The Effect of Corporate Governance on Sustainability Disclosure: Evidence in Singapore

Abstract

This study investigated the effect of corporate governance on the quality of sustainability disclosures among companies listed on the Singapore Exchange (SGX). Using a quantitative approach, the research analyzed sustainability reports from 312 SGX-listed firms, selected based on their governance and transparency rankings. The study employed the Sustainability Reporting Index (SRI) derived from the Global Reporting Initiative (GRI) framework, encompassing economic, environmental, and social dimensions. Through multiple regression analyses, the study examined the influence of key board characteristics—board size, board independence, board gender diversity, CEO duality, and board tenure—on overall sustainability reporting quality and its three individual dimensions: economic, social, and governance. The findings revealed that board size and board gender diversity are significant positive predictors of overall sustainability disclosure quality, particularly in the environmental and social domains. Board tenure also positively affected environmental reporting, underscoring the value of experience and knowledge accumulation in sustainability matters. Conversely, board independence and CEO duality showed no significant impact on sustainability disclosures in this context. Among firm-level attributes, institutional ownership positively correlated with more detailed economic and environmental reporting, indicating the role of investors in driving transparency. The study highlights that sustainability reporting in Singapore remains uneven across the three dimensions, with economic disclosures lagging behind environmental and social aspects. The research contributes to the literature by unpacking the differential effects of corporate governance variables on distinct dimensions of sustainability reporting, offering practical insights for regulators, investors, and corporate leaders. It suggests that regulators could encourage enhanced reporting quality by promoting broader adoption of global sustainability frameworks such as the International Sustainability Standards Board (ISSB) and emphasizing the assurance of sustainability reports. This is critical to uphold Singapore’s reputation as a premier regional investment hub in Asia to attract foreign investment. Moreover, the findings underscore the importance of diverse and experienced boards in advancing corporate sustainability agendas. Future research could explore additional governance factors and apply qualitative methods to deepen understanding of board members' perspectives on sustainability reporting.