Positive Deviance Behaviour In Corporate Environmental Reporting Practices: The Influences Of Ceo’s And Board Of Director’s Past Environmental Related Experience
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Date
2016-09
Authors
Jaaffar, Amar Hisham
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Abstract
Various institutional pressures such as global environmental awareness toward sustainability mega forces; CSR mandatory requirement, sustainability guidance and training provided to firm’s key governance decision makers; and voluntary reporting guidelines have been associated with a heightened tendency for Malaysian environmentally sensitive companies to publish a variety of information topics in corporate environmental reports. Although these institutional pressures should lead to organizational isomorphism in CER practices (the growing similarity of organizations’ CER practices in a field), nevertheless the extent and the quality of Malaysian firms CER practices are significantly inconsistence where there were some firms which still do not publish environmental information in their reporting mechanism (negative deviance behaviour); some firms disclosed their environmental information in order to comply with various institutional pressures (compliance behaviour); and some firms disclosed their proactive environmental management practices in their reporting mechanisms beyond what is require by institutional pressures (positive deviance behaviour). This study examines the current extents of CER practices of Malaysian environmentally sensitive industry based on environmental strategically-framed index which can capture firm behaviours in CER practices. This study also explores the roles of CEO’s and board of director’s past environmental related experiences and it relationship with Malaysian environmentally sensitive firm’s positive deviance behaviours in CER practices. This
study conducts interpretative approach of content analysis of secondary data such as published annual and sustainability reports, and others disclosures from company websites obtained from 209 Malaysian environmentally sensitive companies from year 2010 to year 2014. The analysis results revealed that from year 2010 to year 2014, 36 percent of the firms have deviate negatively from institutional pressures, 49 percent of the firms have comply with institutional pressures; and 14.8 percent of firms have deviate positively from institutional pressures related to CER practices. Firms’ which deviate positively from institutional pressures in their CER practices provide their environmental management practices which can shifting society towards becoming more environmental sustainable rather than less environmental unsustainable. Furthermore, results also revealed that the process-based and content-based past environmental related experience of CEO and board of directors incite firm to deviate positively in CER practices. The interaction effect of CEO and board of directors with past environmental experience create negative synergies to firm’s positive deviance behaviour in CER practices under the specific firm contingencies such as older and lower financial performance firms, while in young firms the result is otherwise. Based on these findings, theoretical and practical implications were delineated.
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Keywords
Various institutional pressures such as global environmental awareness , toward sustainability mega forces.