers exploring the interplay between corporate governance and financial performance in emerging markets. Furthermore, this study contributes to the literature by highlighting the relationship between audit committees, liquidity, and sustainability reporting in the context of the food sector in Pakistan and BRICS countries.
The aim of this research is to examine the impact of three audit committee characteristics on corporate social and environmental responsibility (CSR) disclosure: the existence of an audit committee, audit committee independence, and audit committee financial expertise. Moreover, this research analyzes the moderating effect of board gender diversity between these audit committees' attributes and CSR reporting. The results of analyzing 13,178 firm‐year observations of non‐financial companies show that the presence of an audit committee and audit committee financial expertise are positively associated with CSR disclosure. However, a higher proportion of non‐executive directors in audit committees has a negative effect on the disclosure of CSR information. These findings suggest that some audit committees' features play an important role in ensuring the reporting of environmental, social, and economic information. Our evidence also indicates that the presence of female directors on boards increases the positive impact of financial expert membership of audit committees on CSR disclosure, while women directors moderate any negative effect of the percentage of independent directors on audit committees on CSR reporting by increasing the latter. In addition, female directors moderate the positive impact of the existence of an audit committee on the disclosure of CSR information by reducing the latter.
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