ASSESSING THE INFLUENCE OF ETHICAL LEADERSHIP BEHAVIOURS, LEADERSHIP STYLES AND LEADER ROLES AS DETERMINANTS OF ONLINE CORPORATE SOCIAL RESPONSIBILITY (CSR) DISCLOSURES IN MALAYSIA Nazahah Abd Rahim A thesis submitted to The University of Gloucestershire in accordance with the requirements of the degree of Doctor of Philosophy in the Faculty of Applied Science June 2016 Abstract Currently corporate scandals are making headlines in the news. Stakeholders are demanding transparency through better information disclosure in order to curtail this problem and to regain trust. Businesses must find better and more effective ways of communicating not only financial but also non-financial information to these stakeholders. Information disclosures in both annual reports and on websites are important but the two media are used differently. Online CSR disclosures provide timely information and will meet stakeholders’ demands for greater speed and volume of information disclosure. Therefore, the aim of this study is to investigate the current level of online CSR disclosures among public listed companies in Malaysia, with particular reference to the influence of leadership variables. This study seeks to explain any variations in online CSR disclosures by using the following variables as the explanatory factors: ethical leadership behaviours, consisting of people orientation, fairness, power sharing, concern for sustainability, ethical guidance, role clarification and integrity; leadership styles, comprising transactional and transformational leadership styles; and leader roles. In investigating this issue, a quantitative approach was employed using a sample of 100 top Malaysian public listed companies. The data collection started with examining corporate websites using a disclosure index, followed by a questionnaire survey to grasp employees’ opinions on their leaders’ ethical leadership behaviours, leadership styles and leader roles. Due to the limitations of a quantitative approach, seven semi- structured interviews with managers were conducted to give context to the quantitative findings as well as supplement the data. The results show that Malaysian companies’ level of online CSR disclosure was low and the majority of companies did not fully utilise their websites to disseminate CSR information, although all the companies had websites. The results of the multiple regression indicated that ethical guidance, concern for sustainability and integrity contributed to the amount of CSR information disclosed on the Malaysian companies’ websites but interestingly, these were inverse relationships. Consequently, the interview findings revealed that not all leadership variables were perceived by managers to be determinants of online CSR disclosures. The inverse relationships were possibly due to factors such as leader’s confidence, moral recognition, personal recognition, external factors and cultural factors. This research contributes to the understanding of corporate voluntary disclosure strategies through the focus on online CSR disclosure. Prior disclosure studies emphasize financial, accounting and economic related variables as determinants to online CSR disclosures. This study provides a new insight for company leaders, policy makers and academics on how the behaviours of leaders, who are key corporate players, can impact the setting of CSR goals and enhance transparency by disclosing online. i | P a g e Author’s Declaration I declare that the work in this thesis was carried out in accordance with the regulations of the University of Gloucestershire and is original except where indicated by specific reference in the text. No part of the thesis has been submitted as part of any other academic award. The thesis has not been presented to any other education institution in the United Kingdom or overseas. Any views expressed in the thesis are those of the author and in no way represent those of the University. Signed: ……………………………………. Date: 27 June 2016 ii | P a g e Dedication To my late father Abd Rahim Salleh iii | P a g e Acknowledgement Thank you Allah for giving me the ability to pursue this doctoral study successfully. The co-operation and help of many people have made the completion of this study possible. I would like to express my sincere appreciation and great respect to these people who have helped and encouraged me throughout my PhD. journey. I wish to express my deepest appreciation to my sponsor, Majlis Amanah Rakyat (MARA) for funding my study. Without their scholarship, I would not have been able to pursue this study and be where I am right now. I would like to express my sincerest gratitude to my supervisors, Dr. David Biggs and Dr. Doaa Aly from the University of Gloucestershire, for their guidance, patience, time and enthusiasm throughout the stages of my PhD. As this is a cross-disciplinary study, I must say that I was lucky to be working with these exceptional individuals; David from the Psychology department and Doaa from the Accounting department. I learnt a lot from both worlds although at times we had our differences. Their thoughtful and invaluable comments helped me to improve the study and the thesis significantly. Also, not to forget, to Edward Kingsley Trezise (my former supervisor) who has inspired me to learn about CSR. I am grateful to my friends in Malaysia, the respondents of the questionnaire survey and the participants of my interviews for their help and time. Without their help and willingness to participate, it would have been very difficult for me to collect the data and complete this study. I am indebted to my husband, Mr. Nan Mahadhir Muhamad, for many sacrifices he has made for me. This thesis is also dedicated to him and to my wonderful children Naufal, Wafa and Nihad. Their forbearance, constant love and emotional support have been the source of my motivation in completing this PhD. To my mother who has taught me the value of patience and diligence in life, thank you mama for your endless prayers. Also, I am grateful to Irah, my younger sister who looks after mama, especially when I was away in the United Kingdom fulfilling my lifelong dream. Last but not least, to my colleagues, Nita, Rosnia, Maryam, Vivian and Yan, thank you for your honesty, understanding and for always being there. You guys are such a blessing! iv | P a g e v | P a g e Table of Contents LIST OF TABLES .............................................................................................................................. 11 LIST OF FIGURES ............................................................................................................................ 12 ........................................................................................................................................ 13 INTRODUCTION ............................................................................................................................... 13 1.1 SETTING THE SCENE ............................................................................................................. 13 1.2 BACKGROUND AND MOTIVATION......................................................................................... 14 1.2.1 Problem statement ........................................................................................................... 17 1.3 OVERVIEW OF CSR DISCLOSURE IN MALAYSIA ................................................................... 22 1.4 RESEARCH GAPS .................................................................................................................. 23 1.4.1 Research aim and research questions .............................................................................. 25 1.4.2 Summary of research objectives and research methods .................................................. 27 1.5 SIGNIFICANCE OF THE STUDY ............................................................................................... 29 1.6 CONTRIBUTIONS OF THE STUDY ........................................................................................... 32 1.7 SCOPE OF THE STUDY ........................................................................................................... 34 1.8 STRUCTURE OF THE THESIS .................................................................................................. 37 1.9 PRESENTATION OF CHAPTERS .............................................................................................. 38 ........................................................................................................................................ 41 ONLINE CSR DISCLOSURE: A LITERATURE REVIEW ......................................................... 41 2.1 INTRODUCTION ..................................................................................................................... 41 2.2 CORPORATE SOCIAL RESPONSIBILITY .................................................................................. 41 2.2.1 The concept and definition .............................................................................................. 41 2.2.2 Manifestations of CSR .................................................................................................... 45 2.2.3 The terminology .............................................................................................................. 46 2.3 COMMUNICATING CSR ........................................................................................................ 47 2.3.1 The background of CSR reporting .................................................................................