The recommendation to adopt integrated reporting, incorporated into Malaysia's corporate governance code in 2017, is a crucial practice for fostering sustainable business development. It provides a holistic approach by combining financial and non-financial information, thus guiding companies towards successful sustainable development. Despite its recognised importance, some large companies in Malaysia have opted to depart from this recommendation of integrated reporting, providing explanations for their departure as required. However, the quality of these departure explanations remains underexamined, particularly under the "Comprehend, Apply and Report" (CARE) approach outlined in the Malaysian Code on Corporate Governance (MCCG). This study aims to assess the quality of these departure explanations, which is vital for ensuring transparency and accountability in corporate governance. The research uses a content analysis method to examine Corporate Governance Reports (CG Reports) from a sample of large Malaysian companies from 2018 to 2020. A checklist constructed based on the Bursa Malaysia Listing Requirements was employed to evaluate the adequacy and meaningfulness of the explanations provided by companies. The findings reveal that a majority of companies did not provide substantial or meaningful explanations for their departure from integrated reporting. Instead, boilerplate and generic statements were frequently used, offering little insight to stakeholders regarding the companies' decisions. Out of 169 companies analysed over the three years, only 17 provided explanations that met the adequate standards of the listing requirements. These findings have significant implications for policymakers and regulators, highlighting the need for stricter enforcement to improve the quality of disclosures in CG Reports. Enhancing the quality of departure explanations is essential for transparency, informed decision-making, and, ultimately, for advancing sustainable corporate practices in Malaysia. In addition, future research could investigate why large companies did not adopt integrated reporting. Gaining insight into these reasons could pave the way for improved adoption once these challenges have been effectively addressed.
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