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The Reluctance to Disclose Social Information: The Effect of Culture and Religion

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Abstract:

Even though corporate social disclosure in Malaysia is still at its infancy stage there is already a concentration of research on the ‘state of the art’ of corporate social reporting. Most researches attempted to provide evidence of the relationship between certain corporation characteristics and social disclosure. These studies have identified that the disclosure patterns, themes, characteristics and reasons for disclosure are somewhat parallel with those of their western counterparts. Social information disclosed by these corporations is influenced by a variety of economic, social, and political factors. The political system and type of economy, the stage of economic development, the social climate, the legal system, management structure of corporations, the nature and stage of development of the capital market and cultural factors are all important issues that determine the extent to which information is publicly disclosed (see, for example, Dierkes 1972, 1973; Bartholomaii 1973; Eichhorn 1974; Gray 1988; Perera 1989).

To date, there is not a single in-depth study conducted on the reasons why managers are reluctant to disclose social information. Explanation for Western managerial reluctance to disclose voluntary information may include rationales of costliness, lower information value, the fear of giving sensitive information in view of competition, and the risk of confusing the readership (see for example, Chanda & Greenball 1977). Also there is this argument that increase disclosure will encourage society to demand yet more of the business organisation, both in its social role and in the reports it issues (see Cheng 1976). Explanation for Malaysian managerial reluctance could be similar to those of the west but it is a well known fact that in the Asia-Pacific region, modesty, secrecy and religion are fundamental cultural values. Perhaps the inclination to keep corporate affairs a matter of internal interest is still strong as reflected by this culture.

The purpose of this chapter is to seek the reason why Malaysian corporations are reluctant to disclose social information in their annual reports. It will initially explore the similarities and differences in the cultural environment that affect the development of corporate social reporting in the West and Malaysian. It will then proceed to explain the reasons for nondisclosure. Lastly, the chapter will provide some rebuttals against their reasons for non-disclosure.

Document Type: Research Article

DOI: http://dx.doi.org/10.5848/CSP.0231.00005

Publication date: January 1, 2006

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  • Globalization and Social Responsibility
    There are however many different perspectives upon what is meant by corporate social responsibility and how this might be applied within organisations. This book explores some of these different perspectives based upon the experiences of different people in different parts of the world. This book recognises the international scope of the interest in corporate social responsibility both through the contributions made by the authors of the respective chapters, who come from various parts of the world, and also through the international importance of the perspectives offered by these contributors.
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