Social and Environmental Risks: The Role of Board Members

Abstract:

Corporations are increasingly being pressured to manage their business risks including their social and environmental risks. It is important that stakeholders are being informed about such risks and their risk management strategies to ensure the accountability and transparency of managers in managing such risks. The aim of this study is to examine the extent to which plantation companies in Malaysia address their social and environmental risks management issues and the role of the board of directors particularly board characteristics in motivating the disclosure of risk management information. The agency theory was used to underpin arguments for the study. Content analyses of the annual and sustainability reports of forty (40) publiclisted companies in the plantation industry for the year 2013 was undertaken to examine the quantity of risk management disclosure among these companies. The data for the multiple regressions was analyzed using the Structural Equation Modelling technique of Partial Least Squares (SEM-PLS).