Governance Components and Sustainability from the Perspective of Voluntary and Mandatory Disclosure
Abstract
Purpose: This study aims to reveal the relationship between board size, cross directorships (director), cross directors (commissioner), and government ownership as governance components in enhancing the implementation of sustainability in companies with mandatory and voluntary disclosure. Beside that, it also examines the role of the SRI Kehati rating in moderating the relationship between governance components and the implementation of sustainability in companies with mandatory and voluntary disclosure.
Method: This research is a multiple regression analysis with panel data and moderation testing through the Fixed Effect Model. The data was taken from the annual reports of companies listed on the IDX (Indonesia Stock Exchange), with a final sample of 62 firm years.
Finding: Governance components with the proxy of the number of directorship positions have been proven to drive improvements in sustainability disclosure. Therefore, directors should have more experience in many companies to provide insights and recommendations for improving corporate sustainability disclosure. The test results also show that better sustainability disclosure occurs in companies with voluntary disclosure. Hence, even though it is voluntary, companies are aware of disclosing sustainability as corporate accountability and responding to global demands. Unfortunately, there is no evidence of the role of the SRI Kehati rating in moderating the relationship between governance components and sustainability disclosure.
Novelty: This research examines the relationship between governance components and sustainability disclosure for two categories of companies simultaneously, namely mandatory and voluntary disclosure, and includes the role of the SRI Kehati rating in the relationship between governance components and sustainability disclosure.
Keywords: cross directorships, sustainability disclosure, SRI Kehati, governance.
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Law and Regulation:
Law Number 21 of 2001 on Oil and Gas (Undang-undang No. 21 Tahun 2001 Tentang Minyak dan Gas Bumi).
Law Number 40 of 2007 on Limited Liability Company (Undang-undang No. 40 Tahun 2007 Tentang Perseroan Terbatas).
Law Number 25 of 2007 on Investment (Undang-undang No. 25 Tahun 2007 tentang Penanaman Modal)
Law Number 32 of 2009 on Environmental Protection and Management (Undang-undang No. 32 Tahun 2009 Tentang Perlindungan dan Pengelolaan Lingkungan Hidup)
Minister of State-Owned Enterprises Regulation No. PER-05/MBU/2007 on the Partnership Program of SOEs with Small Enterprises and the Community Development Program (last amended by Minister of SOEs Regulation Number PER-08/MBU/2013) (Peraturan Menteri Negara BUMN No. PER-05/MBU/2007 Tahun 2007 tentang Program Kemitraan BUMN dengan Usaha Kecil dan Program Bina Lingkungan (terakhir diubah menjadi Peraturan Menteri BUMN No. PER-08/MBU/2013 Tahun 2013 Tentang Program Kemitraan BUMN dengan Usaha Kecil dan Program Bina Lingkungan).
Government Regulation (Peraturan Pemerintah/PP) No. 47 of 2012 on Social and Environmental Responsibility of Limited Liability Company (PP No. 47 Tahun 2012 Tentang Tanggung Jawab Sosial dan Lingkungan Perseroan Terbatas).
Financial Services Authority Regulation Number 33/POJK.04/2014 concerning Directors and Commissioners of Issuers or Public Companies (Peraturan Otoritas Jasa Keuangan Nomor 33/POJK.04/2014 Tentang Direksi dan Komisaris Emiten atau Perusahaan Publik).
Website:
hukumonline.com
lindungihutan.com
kbr.id edisi Rabu, 21 September 2022.
