Exploring the impact of media publicity on annual report environmental disclosures

This research extends the developing-country environmental disclosure literature by exploring managerial perceptions of different environmental events and the impact of media coverage on management's decision to provide annual report environmental disclosure (ARED) voluntarily. Using the broad lens of stakeholder theory, a Malaysian experiment is initiated to gain insights into the type of environmental disclosure approach preferred by management. The study also examines whether these preferences are affected by such factors as: (1) the perceived significance of the environmental event; (2) the stakeholder's potential behaviour; and (3) the impact of media publicity on the featured event. Three hypothetical vignettes are used featuring environmental events of varying nature and impact to human health and the environment. The results suggest that the influence of media coverage on management's preferred ARED approach is most pronounced when the event is of negative nature and is generally 'unobtrusive' such that the stakeholders concerned have less direct experience on the issue. This research, although exploratory in nature, provide evidence that the application of stakeholder theory combined with the media agenda setting theory has the potential to enhance our understanding of how corporate entities behave particularly in the context of a rapidly developing economy such as Malaysia.