ASIAN CONFERENCE ON ENTREPRENEURSHIP (ACE 2018)

Transcription

1 ENTREPRENEURSHIP ON THE ONE BELT ONE ROAD March 22-23, 2018 NilaiSprings Resort Hotel Nilai, Malaysia

2 PERCEPTION OF NON-GOVERNMENT LINKED PUBLIC LISTED COMPANIES TOWARDS CORPORATE SOCIAL RESPONSIBILITY AS REFLECTED IN THEIR ANNUAL REPORTS DAMAYA DEVI SAMU November, 2017 ASIAN CONFERENCE ON ENTREPRENEURSHIP (ACE 2017) 2

3 WHY CSR consumers are prioritizing Corporate Social Responsibility and compelling corporations to be accountable for impacting social changes via their business beliefs, practices and profits. Governments will not be able to handle issues that arise from the direct or indirect result of activities carried out by companies 3

4 CONSUMER POWER 60 percent of Americans prefer businesses to be voluntary agents - bring about social and environmental changes without interference by the government and. 87 % of the respondents also claimed that they would buy a product if that company gave its support for an issue that they care about. 76 % of the respondents will reject a product or service rendered by a company whose support contradict with their beliefs (Cone Communications, 2017). 4

5 DEFINITION CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. (The World Business Council for Sustainable Development,2002) It refers to a company linking itself with ethical values, transparency, employee relations, compliance with legal requirements and overall respect for the communities in which they operate. (McComb, M. 2002)] 5

6 DEFINITION CSR is also defined as an entity that is beyond law, through law, for law (McBarnet,et. al. 2009). With the fallout of giant corporations, CSR became the salvaging tool of image building for most companies (Buniamin, 2008). 6

7 CSR IN MALAYSIA CSR Silver Book exhibits guidelines to evaluate the effectiveness of CSR policies. Bursa Malaysia launched a CSR framework focused on four areas - environment, workplace, community and the marketplace ( UNICEF MALAYSIA, 2013). Bursa Malaysia - mandatory for all PLCs to disclose its CSR activities in its annual reports. A description of the corporate social responsibility activities or practices undertaken by the listed issuer and its subsidiaries or if there are none, a statement to that effect. 7

8 CSR IN MALAYSIA The CSR framework by Bursa Malaysia - 5 September This framework which identifies four main focus areas, namely environment, workplace, community and marketplace acted as a set of guidelines for public listed companies to carry out CSR activities.. The Malaysian government had structured incentives for businesses that had planned and carried out CSR activities. 8

9 AGENTS INSTRUMENTAL IN COMPELLING BUSINESSES TO DISCLOSE CSR ACTIVITIES The Putrajaya Committee on GLC High Performance (PCG) outlined a CSR approach for GLCs in its Silver Book publication The Economic Planning Unit and Ministry of Finance set tax incentives and budget allocations for CSR-targeted initiatives, The Securities Commission and Bursa Malaysia that manages the stock exchange and regulatory framework for PLCs that incorporated mandatory CSR reporting requirements, The Companies Commission of Malaysia manages the registration processes for all business entities The Malaysian Institute of Integrity (MII) aims to develop a nation of high integrity that is resilient and embraces universal good values (UNICEF MALAYSIA, 2013). 9

10 THE STUDY 15 public-listed non-government linked companies were randomly selected. annual reports for the year 2017, published by Bursa Malaysia were examined. classified under various themes according to their business dealings : consumer products, industry, construction, trading/services, infrastructure projects, properties, plantations and technology. 10

11 RESULTS eleven had disclosed CSR separately. one mentioned CSR in its Statement of Corporate governance and another mentioned it in its Sustainable Business. two which were directly involved in consumer products did not mention CSR activities in their annual reports. 11

12 INFERENCE contain little data that could be quantified not provided with a standard format for their CSR disclosures. multiple parties- the Government, Bursa Malaysia and the Companies Commission of Malaysia - raise awareness and encourage companies to include CSR as a part of business operations. 12

13 SIZE OF FIRM AND CSR DISCLOSURES a clear relationship between size of companies and CSR disclosure (Amran & Devi, 2008). concerns with higher earnings per share will highlight more on their CSR undertakings in order to reduce cost of equity capital and to attract interested investors ( Dhaliwal, et al. 2011). 13

14 SIZE OF FIRM AND CSR DISCLOSURES bigger concerns which carry out CSR activities on a larger scale are able to have a greater impact on community. have a larger number of shareholders - get more attention from the public.- translates to greater pressure to carry out impactful CSR activities (Amran & Devi, 2008). 14

15 LIMITATIONS annual reports of companies for relates to a single year. other CSR disclosures like press release, promotional leaflets, flyers and other documents. sample size is small, CSR disclosures are minimal does not not reflect all Malaysian non-government linked public listed companies. the content analysis method - subjectivity. the results may not be generalizable. 15

16 RECOMMENDATIONS Future studies - quality and depth of the disclosures. Measure the reporting levels for CSR for a longer period, consider enlarging the sample to include all listed companies. 16

17 REFERENCES Amran, A. and S.S. Devi, Corporate Social Reporting in Malaysia: A Political Theory Perspective. Malaysian Accounting Review, 6 (1): [ Buniamin, S., Alrazi, B., Johari, N., & Rahman, N. (2008). An investigation of the association between corporate governance and environmental reporting in Malaysia. Asian Journal of Business and Accounting, 1(2),

18 REFERENCES Bursa Malaysia (n.d.). Bursa Malaysia Official Websites. Cone Communications (2017). CSR Study: Consumers Want Brands That Share Their Values & Dhaliwal,D.S., Tsang, A., Yong, G. Y., Zhen Li, O. ( 2010). Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting. The Accounting Review 86(1) October. 18

19 REFERENCES McBarnet, D., Voiculescu, A. and Campbell, T. (2009). The new accountability: Corporate social responsibility and the law Cambridge: Cambridge University Press. Michael McComb (2002), Profit to be found in companies that care, South China Morning Post, April 14, [Online] as cited in A Guide to Corporate Social Responsibility (CSR) UNICEF MALAYSIA (2013). CSR Policies in Malaysia.[ World Business Council for Sustainable Development (2002). Making the Business Case for Sustainable Development. 19