Citation: Qaderi, S.A.; Ghaleb,
B.A.A.; Hashed, A.A.; Chandren, S.;
Abdullah, Z. Board Characteristics
and Integrated Reporting Strategy:
Does Sustainability Committee
Matter?. Sustainability 2022, 14, 6092.
https://doi.org/10.3390/su14106092
Academic Editor: Andrea Pérez
Received: 20 April 2022
Accepted: 15 May 2022
Published: 17 May 2022
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sustainability
Article
Board Characteristics and Integrated Reporting Strategy:
Does Sustainability Committee Matter?
Sumaia Ayesh Qaderi
1,2,
* , Belal Ali Abdulraheem Ghaleb
3
, Abdulwahid Ahmed Hashed
4,
* ,
Sitraselvi Chandren
2
and Zaimah Abdullah
2
1
Department of Accounting, College of Commerce and Economics, Hodeidah University,
Hodeidah 9673, Yemen
2
Tunku Puteri Intan Safinaz School of Accountancy, College of Business, Universiti Utara Malaysia,
Sintok 06010, Malaysia; sitraselvi@uum.edu.my (S.C.); zaimah2258@uum.edu.my (Z.A.)
3
Institute for Strategic and Sustainable Accounting Development (ISSAD), Tunku Puteri Intan Safinaz School
of Accountancy, College of Business, Universiti Utara Malaysia, Sintok 06010, Malaysia;
b.ali.abdlraheem@uum.edu.my
4
Department of Accounting, College of Business Administration, Prince Sattam Bin Abdulaziz University,
Al-Kharj 16273, Saudi Arabia
* Correspondence: sumaia.qaderi.2020@gmail.com (S.A.Q.); aa.abdullah@psau.edu.sa (A.A.H.)
Abstract: Integrated reporting (IR) is the latest topic in corporate reporting that has raised interest in
the disclosure literature. Although the board’s role in IR practice has received significant attention in
developed countries, this effect is still unexamined in an emerging market like Malaysia. Thus, this
study sought to fill this gap in the IR literature by investigating the impact of the board of directors’
characteristics on the quantity and quality of IR disclosure. The study also examined whether the
existence of a sustainability committee affects the board-IR relationship. The study used all listed
companies in Bursa Malaysia that applied IR strategy from 2017 to 2020 to test the hypotheses. It
employed a content analysis technique to measure the quantity and quality of IR using an index
with 100 items based on the International Integrated Reporting Council guidelines. Multivariate
ordinary least squares (OLS) regression was applied to examine these relationships. The analysis
showed that board size, independence, gender diversity, and non-executive remuneration were
positively and significantly related to greater IR disclosure, suggesting that the board of directors
has a monitoring role in reducing agency problems and protecting stakeholders’ interests. However,
multiple directorships did not affect IR disclosure. The analysis also showed that the presence of
a sustainability committee positively affected IR disclosure, and had a moderating effect on the
board-IR disclosure relationship. Our result was robust to alternative measures of the corporate board
and an alternative regression model. This study is among the first to provide empirical evidence
of the board and sustainability committee’s significant role in enhancing IR strategy. The findings
may benefit regulatory bodies, policymakers, company managers, investors, and researchers in better
understanding how directors’ characteristics influence companies’ IR practices.
Keywords: integrated reporting; board of directors; sustainability committee; agency theory; resource
dependency theory; Malaysia
1. Introduction
In recent years, the topic of integrated reporting (IR) and its disclosure has received
substantial attention from regulators, professionals, and academics [1]. IR is a new trend in
corporate reporting, representing a paradigm shift from traditional reporting of financial
and non-financial information separately to combining the two in a single report [2,3]. It
represents the company’s capacity to create value over time [4], enabling it to improve
decisions relating to internal resource allocation and improve risk management [5]. IR
also allows companies to meet other stakeholders’ information requirements, contributing
Sustainability 2022, 14, 6092. https://doi.org/10.3390/su14106092 https://www.mdpi.com/journal/sustainability