BEYOND TRANSPARENCY: FEMALE DIRECTORS AND CONSERVATIVE SUSTAINABILITY DISCLOSURE PRACTICES
DOI:
https://doi.org/10.35631/AIJBES.829005Keywords:
Board Gender Diversity, Female Directors, Sustainability Reporting Quality, Critical Mass, Conservative Reporting, GreenhushingAbstract
Board gender diversity is often linked to greater governance, accountability, and sustainability reporting. Previous research, however, have shown inconsistent results, suggesting that female on board may influence sustainability disclosure in a different way than is commonly presumed. To fill this research gap, this study aims to extend an empirical literature on the relationship between female directors and sustainability reporting quality (SRQ) among Malaysian-listed firms. This study used panel data analysis with data collected from 77 Malaysian-listed firms from 2021 to 2023. Board gender diversity was measured by the proportion of female directors to the total number of directors on the board. The quality of sustainability reporting was assessed using an index developed based on the Bursa Malaysia Sustainability Reporting Framework and related sustainability toolkits. The index examined the extent and quality of sustainability disclosure. The results showed a strong negative relationship between female board representation and SRQ. By using Critical Mass Theory, this study further analyses the negative effect of female on board and SRQ. The result confirmed that the negative correlation becomes greater when women account for more than 30% of the board and companies appoint three or more female directors. This conclude that companies with higher female representatives have lower SRQ scores. In addition, this study adds to the literature on board gender diversity, sustainability reporting, and Critical Mass Theory by demonstrating that increased female representation may lead to more conservative disclosure practices rather than more broad reporting. The findings also offer practical implications for regulators and policymakers, by suggesting that more sustainability disclosure rules may be required to minimise selective reporting and lower the possibility of greenwashing behaviour.
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