Integrated reporting quality in Malaysia: Do chairman attributes matter?

Figures & data

Table 1. Sample selection

Details	Observations
Company-year observations that apply IR	378
Less: Company-year observations that are being delisted from Bursa Malaysia	(4)
Less: Company-year observations due to duality between CEO and Chairman	(11)
= Company-year observations in final sample	363

Table 2. IRQ scoring model

(1) Background	(2) Assurance and reliability	(3) Content elements and fundamental concepts	(4) Form
x = 0; ✓ = 1	x = 0; ✓ = 1	x = 0; ✓ = 3	x = 0; ✓ = 3
• Motivation for adopting IR	• Internal audit of the report	• Organizational overview & external environment	• Readability and clarity
• Objectives pursued by the IR	• Third-party verification of the report	• Business model	• Conciseness
• Document beneficiaries/ recipients	• Acknowledgements and awards for the report	• Risks & opportunities	• Accessibility
• Person in charge of the IR process		• Strategy & resource allocation
• CEO letter demonstrating sustainability commitment		• Governance
• Title of IR		•Performance
• Consistency with generally applied disclosure standards		• Outlook
		• Basis of presentation
		• Financial capital
		• Manufactured capital
		• Intellectual capital
		• Human capital
		• Social and relationship capital
		• Natural capital
		• Value creation process
Maximum score: 7	Maximum score: 3	Maximum score: 261	Maximum score: 9

Table 3. Research variables description

Variables	Description
Dependent variable
IRQ	Percentage of the number of IR items disclosed to the total items that should be disclosed in the IR checklist (280 scores)
Independent variables
CHAIRAGE	Chairman age in years
CHAIRTEN	Number of the years in which the present board chairman has been serving in this position
CHAIREDULEV	Dummy variable: “1” = a chairman has a postgraduate degree, and “0” = otherwise
CHAIRFEXP	Dummy variable: “1” = a chairman holds financial qualifications or has previous financial expertise, and “0” = otherwise
CHAIROWN	Percentage of shares owned by a chairman
Control variables
BSIZE	Number of directors on the board
BINDEP	Percentage of an independent board of directors
CEOAGE	Age of the CEO in years
CEOTEN	Number of years the present CEO has held this position in the company
CSIZE	Natural log of the total assets
DR	Total debt/Total assets
ROA	Net income/Total assets
OWNCON	Percentage of shares held by the top five largest shareholders
AFSIZE	Dummy variable: “1” = the company is audited by BIG4 auditors, and “0” = otherwise
CSRCOM	Dummy variable: “1” = if there is a CSR committee in the company, and “0” = otherwise

Table 4. Descriptive analysis of research variables

Variables	Mean	SD	Min	Median	Max
IRQ	54.474	9.297	31.429	55.000	68.929
CHAIRAGE	67.774	8.930	44.000	69.000	88.000
CHAIRTEN	8.588	9.642	0.331	5.462	49.262
CHAIREDULEV	0.479	0.500	0.000	0.000	1.000
CHAIRFEXP	0.336	0.473	0.000	0.000	1.000
CHAIROWN	7.279	17.416	0.000	0.000	78.444
BSIZE	8.532	1.937	5.000	8.000	13.000
BINDEP	0.532	0.130	0.273	0.500	0.857
CEOAGE	55.325	8.211	34.000	55.000	78.000
CEOTEN	7.280	8.382	0.416	4.523	41.719
CSIZE	15.854	1.703	11.744	15.693	20.455
DR	22.932	15.981	0.000	21.210	65.493
ROA	5.364	7.701	−14.150	4.000	34.410
OWNCON	62.621	16.440	24.641	64.910	87.700
AFSIZE	0.843	0.364	0.000	1.000	1.000
CSRCOM	0.738	0.440	0.000	1.000	1.000

Notes: Number of observations = 363. All research variables are defined in Table 3.

Table 5. Pearson correlation matrix of all variables

Variables	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)	(14)	(15)	(16)
(1) IRQ	1.00
(2) CHAIRAGE	−0.04	1.00
(3) CHAIRTEN	−0.22***	0.46***	1.00
(4) CHAIREDULEV	0.05	−0.16***	−0.07	1.00
(5) CHAIRFEXP	0.10**	−0.12**	−0.14***	−0.18***	1.00
(6) CHAIROWN	−0.15***	0.13**	0.43***	−0.11**	−0.15***	1.00
(7) BSIZE	0.28***	−0.07	−0.17***	0.02	0.04	−0.01	1.00
(8) BINDEP	0.22***	0.05	0.02	0.14***	0.13**	−0.14***	−0.22***	1.00
(9) CEOAGE	0.03	0.10*	0.09*	−0.10*	0.01	0.08*	0.04	−0.05	1.00
(10) CEOTEN	−0.18***	0.10*	0.13**	−0.20***	−0.03	0.09*	0.07	−0.21***	0.51***	1.00
(11) CSIZE	0.44***	0.17***	0.02	0.02	0.10*	0.10*	0.22***	0.21***	0.06	−0.05	1.00
(12) DR	0.16***	−0.01	−0.16***	−0.03	0.04	0.03	0.16***	−0.08	0.05	−0.04	0.15***	1.00
(13) ROA	−0.10**	−0.02	−0.01	0.10*	−0.05	−0.04	−0.04	−0.13**	−0.12**	0.03	−0.24***	−0.12**	1.00
(14) OWNCON	0.16***	−0.04	−0.09*	0.02	0.02	−0.06	0.00	0.13**	−0.11**	−0.26***	0.17***	0.02	0.01	1.00
(15) AFSIZE	0.10*	−0.04	−0.06	−0.03	0.07	−0.13**	0.22***	0.06	−0.05	−0.11**	0.34***	0.10*	−0.03	0.29***	1.00
(16) CSRCOM	0.03	0.04	0.03	−0.04	−0.08	0.08	−0.01	−0.03	0.08	0.10**	0.03	−0.21***	0.01	0.08	0.10**	1.00
VIF	-	1.64	1.97	1.41	1.19	1.58	1.36	1.70	1.54	1.64	2.12	1.33	1.40	1.40	1.38	1.78

Notes: ***, **, and * indicate significance at 0.01, 0.05, and 0.10 levels, respectively. All research variables are defined in Table 3.

Table 6. PCSE regression results on chairman attributes and IR quality

Variables	Model (1)	Model (2)	Model (3)	Model (4)	Model (5)	Model (6)
CHAIRAGE	−0.063					−0.025
	(−1.557)					(−0.702)
CHAIRTEN		−0.097***				−0.050**
		(−3.105)				(−2.209)
CHAIREDULEV			0.497			0.647
			(0.745)			(0.950)
CHAIRFEXP				0.697		0.463
				(1.217)		(1.007)
CHAIROWN					−0.070***	−0.056***
					(−4.982)	(−4.840)
BSIZE	0.847***	0.822***	0.856***	0.867***	0.918***	0.853***
	(9.375)	(7.454)	(10.211)	(10.171)	(10.981)	(8.152)
BINDEP	7.771***	6.582***	7.691***	7.658***	6.234***	5.279***
	(4.347)	(4.319)	(4.207)	(5.037)	(4.834)	(4.361)
CEOAGE	0.152***	0.149***	0.150***	0.147***	0.147***	0.146***
	(3.306)	(3.389)	(3.346)	(3.219)	(3.596)	(3.616)
CEOTEN	−0.236***	−0.228***	−0.234***	−0.237***	−0.240***	−0.228***
	(−4.586)	(−4.398)	(−4.619)	(−4.987)	(−5.152)	(−4.439)
CSIZE	2.695***	2.586***	2.633***	2.630***	2.687***	2.637***
	(12.434)	(14.980)	(13.743)	(15.666)	(16.083)	(12.650)
DR	0.018*	0.015*	0.019*	0.018	0.023**	0.022***
	(1.782)	(1.960)	(1.663)	(1.541)	(2.097)	(3.045)
ROA	0.060*	0.054*	0.054*	0.056*	0.054*	0.054*
	(1.714)	(1.661)	(1.731)	(1.870)	(1.943)	(1.783)
OWNCON	0.030**	0.033**	0.032**	0.034**	0.034***	0.033**
	(2.323)	(2.372)	(2.490)	(2.487)	(2.616)	(2.386)
AFSIZE	0.426	0.512	0.542	0.399	−0.324	0.013
	(0.265)	(0.354)	(0.313)	(0.244)	(−0.199)	(0.008)
CSRCOM	1.203*	1.164*	1.166	1.227	1.343*	1.349*
	(1.706)	(1.691)	(1.607)	(1.595)	(1.826)	(1.674)
Constant	−6.576***	−7.499***	−9.875***	−9.876***	−9.675***	−6.349***
	(−2.637)	(−2.657)	(−3.207)	(−3.233)	(−3.382)	(−2.816)
Year-fixed-effects	Included	Included	Included	Included	Included	Included
Industry-fixed-effects	Included	Included	Included	Included	Included	Included
Observations	363	363	363	363	363	363
R^2	0.762	0.770	0.762	0.762	0.755	0.767
Wald Chi^2	36.04	33.50	28.73	26.26	31.29	37.52
Prob>Chi^2	0.000	0.000	0.000	0.000	0.000	0.000
Breusch and Pagan test						193.85 ***
Hausman test						50.79***
Heteroscedasticity test						4.30***
Autocorrelation test						426.126***

Notes: z-statistics in parentheses. ***, **, and * indicate significance at 0.01, 0.05, and 0.10 levels, respectively. All research variables are defined in Table 3.

Table 7. Alternative dependent variable measurements by PCSE regression

Variables	Coef.	Z-value	P-value
CHAIRAGE	−0.029	−0.594	0.552
CHAIRTEN	−0.066**	−2.377	0.017
CHAIREDULEV	0.688	0.806	0.420
CHAIRFEXP	0.624	0.998	0.318
CHAIROWN	−0.069***	−4.782	0.000
BSIZE	1.077***	6.920	0.000
BINDEP	7.693***	3.738	0.000
CEOAGE	0.212***	3.832	0.000
CEOTEN	−0.308***	−3.791	0.000
CSIZE	3.502***	14.258	0.000
DR	0.030***	2.743	0.210
ROA	0.057	1.254	0.006
OWNCON	0.045***	3.002	0.003
AFSIZE	0.203	0.095	0.924
CSRCOM	1.281	1.145	0.252
Constant	−16.023***	−4.794	0.000
Year-fixed-effects	Included
Industry-fixed-effects	Included
Observations	363
R^2	0.703
Wald Chi^2	47.41
Prob>Chi^2	0.000

Notes: ***, **, and * indicate significance at 0.01, 0.05, and 0.1 levels, respectively. All research variables are defined in Table 3.

Table 8. PCSE regression results for alternative measurements for independent and control variables

Variables	Coef.	Z-value	P-value
CHAIRAGE	−1.104	−0.47	0.640
CHAIRTEN	−0.064***	−2.94	0.003
CHAIREDULEV	0.817	1.39	0.164
CHAIRFEXP	0.629	1.28	0.200
CHAIROWN	−1.308***	−4.29	0.000
BSIZE	0.822***	7.85	0.000
BINDEP	6.353***	5.16	0.000
CEOAGE	0.144***	3.55	0.000
CEOTEN	−0.216***	−4.14	0.000
CSIZE	2.509***	14.31	0.000
DR	0.056*	1.81	0.070
ROA	0.034**	2.02	0.044
OWNCON	0.030***	4.22	0.000
AFSIZE	0.290	0.19	0.847
CSRCOM	1.613*	1.69	0.092
Constant	−3.184	−0.41	0.681
Year-fixed-effects	Included
Industry-fixed-effects	Included
Observations	363
R^2	0.758
Wald Chi^2	14.52
Prob>Chi^2	0.000

Notes: ***, **, and * indicate significance at 0.01, 0.05, and 0.1 levels, respectively. All research variables are defined in Table 3.