Exploring the Effect of Ownership Concentration, Board Independence and <scp>SDG</scp> Reporting: Malaysian Evidence

ABSTRACT As the global sustainability agenda continues to gain momentum, especially within the United Nations Sustainable Development Goals framework, it becomes more critical to understand the underpinning governance mechanisms that drive corporate SDG disclosure in developing countries. Although ownership concentration (OWNC) is a characteristic feature of the corporate governance structure in most emerging markets, its impact on sustainability transparency has remained relatively unexplored. This paper explores how OWNC influences SDG disclosure in developing economies and whether board independence (BIND) influences this nexus. Using 572 firm‐year observations for top‐listed companies in Malaysia (2017–2023), the study employs OLS regression results with cluster‐robust standard errors. Based on agency theory, the findings indicate that the fundamental role of OWNC is to significantly mitigate SDG disclosure. On the other hand, findings show that independent directors are strong positive moderators of the OWNC‐SDG disclosure relationship. Our results are robust to various econometric techniques, including logistic regression, Newey‐West regression and endogeneity checks, such as Heckman's two‐stage estimation. Our findings have implications for shareholders, investors, regulatory authorities and policymakers by highlighting the essential role of independent directors in strengthening SDG disclosure. Contributing to the sparse literature on this topic, particularly regarding the moderating role of BIND, allows us to explain the OWNC‐SDG disclosure nexus.