Corporate social reporting in Malaysia : the current state of the art and future prospects

Corporate social reporting has, since the early seventies, attracted the interest of various user groups. As a result, a long history of research into corporate social disclosure practice is observable in developed countries particularly the United States and Western Europe. However, very little attention has been focused on developing countries. This research investigates the extent of corporate social disclosure in Malaysia, the type of disclosure made and the relationship between disclosure practice and company characteristics. The study also seeks to understand why corporations in Malaysia are disclosing social information. A content analysis is presented, centring on 100 1993 annual reports of major Malaysian companies, to find the extent of disclosure and personal interviews are conducted to find out the reasons for disclosure. Content analysis demonstrates that Malaysian companies are actively disclosing social information with size of company being a major determinant factor. Human resource information is the main social theme disclosed. Personal interviews reveal that most companies are disclosing social information due to top management awareness together with a desire to comply with the government's social policy and enhance corporate image. The study highlights the communication gap that exists between Providers and users of social information and the dilemma faced by companies in seeking a balance between transparency and Islamic teachings. The research provides further insights towards an understanding of the reasons for social disclosure in developing countries where the culture, values and religious beliefs are different from those of western countries.