KINERJA PERUSAHAAN NON KEUANGAN DI INDONESIA DITINJAU DARI UKURAN DEWAN DIREKSI DAN PENGUNGKAPAN KEBERLANJUTAN

Aida Yulia, Mumthazul Hayya, Mumthazul Hayya

Abstract


Financial performance is one measure of a company’s success. This research aims to investigate the influence of Board Size and Sustainability Disclosure on the Financial Performance of companies (a case study on non-financial companies listed on the Indonesia Stock Exchange from 2018 to 2021). The data used in this research is secondary data obtained from annual reports and sustainability reports, with a total sample size of 36 non-financial companies listed on the IDX for the period 2018-2021. The analytical method used in this research is panel data regression analysis using the Random Effect Model. This study provides three main findings. First, the research results indicate that board size and sustainability disclosure simultaneously influence the financial performance of the company. Second, board size does not significantly affect the financial performance of the company. Third, sustainability disclosure significantly affects the financial performance of the company. This research provides benefits for stackholders to make sustainability disclosure one of the reports considered for making investment decisions.

Keywords


Size of the Board of Directors, Sustainability Disclosure, Financial Performance, Non-Financial Companies

Full Text:

PDF PDF

References


Affes, W., & Jarboui, A. (2023). The Imapct of Corporate Governance on Financial Performance: A Cross-Sector Study. International Journal of Disclosure and Governance. https://doi.org/10.1057/s41310-023-00182-8

Aguilera, R. V., Desender, K., Bednar, M. K., & Lee, J. H. (2015). Connecting the Dots: Bringing External Corporate Governance into the Corporate Governance Puzzle. Academy of Management Annals, 9(1), 483–573. https://doi.org/10.5465/19416520.2015.1024503

Amrigan, A. R. P., Hamidi, M., & Adrianto, F. (2023). The Effect of Sustainability Report Disclosure Compliance on the Company’s Financial Performance. Journal of Social Research, 2(4), 1028–1038. https://doi.org/10.55324/josr.v2i4.692

Arora, A., & Sharma, C. (2016). Corporate governance and firm performance in developing countries: evidence from India. Corporate Governance (Bingley), 16(2), 420–436. https://doi.org/10.1108/CG-01-2016-0018

Artene, A., Bunget, O. C., Dumitrescu, A. C., Domil, A. E., & Bogdan, O. (2020). Non-financial information disclosures and environmental protection-evidence from Romania and Greece. Forests, 11(8), 1–16. https://doi.org/10.3390/f11080814

Assenga, M. P., Aly, D., & Hussainey, K. (2018). The Impact of Board Characteristics on The Financial Performance of Tanzanian Firms. Corporate Governance: The International Journal of Business in Society, 18(6), 1089–1106. https://doi.org/10.1108/CG-09-2016-0174

Bose, S., Shams, S., Ali, M. J., & Mihret, D. (2022). COVID-19 impact, sustainability performance and firm value: international evidence. Accounting and Finance, 62(1), 597–643. https://doi.org/10.1111/acfi.12801

Buallay, A., Hamdan, A., & Barone, E. (2020). Sustainability reporting and firm ’ s performance Comparative study between manufacturing. International Journal of Productivity and Performance Management ·, 69(3), 431–445. https://doi.org/10.1108/IJPPM-10-2018-0371

Cossin, D., & Hongze Lu, A. (2017). The Four Tiers of Conflict of Interest Faced by Board Directors. International Institute for Management Development. https://www.imd.org/research-knowledge/corporate-governance/articles/the-four-tiers-of-conflict-of-interest-faced-by-board-directors/

Dincer, B., Keskin, A. İ., & Dincer, C. (2023). Nexus between Sustainability Reporting and Firm Performance: Considering Industry Groups, Accounting, and Market Measures. Sustainability (Switzerland), 15(7). https://doi.org/10.3390/su15075849

Edward Freeman, R., & Phillips, R. A. (2002). Stakeholder Theory: A Libertarian Defense. Business Ethics Quarterly, 12(3), 331–349. https://doi.org/10.2307/3858020

Engidaw, A. E. (2021). The effect of external factors on industry performance: the case of Lalibela City micro and small enterprises, Ethiopia. Journal of Innovation and Entrepreneurship, 10(1). https://doi.org/10.1186/s13731-021-00147-7

Farooque, O. Al, Sun, L., & Writthym Buachoom, W. (2019). Board , audit committee , ownership and fi nancial performance – emerging trends from Thailand. November. https://doi.org/10.1108/PAR-10-2018-0079

García-Sánchez, I. M., Aibar-Guzmán, B., Aibar-Guzmán, C., & Azevedo, T. C. (2020). CEO ability and sustainability disclosures: The mediating effect of corporate social responsibility performance. Corporate Social Responsibility and Environmental Management, 27(4), 1565–1577. https://doi.org/10.1002/csr.1905

García Martín, C. J., & Herrero, B. (2018). Boards of directors: composition and effects on the performance of the firm. Economic Research-Ekonomska Istrazivanja , 31(1), 1015–1041. https://doi.org/10.1080/1331677X.2018.1436454

Gómez, J. I. M., Cortés, D. L., & Betancourt, G. G. (2017). Effect of the Board of Directors on firm performance. International Journal of Economic Research, 14(6), 349–361.

Guluma, T. F. (2021). The impact of corporate governance measures on firm performance: the influences of managerial overconfidence. Future Business Journal, 7(1), 1–18. https://doi.org/10.1186/s43093-021-00093-6

Hussain, N., Rigoni, U., & Cavezzali, E. (2018). Does it pay to be sustainable ? Looking inside the black box of the relationship between sustainability performance and financial performance. April, 1198–1211. https://doi.org/10.1002/csr.1631

IDXChannel. (2021). Rombak Susunan Pengurus, Erick Pastikan Transformasi Garuda (GIAA) Dilakukan dengan Tepat. https://www.idxchannel.com/economics/rombak-susunan-pengurus-erick-pastikan-transformasi-garuda-giaa-dilakukan-dengan-tepat

Jyoti, G., & Khanna, A. (2021). Does sustainability performance impact financial performance? Evidence from Indian service sector firms. Sustainable Development, 29(6), 1086–1095. https://doi.org/10.1002/sd.2204

Kim, N. L. T., Duvernay, D., & Le Thanh, H. (2021). Determinants of financial performance of listed firms manufacturing food products in Vietnam: regression analysis and Blinder–Oaxaca decomposition analysis. Journal of Economics and Development, 23(3), 267–283. https://doi.org/10.1108/jed-09-2020-0130

Kılıç, M., Gurler, H. E., & Kaya, A. (2022). The Impact of Sustainability Performance on Financial Performance : Does Firm Size Matter ? Evidence from Turkey and South Korea.

Knobe, J. (2003). Intentional action and side effects in ordinary language. Analysis, 63(279), 190–194. https://doi.org/10.1111/1467-8284.00419

Kyere, M. (2021). Corporate governance and firms financial performance in the United Kingdom. October 2019, 1871–1885. https://doi.org/10.1002/ijfe.1883

Lee, M. T., & Raschke, R. L. (2023). Stakeholder legitimacy in firm greening and financial performance: What about greenwashing temptations? Journal of Business Research, 155. https://doi.org/https://doi.org/10.1016/j.jbusres.2022.113393.

Martinez, P. M. C., & Isabel, G. A. (2019). An international approach of the relationship between board attributes and the disclosure of corporate social responsibility issues. Corporate Social Responsibility and Environmental Management, 26(3), 612–627.

Merendino, A., & Melville, R. (2019). The board of directors and firm performance: empirical evidence from listed companies. Corporate Governance (Bingley), 19(3), 508–551. https://doi.org/10.1108/CG-06-2018-0211

Michael, J. A., & Szigeti, A. (2019). “The Group Knobe Effect”: evidence that people intuitively attribute agency and responsibility to groups. Philosophical Explorations, 22(1), 44–61. https://doi.org/10.1080/13869795.2018.1492007

Misiuda, M., & Lachmann, M. (2022). Investors’ Perceptions of Sustainability Reporting—A Review of the Experimental Literature. Sustainability (Switzerland), 14(24). https://doi.org/10.3390/su142416746

Mita, A. F., Silalahi, H. F., & Halimastussadiah, A. (2018). Corporate social responsibility (CSR) disclosure and banks’ fi-nancial performance in Five ASEAN countries. Journal of Economics, Business & Accountancy Ventura, 21(2), 159–167. https://doi.org/10.14414/jebav.v21i2.1437

Muchemwa, M. R., Padia, N., & Callaghan, C. W. (2016). Board composition, board size and financial performance of Johannesburg stock exchange companies. South African Journal of Economic and Management Sciences, 19(4), 497–513. https://doi.org/10.4102/sajems.v19i4.1342

Nguyen, T. T. C., Le, A. T. H., & Nguyen, C. Van. (2023). Internal Factors Affecting The Financial Performance of An Organisation’s Business Processes. Business Process Management Journal, 29(5), 1408–1435. https://doi.org/https://doi.org/10.1108/BPMJ-10-2022-0486

Nguyen, V. C., & Huynh, T. N. T. (2023). Characteristics of the Board of Directors and Corporate Financial Performance—Empirical Evidence. Economies, 11(2). https://doi.org/10.3390/economies11020053

Nobanee, H., & Ellili, N. (2016). Corporate sustainability disclosure in annual reports: Evidence from UAE banks: Islamic versus conventional. Renewable and Sustainable Energy Reviews, 55, 1336–1341. https://doi.org/10.1016/j.rser.2015.07.084

Purbawangsa, I. B. A., Solimun, S., Fernandes, A. A. R., & Mangesti Rahayu, S. (2020). Corporate governance, corporate profitability toward corporate social responsibility disclosure and corporate value (comparative study in Indonesia, China and India stock exchange in 2013-2016). Social Responsibility Journal, 16(7), 983–999. https://doi.org/10.1108/SRJ-08-2017-0160

Ross, A. S., Westerfield, R. A., & Jaffe, J. (2013). Corporate Finance (tenth). McGraw-Hill. https://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=6030061&site=bsi-live

Sekaran, U., & Bougie, R. (2016). Research Methods for Business: A Skill-Building Approach. In Leadership & Organization Development Journal (Vol. 34, Issue 7). https://doi.org/10.1108/lodj-06-2013-0079

Septiana, W. R., & Puspawati, D. (2022). Analisis good corporate governance terhadap pengungkapan ESG di Indonesia tahun 2016-2020. Fair Value: Jurnal Ilmiah Akuntansi Dan Keuangan, 4(10), 4274–4283. https://doi.org/10.32670/fairvalue.v4i10.1642

Shukla, A., Narayanasamy, S., & Krishnakumar, R. (2020). Impact of board size on the accounting returns and the asset quality of Indian banks. International Journal of Law and Management, 62(4), 297–313. https://doi.org/10.1108/IJLMA-12-2018-0271

Tabash, M. I. (2019). An empirical investigation on the relation between disclosure and financial performance of islamic banks in the United Arab Emirates. Journal of Asian Finance, Economics and Business, 6(4), 27–35. https://doi.org/10.13106/jafeb.2019.vol6.no4.27

Uyar, A., Kilic, M., & Karaman, A. S. (2021). Board structure , financial performance , corporate social responsibility performance , CSR committee , and CEO duality : Disentangling the connection in healthcare. February, 1–19. https://doi.org/10.1002/csr.2141

Vaidya, P. N. (2019). Board Size and Firm Performance: a Study on Bse 100 Companies. Journal of Management, 10(3), 117–123. https://doi.org/10.34218/jom.6.3.2019.013

Wahana Lingkungan Indonesia. (2022). Membangkang Konstitusi, Mewariskan Krisis Antar Generasi.

Wasara, T. M., & Ganda, F. (2019). The relationship between corporate sustainability disclosure and firm financial performance in Johannesburg Stock Exchange (JSE) listed mining companies. Sustainability (Switzerland), 11(16). https://doi.org/10.3390/su11164496

Weerink, R. (2019). The Effect of Board Size on Firm Performance and How this Relationship is Influenced by Uncertainty Avoidance. January.

Whetman, L. L. (2017). the Impact of Sustainability Reporting. Journal of Economics, Business, and Accountancy Ventura, 14(1), 1–19.

Xie, J., Nozawa, W., Yagi, M., & Fujii, H. (2019). Do environmental , social , and governance activities improve corporate financial performance ? Business Strategy and the Environment, 28(2), 286–300.


Refbacks

  • There are currently no refbacks.