How CSR Is Being Defined in Malaysia?

In Malaysia, CSR is a formal business strategy and obligation that is captured in annual reports and other forms of reporting by organizations. However, it is not a mandatory undertaking in the country. Nevertheless, the voluntary nature of the activity has been handled professionally in many business levels from the small and medium enterprises to the large multinational companies operating in Malaysia. The Securities Commission of Malaysia that oversees activities of public listed companies considers CSR as a natural progression for its owork where it seeks to establish a stable framework for sustain high levels of corporate governance. It is one of the stakeholders pushing for the introduction of CSR into domestic companies, as part of the requirements for the recognition as improved corporate citizens. The move is in line with the ambitions of the Malaysian government, which seeks to make the country ideal for international and domestic institutional investors. Formalization of the CSR activities began in 2008 when the government called on all public listed companies to disclose their CSR activities in their reporting.

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​Are there business practices that might be acceptable within their countries, but would conflict or not be accepted globally?

Several business practices might be acceptable in Malaysia but not go well for the same companies when practiced on a global scale. For example, in Malaysia, CSR engagement is not purely for gaining market competitiveness and highlighting the philanthropic attributes of an organization. Instead, it is a mandatory activity for fitting into the accepted conduct of public companies. In other countries, being a public company does not warrant the practice of CSR. In fact, many companies only go to CSR because they realize that it is a source of gaining a competitive advantage from the improvement of their brand reputation.

In Malaysia, CSR arises mainly as a stakeholder initiative, where the pressure to conform to the expectations of stakeholders leads to participation in particular kinds of CSR activities. This would go differently in the rest of the world. Without stakeholder involvement, many companies would rather engage in CSR that conforms to their internal values and their visions for their respective communities. Embracing an external CSR mandate created by industry stakeholders is a feature that Malaysian companies are doing differently from what the rest of the world appears to do in regards to the goals of CSR activities. Malaysian companies are overlooking the core value of CSR as they seek to implement activities for the sake of reporting. A few companies are doing a good job and have been recognized with some awards for their respective industries, but the number represents a small fraction of good CSR in the country.

​What are examples of companies that appear to be good, bad CSR companies based on their understanding?

Some of the businesses that seem to do good in their CSR endeavors include DiGi, a telecommunication company that was the first one to win the Prime Minister’s CSR Awards in 2004 (Hamid 2011). Other notable examples are Government-linked investment firms (GLICs) and Government-Linked Companies (GLC) that have embraced silver book guidelines on the appropriate ways of contributing to their communities. They engage other non-profit global and domestic organizations in achieving social goals for different communities in Malaysia. They also lead in the public-private-partnerships on social responsibility (UNICEF Malaysia 2012). Construction companies failing to take responsible measures for protecting the environment yet they are certified as environment-friendly show a bad understanding of CSR (Ahmad & Mohamad 2014).

​Are there business practices that might be acceptable within their country, but would not be accepted globally?

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In Malaysia, it is acceptable to do CSR half-heartedly for the sake of reporting. In the rest of the world, CSR embraces best practices and follows a holistic perspective that includes both internal and external stakeholders of an organization. It encompasses valued ethical principles and strategies and ensures that there are sustainable social goals being pursued and reported. On the other hand, for Malaysia, even environmental certification as part of CSR happens as a formality where even supposed green companies are not undertaking activities that conserve the environment. The study showed that most companies conduct environmental disclosures lightly in the construction sector. They do not offer complete nor comprehensive reports. They also focus on general and narrative statements that provide no grounds for verification.

This laxity in reporting arises from the continuous culture of fulfilling government and regulatory obligations without really caring about the communities. Most Malaysian companies have embraced a culture of being less concerned with their community impacts. Thus, they are using corporate social; responsibility activities as a way to maintain their licensure requirements. When these practices are exported to the global scenario, there would be stakeholder upheaval. CSR is supposed to be about the enrichment of social values in a holistic approach. It is understandable that CSR reporting and actual activity might be a mismatch in Malaysia because of the relatively few years of embracing CSR that most companies in the country had. Since mandatory reporting started less than a decade ago, many businesses have been caught napping, and they are yet to understanding the significant role of CSR in their performance in the long term. Besides, the lack of effective mentor organization is also a possible reason for the seemingly lax reporting of CSR activities by companies that are not very keen on the actual CSR activities in their respective society within Malaysia (Ahmad & Mohamad 2014).

Reference List

Ahmad, NNN & Mohamad, NA 2014, ‘Environmental disclosure by the Malaysian construction sector: Exploring extent and quality’, Corporate Social Responsibility and Environmental Management, vol 21, no. 4, pp. 240–252.

Hamid, FZA 2011, ‘Corporate social responsibility by the Malaysian telecommunication firms’, The Issue on Contemporary Issues in Business and Economics, vol 2, no. 5, pp. 198-208.

UNICEF Malaysia 2012, Corporate social responsibility policies in Malaysia: Enhancing the child focus, Web.

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