Siti Mariam Mansor¹,²^♣, Mohamat Sabri Hassan², Romlah Jaffar² and Maizatulakma Abdullah²

¹Faculty of Accountancy, Universiti Teknologi MARA, Selangor, Malaysia
²Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Malaysia

ABSTRACT

Stakeholders have the power to enhance or destroy firms’ value-creation capabilities, hence firms need to balance the interests of all stakeholders. Boards are argued to be the influential actors in this effort, but how boards contribute to stakeholder value creation (SVC) remains ambiguous. Hence, the present study aimed to fill this gap by examining the role of governance in SVC while examining whether the publication of quality integrated reports supports the boards’ role in SVC. The sample consisted of 714 firm-year observations of internationally listed firms that adopted integrated reporting (IR). The content analysis of the integrated reports was utilized covering 2018 to 2020. The results indicated a significant and positive impact of governance on SVC, supporting the notion of the team production theory. The analysis further revealed that IR quality only had a main effect on SVC but not a strengthening effect on the nexus between governance and SVC. These findings provide theoretical support for the boards’ function in advancing financial and non-financial value creation for the stakeholders. The important practical implication is the support that IR is more than mere corporate reports as it acts as a communication tool that facilitates stakeholder relationships, supporting the realization of SVC.

Keywords: Governance, Integrated Reporting Quality, IIRC Framework, Value Creation, Stakeholder Value.

^♣Corresponding Author: Siti Mariam Mansor; Faculty of Accountancy, Universiti Teknologi MARA, Selangor, Malaysia; Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Tel: 60174811109