Corporate integrity practices and value creation: case evidence from Malaysian government owned companies

Integrity has been recognised as a fundamental key to the success and sustainability of an organisation. The role of integrity in addressing issues of corruption, misconduct, and other integrity non-compliance activities has positioned Corporate Integrity Practices (CIPs) as one of the initiatives undertaken to ensure that business operations are conducted in accordance with established ethical and moral values for organisations, particularly within Government-Owned Companies (GOCs). The pressure for GOCs to uphold higher standards of integrity is intensified by their reliance on public funding and the need to demonstrate social accountability. Moreover, CIPs are viewed as a component of sustainability that offers opportunities for value creation. However, the consistency of integrity compliance and the capacity of CIPs to create organisational value remain questionable, due to variations in the implementation and contextual factors of different organisations. Furthermore, studies focusing on value creation through CIPs remain limited, particularly within the context of Malaysian GOCs. Therefore, this study addresses the existing literature gaps by offering additional insights into how CIPs contributes to the creation of economic, environment, social and governance (EESG) values. In particular, this study focuses on five (5) fundamental issues on CIPs; current CIPs carried out in the GOCs, the motivating factors of CIPs, the critical success factors (CSFs) of CIPs, CIPs and EESG value creation and the role of integrity and governance unit (IGU) in enhancing integrity compliance within the GOCs. These issues are examined using multiple case study approach on two GOCs, where each of them represents federal and state government-owned companies respectively. This study uses institutional, legitimacy and dynamic capability theory to underpin the overall conceptual framework, explaining the drivers, processes, and value outcomes of corporate integrity practices. The findings reveal that there are five (5) current CIPs which are whistleblowing, internal control, core values, disciplinary action and integrity training and education have been adopted by the companies are able to create values in terms of economic, environment, social and governance (EESG). The study also finds out that government enforcement, norms and competition are the factors that have driven the GOCs to adopt CIPs. The result further reveals that the success of CIPs within the GOCs context is highly influenced by ethical leadership, commitment, communications and culture. Finally, align with the Guidelines for Integrity Unit and Governance Management and the Core Function Implementation Procedures, this study agrees that IGU in both GOCs have performed their role as a key player in the enhancement of integrity compliance. The findings of this study provide valuable opportunity for the practitioners to gain a better understanding of how CIPs can be leveraged to strengthen integrity compliance. For academicians, the insights from this study also contribute to the body of knowledge particularly in the role of IGU and CIPs enhancement which leads to EESG value creation.Integrity has been recognised as a fundamental key to the success and sustainability of an organisation. The role of integrity in addressing issues of corruption, misconduct, and other integrity non-compliance activities has positioned Corporate Integrity Practices (CIPs) as one of the initiatives undertaken to ensure that business operations are conducted in accordance with established ethical and moral values for organisations, particularly within Government-Owned Companies (GOCs). The pressure for GOCs to uphold higher standards of integrity is intensified by their reliance on public funding and the need to demonstrate social accountability. Moreover, CIPs are viewed as a component of sustainability that offers opportunities for value creation. However, the consistency of integrity compliance and the capacity of CIPs to create organisational value remain questionable, due to variations in the implementation and contextual factors of different organisations. Furthermore, studies focusing on value creation through CIPs remain limited, particularly within the context of Malaysian GOCs. Therefore, this study addresses the existing literature gaps by offering additional insights into how CIPs contributes to the creation of economic, environment, social and governance (EESG) values. In particular, this study focuses on five (5) fundamental issues on CIPs; current CIPs carried out in the GOCs, the motivating factors of CIPs, the critical success factors (CSFs) of CIPs, CIPs and EESG value creation and the role of integrity and governance unit (IGU) in enhancing integrity compliance within the GOCs. These issues are examined using multiple case study approach on two GOCs, where each of them represents federal and state government-owned companies respectively. This study uses institutional, legitimacy and dynamic capability theory to underpin the overall conceptual framework, explaining the drivers, processes, and value outcomes of corporate integrity practices. The findings reveal that there are five (5) current CIPs which are whistleblowing, internal control, core values, disciplinary action and integrity training and education have been adopted by the companies are able to create values in terms of economic, environment, social and governance (EESG). The study also finds out that government enforcement, norms and competition are the factors that have driven the GOCs to adopt CIPs. The result further reveals that the success of CIPs within the GOCs context is highly influenced by ethical leadership, commitment, communications and culture. Finally, align with the Guidelines for Integrity Unit and Governance Management and the Core Function Implementation Procedures, this study agrees that IGU in both GOCs have performed their role as a key player in the enhancement of integrity compliance. The findings of this study provide valuable opportunity for the practitioners to gain a better understanding of how CIPs can be leveraged to strengthen integrity compliance. For academicians, the insights from this study also contribute to the body of knowledge particularly in the role of IGU and CIPs enhancement which leads to EESG value creation.