Corporate Social Responsibility Disclosure in Malaysia

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CHAPTER 1

Research Proposal

1.0 TITLE OF RESEARCH

Corporate social responsibility disclosure in Malaysia

2.0 INTRODUCTION

Social Accounting (such as corporate social responsibility) is becoming an emerging topic among the people in corporate world. It was defined as the individual items reporting; for instance, health, reducing pollution, and safety measures by U.K Government’s Green Paper in 1997. It is also defined as the voluntary disclosures of information (qualitative and quantitative) by Mathews in 1993. Moreover, CSR was determined as the quantity of reported costs and advantages which begins from economic activities and benefit to the whole society. CSR is usually performed with the aim to improve important aspects of society or community relations. According to Deegan and Rankin (1997), CSR should involve the revelation of information to stakeholders (customers, shareholders, suppliers, etc.), and providing feedbacks to management to improve environmental innovations. The annual reports provide highly effective in promoting image of corporate. As a result, there are many organizations in the world using their annual reports as a media to transmit CSR information recently.

3.0 BACKGROUND OF RESEARCH

Malaysia has significant changes in the economical and social movement in the past years. And one of the main issues which occurred radically in the world in general and Malaysia in particular, is corporate social responsibility. As we know in developing country like Malaysia, CSR plays an important role to ensure long-term business success for corporations. CSR can be applied in company’s policies, strategies or commitments toward society and environment. So, the sudden increase on the subject has attracted much attention. According to Fukukawa and Moon’s research (2004), Malaysia falls into the number of countries which have a relatively low level and vision of CSR involvement. It is ranked number 7 out of 9 showing the sluggish involvement in implementing CSR. Follow to Teoh and Thong’s study in 1984, there was a lack of CSR reporting which did not show information on the CSR corporate performance. And in lately survey of ACCA (2004), 43% of companies revealed CSR information in their annual reports, despite the low involvement of CSR reporting by all other firms in the country. CSR framework introduced by Bursa Malaysia in 2006 aimed at investigating in Malaysian companies’ current status pertaining to CSR disclosures. Besides, many other surveys have been conducted such as social performance by Abdul Rashid and Abdullah in 1991, social reporting by Mohamad and Ahmad 2002. Moreover, during the year 2002, Nik Ahmad & Abdul Rahman along with Abdul Rashid & Ibrahim have done researches on the perception and point of view of Malaysian managers towards Social Accounting. These researches will focus on trends and the level of CSR practices and awareness on previous discussion, especially in public companies which have been listed in the Bursa Malaysia CSR framework.

4.0 THE IMPORTANT OF CSR DISCLOSURE

Companies realize that they can contribute to the development of the company by promoting economic growth, increasing competitiveness in addition to environmental protection and social responsibility commitments. Thus, the sustainability of business is not only in maximizing profits but also through responsible behaviour and market orientation.

Non- financial reporting has become an important factor which to create transparency for a firm’s actions with responsibilities on social and environmental issues. It is driven by potential business value created through stakeholder reporting and communication. And it is necessary to CSR disclosure informs the public about implementation process corporate’ social responsibility and describe the impact of company for operating in a given environment. During operations, companies take up resources...
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