The aim of this study is to examine to what extent corporate governance quality influences the sustainability reporting of companies listed in Malaysia. I was motivated to find out whether companies comply with the recommendations provided in MCCG 2012 and followed the guidelines suggested in Sustainability Reporting Guide 2015. The study made use of legitimacy theory which conceptualizes that companies will disclose information that is mandatory to show that their business operations are legitimate or they are good corporate citizens.

This study differentiates itself from prior research on the relationship between corporate governance and sustainability reporting in Malaysia by examining the influence of corporate governance quality (using the corporate governance characteristics as proxy) on sustainability reporting. Another difference is the sample consists of companies from different market capitalisation; top listed, mid-capitalisation, small-capitalisation, financially distressed companies and companies from ACE Market (alternative market) in Bursa Malaysia.

This study made used of mixed research methodology. The first stage of this study examined the corporate governance characteristics and sustainability disclosures of top listed companies and financially distressed companies using qualitative content analysis. The next stage quantified both the scores of corporate governance characteristics and sustainability disclosures. As for sustainability reporting, a measuring instrument comprising 22 checklists were used to measure the disclosures made in sustainability disclosures of each sample companies. For this stage of the study, the sample companies were extended to include, mid-capitalisation, small-capitalisation and companies from ACE Market.

The results of qualitative method corroborated with the results of quantitative method. The study found that there is a significant relationship between corporate governance quality and sustainability reporting. Beside corporate governance quality, the study examined other variables such as market capitalisation, size, leverage, profitability and industry type and their relationship with sustainability reporting.
This study can be of benefit to policy makers, companies and those who are interested in improving the disclosures in sustainability reporting. Of greater significance is the study’s consideration of the corporate governance quality instead of just individual characteristics.

There are many benefits of examining further the relationship between corporate governance quality and sustainability reporting. Future research can consider looking at other aspect of corporate governance characteristics’ that were not used as proxy of quality in this study such as institutional ownership; government ownership and family ownership and the effect on sustainability reporting. Future research can look at extending this research to cover more years to look at the quality of disclosures over the period.