Governance, Accountability and Transparency Level of Non-Profit Organisation: A Study Of Malaysian Foundations
Abstract
Earlier research on corporate governance in Malaysia tended to concentrate on businesses listed on the Bursa Malaysia. This study employs the content analysis method and examines the degree of governance, accountability, and transparency across 45 CLBG Foundations in Malaysia to further explore corporate governance. The two key criteria used to choose the sample were the foundations incorporated as a company limited by guarantee (CLBG) with the CCM and those that are subsidiaries of the parent company listed on the Bursa Malaysia. Analysis shows that most of the CLBG Foundations did not have their own websites and did not publish annual reports. Malaysian CLBG Foundations were found to still have low accountability, transparency, and governance, which supports the need for a law requiring NPOs, specifically CLBG Foundations, to disclose information about themselves to enhance their governance, accountability, and transparency. More stringent regulations will enhance the foundations' governance, accountability and transparency, and boost stakeholder confidence to continue their support and donations. The government should also design a good governance code suitable for the adoption of all Malaysian NPOs in Malaysia. We also recommend the creation of a single regulatory body responsible for monitoring the operations and activities of all NPOs in the country.
References
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Steane P. (2001). Governance: Convergent expectation, divergent practices. Corporate Governance, 1(3), 15-19.
Tripathi KL. (2016), Corporate Accountability: A Review. SSRG International Journal of Economics and Management Studies. 3(6), 101-104. https://www.researchgate.net/publication/314648863_Corporate_Accountability_A_Review
Wellen L & Jegers M. (2014). Effective governance in non-profit organisations: A literature based on multiple stakeholder approach. European Management Journal, 32, 223-243.
Xu L., Zhang S., Liu N., & Chen L. (2018). Corporate hypocrisy: Role of non-profit corporate foundations in earnings management of for-profit founder firms. Sustainability, 10(11), 3991. https://doi.org/10.3390/su10113991
Yuesti A., Novitasari LG., & Rustiarini NW. (2016). Accountability of non-government organization from the perspective of stakeholder theory. International Journal of Accounting and Taxation, 4(2). https://doi.org/10.15640/ijat.v4n2a7
Ali NSAM & Ramli NM. (2020). Governance Reporting in Humanitarian Philanthrophic Organizations. Journal of Islamic Social Science and Humanities, 22(2), 95-126.
Ali, NSS & Ong FW (2020). Non-Profits in Malaysia: Perception of Accountability and Reporting Framework. 4th UUM International Qualitative Research Conference. https://qualitative-research-conference.com/download/proceedings-2020/215.pdf
Amartey LA, Yu, M & Chukwu-lobelu, O. (2019). Corporate governance in Ghana: An analysis of board accountability in Ghanaian listed banks. Journal of Financial Regulation and Compliance, 27(2), 126–140. https://doi.org/10.1108/jfrc-12-2017-0111
Banding, MP & Mayangsari S. (2017). The Impact of Financial and Non-Financial Information Disclosure to Donation Decision in Non-Profit Organization by Individual Donor (A True-Experiment Research). Research Journal of Finance and Accounting, 8(16). https://www.iiste.org/Journals/index.php/RJFA/article/view/38478
Boyd Brian K., & Haskisson Robert E. (2010). Corporate Governance of Business Groups. The Oxford Handbook of Business Group. Oxford University Press. Retrieved from https://doi.org/10.1093/oxfordhb/9780199552863.003.0024
Chen J., Dyball MC, & Harrison G. (2019). Stakeholder salience and accountability mechanisms in not‐for‐profit service delivery organizations. Financial Accountability & Management, 36(1), 50–72. https://doi.org/10.1111/faam.12217
Deloitte (2018), The effective not-for-profit board: A value-driving force. Retreived from https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/public-sector/ca-en-public-sector-effective-npo-board.pdf
Dhanani A. and Connolly C. (2012). Discharging not‐for‐profit accountability: UK charities and public discourse. Accounting, Auditing & Accountability Journal, 25(7), 1140-1169. https://doi.org/10.1108/09513571211263220
Freeman RE. (1994). The politics of stakeholder theory: Some future directions. Business Ethics Quarterly, 4(4): 409-421.
Harun M.S. (2021). The Downward Vs Upward Accountability Practices: A Study of Malaysian-Palestine Non-Government Organizations (NGOs). The International Islamic Economic System Conference – The 9th I-iECONS 2021. https://oarep.usim.edu.my/jspui/handle/123456789/13400
Hyndman, N. & McKillop D. (2018). Public Services and charities: Accounting, Accountability and Governance at a time of change. The British Accounting Review, 50(2), 143–148. https://doi.org/10.1016/j.bar.2018.01.001
Jensen MC & Meckling WH. (1976). Theory of the firm: Managerial behavior, agency cost and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Khotami M. (2017). The concept of accountability in good governance. Proceedings of the International Conference on Democracy, Accountability and Governance (ICODAG 2017). https://doi.org/10.2991/icodag-17.2017.6
Liu Z., Sun S., Hu X., & He X. (2019). Socialized charitable foundations and Accounting Information Quality. China Journal of Accounting Studies, 7(4), 467–488. https://doi.org/10.1080/21697213.2019.1755945
Mahamud MH, Arshad R., Ismail AM, & Nair R. (2021). Determinants of non-profit organisations accountability information disclosure: Empirical evidence in Malaysia. Journal of Management Information and Decision Sciences, 24(1), 1-15. https://www.abacademies.org/articles/determinants-of-nonprofit-organisations-accountability-information-disclosure-empirical-evidence-in-malaysia-11749.html
Musawa, MS (2019). Communicated Accountability of Charitable Organisations: The Case Of Nigeria. Jurnal Ekonomi Bisnis Dan Kewirausahaan , 8(1), 33–49. https://doi.org/http://dx.doi.org/10.26418/jebik.v8vi1.31157
Nasir NM, Othman R., Said J. & Ghani EK (2009). Financial Reporting Practices of Charity Organisations: A Malaysian Evidence. International Bulletin of Business Administration, 2009(6), 19-27.
Nordberg D. (2020). Who’s in charge, in whose interest? The experience of ownership and accountability in the charity sector. Management Research Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MRR-04-2020-0190
Roslan N., Arshad R., & Mohd Pauzi, NF. (2017). Accountability and governance reporting by non-profit organizations. SHS Web of Conferences, 36. https://doi.org/10.1051/shsconf/20173600041
Shah, SZA., Zainon S., Othman, AA., & Sundram, VPK. (2016). Web-based disclosure: A comparative study between Malaysian and Singaporean non-profit organisations. Information, 19(9B), 4051–4056. https://link.springer.com/article/10.1007/s12208-021-00330-2
Steane P. (2001). Governance: Convergent expectation, divergent practices. Corporate Governance, 1(3), 15-19.
Tripathi KL. (2016), Corporate Accountability: A Review. SSRG International Journal of Economics and Management Studies. 3(6), 101-104. https://www.researchgate.net/publication/314648863_Corporate_Accountability_A_Review
Wellen L & Jegers M. (2014). Effective governance in non-profit organisations: A literature based on multiple stakeholder approach. European Management Journal, 32, 223-243.
Xu L., Zhang S., Liu N., & Chen L. (2018). Corporate hypocrisy: Role of non-profit corporate foundations in earnings management of for-profit founder firms. Sustainability, 10(11), 3991. https://doi.org/10.3390/su10113991
Yuesti A., Novitasari LG., & Rustiarini NW. (2016). Accountability of non-government organization from the perspective of stakeholder theory. International Journal of Accounting and Taxation, 4(2). https://doi.org/10.15640/ijat.v4n2a7
Published
2023-03-31
How to Cite
LOKMAN, Norziana; OTHMAN, Sarina; MOHD KAMAL, Nur Aida.
Governance, Accountability and Transparency Level of Non-Profit Organisation: A Study Of Malaysian Foundations.
International Journal of Business and Technology Management, [S.l.], v. 5, n. 1, p. 304-318, mar. 2023.
ISSN 2682-7646.
Available at: <https://myjms.mohe.gov.my/index.php/ijbtm/article/view/21953>. Date accessed: 05 dec. 2024.
Section
Articles
