The Effect of Internal Corporate Governance Mechanisms Toward Corporate Social Responsibility Disclosures: Evidence Found in Indonesia Listed Mining Industry

Tarigan, Josua and ANTONIUS, JACKY (2023) The Effect of Internal Corporate Governance Mechanisms Toward Corporate Social Responsibility Disclosures: Evidence Found in Indonesia Listed Mining Industry. [UNSPECIFIED]

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Abstract

This research attempts to scrutinize the impact of managerial ownership, board independence, and female directors on board toward the Corporate Social Disclosure Index to observe how a companys internal corporate governance mechanism affects the intensity of CSR disclosure. CSR Disclosure is measured by a standardized approach of GRI G4 Framework as the reporting standard; on the other side, managerial ownership is used as a measurement of shares held by the members of the board, Independent Members on Board is to measure independence level of the board, and female board members for board diversity measurement. CSR Disclosure analysis was undergone on 34 listed mining companies in Indonesia during the observation years of 2016 to 2020. It is found that Managerial Ownership has a significant negative impact on a firm�s sustainability disclosure. In contrast, the remaining variables consisting of Board Independence and Female Directors on Board have an insignificant effect on a firm�s sustainability disclosure, with firm size, firm leverage, and firm profitability acting as the control variables. This study expands previous literature on the CSR disclosure level with only the sole impact of board characteristics, by adding another variable of managerial ownership besides independent board members and female board members. Furthermore, the observation period has also extended from 2016 to 2020 to accommodate the changing of the board members. This is unarguably important to assess each independent variables impact on the companys overall sustainability level

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