Disclosure on Sustainability Reports, Foreign Board, Foreign Ownership, Indonesia Sustainability Reporting Awards and Firm Value
This study aims to investigate how disclosure on sustainability reports, foreign on boards, and foreign ownership affect firm value. Indonesia Sustainability Reporting Award (ISRA) is used to moderate the impact of the disclosure on the sustainability report on the firm value from 2013 to 2017. This study uses 37 firms as a sample with 159 observations and using panel data analysis. Subgroup analysis is used to test the existence or absence of homologizer moderation. The result showed that only the disclosure of sustainability has a positive impact on firm value. Foreign board and foreign ownership have been shown to not affect firm value. Additional testing is performed by splitting types of companies that have become state-owned enterprises (SOEs) and non-SOE, as well as kinds of services & finance and Manufacturing & others. We found that foreign commissioners in the service and finance sectors category have a positive effect on firm value, and foreign ownership in State-Owned Enterprises (SOEs) has a positive influence on firm value. Therefore, it is suggested that the organization of ISRA should disclose their winning criteria since it can be used as information in decision-making
Bloomberg. (2018). Freeport Plunges After Indonesia Toughens Environmental Rules - Bloomberg. Retrieved January 25, 2019, from https://www.bloomberg.com/news/articles/2018-04-24/freeport-trims-copper-call-as-grasberg-weighs-on-first-quarter.
Brammer, S., & Pavelin, S. (2008). Factors influencing the quality of corporate environmental disclosure. Business Strategy and the Environment. https://doi.org/10.1002/bse.506
Bremholm, A., & Svensson, C. (2015). Foreign Ownership and Foreign Directors – The Effects on Firm Performance in Japan. Master thesis in business administration. Lund University.
Brigham, E. F., & Houston, J. F. (2007). Fundamentals of financial management (Dasar-dasar Manajemen Keuangan). In Engineering and Process Economics. https://doi.org/10.1038/sj.ejhg.5200824
Budiman, F., & Supatmi. (2009). Pengaruh Pengumuman Indonesia Sustainability Reporting Awards (ISRA) terhadap Abnormal Return dan Volume Perdagangan Saham (Studi Kasus pada Perusahaan Pemenang ISRA Periode 2005-2008). Simposium Nasional Akuntansi XII Palembang, 4-6 November 2009, 1–19.
Chhibber, P. K., & Majumdar, S. K. (1999). Foreign ownership and profitability: Property rights, control, and the performance of firms in the Indian industry. Journal of Law and Economics. https://doi.org/10.1086/467423
Choi, H. M., Sul, W., & Min, S. K. (2012). Foreign board membership and firm value in Korea. Management Decision. https://doi.org/10.1108/00251741211203533
Choi, J. J., Park, S. W. & Yoo, S. S. (2007). The Value of Outside Directors: Evidence from Corporate Governance Reform in Korea. Journal of Financial and Quantitative Analysis. https://doi.org/10.1017/s0022109000003458
Chung, K. H., & Pruitt, S. W. (2012). Simple Approximation of Tobin's q. Venture Capital.
Claessens, S., Djankov, S., & Lang, L. H. P. (2000). The separation of ownership and control in East Asian Corporations. Journal of Financial Economics. https://doi.org/10.1016/s0304-405x(00)00067-2
Clarkson, M. E. (1995). a Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance. Academy of Management Review, 20(1), 92–117. https://doi.org/10.5465/amr.1995.9503271994
Cormier, D., Magnan, M., & Van Velthoven, B. (2005). Environmental disclosure quality in large German companies:
Economic incentives, public pressures, or institutional conditions? European Accounting Review. https://doi.org/10.1080/0963818042000339617
Darmadi, S. (2011). Board diversity and firm performance: The Indonesian evidence. Corporate Ownership and Control. https://doi.org/10.22495/cocv8i2c4p4
Detiknews. (2016). Lumpur Lapindo Mengalir Sampai ke Koran. Retrieved from https://news.detik.com/berita/d-652930/lumpur-lapindo-mengalir-sampai-ke-koran
Djoko, Suhardjanto & Nugraheni, S. (2012). Pengaruh Corporate Social Responsibility (CSR) Disclosure Terhadap Nilai Perusahaan. Jurnal Akuntansi, 16(2), 162–175. https://doi.org/10.30596/intiqad.v9i2.1385
Drobetz, W., Schillhofer, A., & Zimmermann, H. (2003). Corporate Governance and Expected Stock Returns: Evidence from Germany. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.369100
Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The Impact of Corporate Sustainability on Organizational Processes and Performance. Management Science, 60(11), 2835–2857. https://doi.org/10.2139/ssrn.1964011
Eesley, C., & Lenox, M. J. (2006). Firm responses to secondary stakeholder action. Strategic Management Journal, 27(8), 765–781. https://doi.org/10.1002/smj.536
Elkington, J. (1997). Cannibals with forks - The triple bottom line of 21st-century business. In Capstone Publishing Ltd, Oxford. https://doi.org/http://doi.wiley.com/10.1002/tqem.3310080106
Fama, E. F. (1978). The effects of a firm's investment and financing decisions on the welfare of its security holders. American Economic Review. https://doi.org/10.2307/1805260
Fatchan, I. N., & Trisnawati, R. (2016). Pengaruh Good Corporate Governance pada Hubungan antara Sustainability Report dan Nilai Perusahaan (Studi Empiris Perusahaan Go Public di Indonesia Periode 2014-2015). Riset Akuntansi Dan Keuangan Indonesia, 1(1), 25. https://doi.org/10.23917/reaksi.v1i1.1954
Fischer, E., & Reuber, R. (2007). The Good, the Bad, and the Unfamiliar: The Challenges of Reputation Formation Facing New Firms. In Entrepreneurship Theory and Practice (Vol. 31). https://doi.org/10.1111/j.1540-6520.2007.00163.x
Ghozali, I. (2018). Aplikasi Analisis Multivariate dengan Program SPSS 25 edisi 9. Semarang: Badan Penerbit Universitas Diponegoro.
Global Reporting Initiative. (2013). G4 Sustainability Reporting Guidelines - Reporting Principles and Standard Disclosures. Global Reporting Initiative. https://doi.org/10.1590/S0101-60832006000700003
Hackston, D., & Milne, M. J. (1996). Some Determinants of Social and Environmental Disclosures in New Zealand companies. Accounting, Auditing & Accountability Journal, 9(1), 77–108.
Hill, C. W. L., & Jones, T. M. (1992). Stakeholder-Agency Theory. Journal of Management Studies, 29(2), 131–154. https://doi.org/10.1111/j.1467-6486.1992.tb00657.x
Jeffrey S, Harrison, Douglas A, Bosse & Robert A, P. (2010). Managing for Stakeholders, Stakeholder Utility Functions, and Competitive Advantage. Strategic Management Journal, 9(1), 77–108. https://doi.org/10.1002/smj
Jo, H., & Harjoto, M. A. (2011). Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility. Journal of Business Ethics. https://doi.org/10.1007/s10551-011-0869-y
Komite Nasional Kebijakan Governance. (2006). Pedoman Umum Good Corporate Governance Indonesia. Pedoman Umum Good Corporate Governance Indonesia.
Kuzey, C., & Uyar, A. (2016). Determinants of sustainability reporting and its impact on firm value: Evidence from the emerging market of Turkey. Journal of Cleaner Production, 143, 27–39. https://doi.org/10.1016/j.jclepro.2016.12.153
Li, Y., Gong, M., Zhang, X. Y., & Koh, L. (2018). The impact of environmental, social, and governance disclosure on firm value: The role of CEO power. British Accounting Review, 50(1), 60–75. https://doi.org/10.1016/j.bar.2017.09.007
Liu, X., & Anbumozhi, V. (2009). Determinant factors of corporate environmental information disclosure: an empirical study of Chinese listed companies. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2008.10.001
Loh, L., Thomas, T., & Wang, Y. (2017). Sustainability reporting and firm value: Evidence from Singapore-listed companies. Sustainability (Switzerland). https://doi.org/10.3390/su9112112
Lu, Y., & Abeysekera, I. (2014). Stakeholders' power, corporate characteristics, and social and environmental disclosure: Evidence from China. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2013.10.005
Makhdalena, M. (2017). Pengaruh Ownership Structure dan Corporate Performance terhadap Firm Value. EKUITAS (Jurnal Ekonomi Dan Keuangan). https://doi.org/10.24034/j25485024.y2016.v20.i3.2075
Mishra, A. V. (2014). Foreign Ownership and Firm Value: Evidence from Australian Firms. Asia-Pacific Financial Markets. https://doi.org/10.1007/s10690-013-9177-0
Nobanee, H., & Ellili, N. (2016). Corporate sustainability disclosure in annual reports: Evidence from UAE banks: Islamic versus conventional. Renewable and Sustainable Energy Reviews. https://doi.org/10.1016/j.rser.2015.07.084
Novita, M., & Djakman, C. D. (2008). Pengaruh Struktur Kepemilikan terhadap Luas Pengungkapan Tanggung Jawab Sosial (CSR Disclosure) pada Laporan Tahunan Perusahaan: Studi Empiris pada Perusahaan Go Public yang Tercatat di Bursa Efek Indonesia. Simposium Nasional Akuntansi XI Pontianak.
Okezone. (2012). Pemerintah Didesak Cabut Izin PT Toba Pulp Lestari: Okezone Economy. Retrieved November 19, 2019, from https://economy.okezone.com/read/2012/11/15/320/718695/pemerintah-didesak-cabut-izin-pt-toba-pulp-lestari
Oktarina D. (2018, November 30). The Effect of Disclosure of Sustainability Report on Financial Distress with Company Performance as Intervening Variables. Journal of Accounting and Strategic Finance, 1 (2), 109-121. https://doi.org/https://doi.org/10.33005/jasf.v1i02.29
Oxelheim, L., & Randøy, T. (2003). The impact of foreign board membership on firm value. Journal of Banking and Finance. https://doi.org/10.1016/S0378-4266(02)00395-3
Post, J. E., Preston, L. E., & Sachs, S. (2012). Managing the Extended Enterprise: The New Stakeholder View.
California Management Review, 45(1), 6–28. https://doi.org/10.2307/41166151
Randøy, T., Thomsen, S., & Oxelheim, L. (2006). A Nordic perspective on corporate board diversity. Age.
Peraturan OJK Nomor 51/POJK.03/2017 Tentang Penerapan Keuangan Berkelanjutan Bagi Lembaga JasaKeuangan,Emiten, dan Perusahaan Publik. https://www.ojk.go.id.
Reese, W. A., & Weisbach, M. S. (2002). Protection of minority shareholder interests, cross-listings in the United States, and subsequent equity offerings. Journal of Financial Economics. https://doi.org/10.1016/S0304-405X(02)00151-4
Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms. Journal of Business Ethics. https://doi.org/10.1007/s10551-008-9968-9
Richardson, A. J., & Welker, M. (2001). Social disclosure, financial disclosure, and the cost of equity capital. Accounting, Organizations and Society, 26 (7–8), 597–616. https://doi.org/10.1016/S0361-3682(01)00025-3
Roberts, R. W. (1992). Determinants of corporate social responsibility disclosure: An application of stakeholder theory. Accounting, Organizations, and Society. https://doi.org/10.1016/0361-3682(92)90015-K
Salvator. (2005). Ekonomi Manajerial dalam Perekonomian Global. In Penerbit Salemba Empat.
Schadewitz, H., & Niskala, M. (2010). Communication via responsibility reporting and its effect on firm value in Finland. Corporate Social Responsibility and Environmental Management, 17(2), 96–106. https://doi.org/10.1002/csr.234
Setiadi, I. (2016). Stakeholders, Pengungkapan lingkungan dan Nilai Perusahaan. Universitas Sebelas Maret.
Sindonews.com. (n.d.). Menteri Rini: BUMN Butuh Direksi Asing jika Ingin Mendunia. Retrieved November 19, 2019, from https://ekbis.sindonews.com/read/1174173/34/menteri-rini-bumn-butuh-direksi-asing-jika-ingin-mendunia-1485345840
Suhardjanto, D., Alwiyah, Utami, M. E., & Syafruddin, M. (2017). Board of Commissioners Diversity and Financial Performance: A Comparative Study of Listed Mining Industry in Indonesia and Pakistan. Review of Integrative Business & Economics.
Surabaya.tribunnews. (2013). Tjiwi Kimia Dilaporkan ke BLH Terkait Dugaan Pembuangan Limbah - Surya. Retrieved
November 19, 2019, from https://surabaya.tribunnews.com/2014/05/07/tjiwi-kimia-dilaporkan-ke-blh-terkait-dugaan-pembuangan-limbah
Tarigan, J., Hervindra, C., & Hatane, S. E. (2018). Does Board Diversity Influence Financial Performance? International Research Journal of Business Studies. https://doi.org/10.21632/irjbs.11.3.195-215
Tjia, O., & Setiawati, L. (2012). Effect of CSR Disclosure to Value of the Firm : Study for Banking Industry in Indonesia. World Journal of Social Science, 2(6), 169–178.
Wardhani, P. P. C., & Hamidah. (2019). The signaling of the Sustainability reporting award in Indonesia and its effects on financial performance and firm value. International Journal of Innovation, Creativity, and Change.
Wibowo, I., & Faradiza, A. S. (2014). Dampak Pengungkapan Sustainability Report Terhadap Kinerja Keuangan dan Kinerja Pasar. Simposium Nasional Akuntansi XVII Mataram, Lombok, (24-27 September 2014).
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.