Board Diversity and Environmental Disclosures: A Study of Indonesian Listed Companies
Abstract
This research examines whether the diversity of boards of commissioners and boards of directors affects environmental disclosures. We include all non-financial firms listed on the Indonesian Stock Exchange during 2018-2020 and use the generalized least square (GLS) model. Our findings show that the diversity of age and ethnicity of both the board of commissioners and the board of directors positively influences environmental disclosures. Further, while boards of directors' gender diversity positively affects environmental disclosure, there is no support for the impact of boards of commissioners on the disclosures. Lastly, there is no empirical support for the influence of directors' or commissioners' nationality on the companies' environmental disclosures. The findings highlight the importance of promoting board diversity on both boards of commissioners and directors.
Keywords
Full Text:
PDFReferences
Abdullah, M., Hamzah, N., Ali, M. H., Tseng, M. L., & Brander, M. (2020). The Southeast Asian haze: The quality of environmental disclosures and firm performance. Journal of Cleaner Production, 246. https://doi.org/10.1016/j.jclepro.2019.118958
Adeniyi, S. I., & Fadipe, A. O. (2018). Effect of Board Diversity on Sustainability Reporting in Nigeria: A Study of Beverage Manufacturing Firms. Indonesian Journal of Sustainability Accounting and Management, 1(1), 43–50. https://doi.org/10.28992/ijsam.v2i1.52
Anazonwu, H. O., Egbunike, F. C., & Gunardi, A. (2018). Corporate Board Diversity and Sustainability Reporting: A Study of Selected Listed Manufacturing Firms in Nigeria. Indonesian Journal of Sustainability Accounting and Management, 2(1), 65. https://doi.org/10.28992/ijsam.v2i1.52
Ardi, J. W., & Yulianto, A. (2020). The Effect of Profitability, Leverage, and Size on Environmental Disclosure with the Proportion of Independent Commissioners as Moderating. Accounting Analysis Journal, 9(2), 123–130. https://doi.org/10.15294/aaj.v9i2.36473
Bakar, A. B. S. A., Ghazali, N. A. B. Mohd., & Ahmad, M. B. (2019). Sustainability Reporting and Board Diversity in Malaysia. International Journal of Academic Research in Business and Social Sciences, 9(2), 91–99. https://doi.org/10.6007/ijarbss/v9-i2/5663
Baker, K. H., Nitesh, P., Satish, K., & Arunima Haldar. (2020). A bibliometric analysis of board diversity: Current status, development, and future research directions. Journal of Business Research, 108(November 2019), pp. 232–246. https://doi.org/10.1016/j.jbusres.2019.11.025
Bear, S., Rahman, N., & Post, C. (2010). Springer The Impact of Board Diversity and Gender Composition on Corporate Social Responsibility and Firm Reputation. Source: Journal of Business Ethics, 97(2), 207–221. https://doi.org/10.1007/810551-010-0505-2
Ben-Amar, W., Chang, M., & McIlkenny, P. (2017). Board Gender Diversity and Corporate Response to Sustainability Initiatives: Evidence from the Carbon Disclosure Project. Journal of Business Ethics, 142(2), 369–383. https://doi.org/10.1007/s10551-015-2759-1
Bravo, F. (2018). Does board diversity matter in the disclosure process? An analysis of the association between diversity and the disclosure of information on risks. International Journal of Disclosure and Governance, 15(2), 104–114. https://doi.org/10.1057/s41310-018-0040-4
Bravo, F., & Reguera-Alvarado, N. (2019). Sustainable development disclosure: Environmental, social, and governance reporting and gender diversity in the audit committee. Business Strategy and the Environment, 28(2), 418–429. https://doi.org/10.1002/bse.2258
Boyd, B. (1990). Corporate linkages and organizational environment: a test of the resource dependence model. In Strategic Management Journal (Vol. 11).
Chebbi, K., Aliedan, M., & Alsahlawi, A. (2020). Women on the Board and Environmental Sustainability Reporting: Evidence from France. Creativity and Innovation Management, 14(11), 231–258.
Cucari, N., Esposito De Falco, S., & Orlando, B. (2018). Diversity of Board of Directors and Environmental Social Governance: Evidence from Italian Listed Companies. Corporate Social Responsibility and Environmental Management, 25(3), 250–266. https://doi.org/10.1002/csr.1452
Darmadi, S. (2011). Board diversity and firm performance: The Indonesian Evidence. Corporate Ownership and Control, 9(1 F), pp. 524–539. https://doi.org/10.22495/cocv8i2c4p4
Deswanto, R. B., & Siregar, S. V. (2018). The Associations Between Environmental Disclosures with Financial Performance, Environmental Performance, and Firm Value. Social responsibility journal, 14(1), 180–193. https://doi.org/10.1108/SRJ-01-2017-0005
Djajadikerta, H. G., & Trireksani, T. (2012). Corporate social and environmental disclosure by Indonesian listed companies on their corporate websites. Journal of Applied Accounting Research, 13(1), 21-36.
https://doi.org/10.1108/09675421211231899
Elkington, J. (1998). Partnerships from Cannibals with Forks: Triple bottom line of 21st Century Business. Environmental Quality Management, 8(1), 37–51.
Elmagrhi, M. H., Ntim, C. G., Elamer, A. A., & Zhang, Q. (2019). A study of environmental policies and regulations, governance structures, and environmental performance: the role of female directors. Business Strategy and the Environment, 28(1), 206-220. https://doi.org/10.1002/bse.2250
Gallego-Álvarez, I., García-Sánchez, I. M., & Rodríguez-Dominguez, L. (2010). The Influence of Gender Diversity on Corporate Performance. Revista de Contabilidad-Spanish Accounting Review, 13(1), 53–88. https://doi.org/10.1016/S1138-4891(10)70012-1
Giannarakis, G., Andronikidis, A., & Sariannidis, N. (2019). Determinants of Environmental Disclosure: Investigating New and Conventional Corporate Governance Characteristics. Annals of Operations Research, 294(1–2), 87–105. https://doi.org/10.1007/s10479-019-03323-x
Hadya, R., & Susanto, R. (2018). Model Hubungan Antara Keberagaman Gender, Pendidikan dan Nationality Dewan Komisaris terhadap Pengungkapan Corporate Social Responsibility. Jurnal Benefita, 3(2), 149. https://doi.org/10.22216/jbe.v3i2.3432
Handajani, L., Subroto, B., & Saraswati, E. (2014). Does Board Diversity Matter on Corporate Social Disclosure? An Indonesian Evidence. In Journal of Economics and Sustainable Development www.iiste.org ISSN (Vol. 5, Issue 9). www.iiste.org
Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource Dependence Theory: A Review. In Journal of Management (Vol. 35, Issue 6, pp. 1404–1427). https://doi.org/10.1177/0149206309343469
Iatridis, G. E. (2013). Environmental Disclosure Quality : Evidence on Environmental Performance, Corporate Governance, and Value Relevance. Emerging Markets Review, 14, 55–75. https://doi.org/10.1016/j.ememar.2012.11.003
Indonesia.go.id. (2017, December 3). Suku Bangsa. https://indonesia.go.id/profil/suku-bangsa/kebudayaan/suku-bangsa
International Finance Corporation. (2018). The Indonesia Corporate Governance Manual (2nd Edition). https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/ifc+cg/resources/toolkits+and+manuals/indonesia+corporate+governance+manual%2C+2nd+edition
International Financial Reporting Standards. (2021, November 3). International Sustainability Standards Board. https://www.ifrs.org/groups/international-sustainability-standards-board/
Joshi, A., & Roh, H. (2009). The Role of Context in Work Team Diversity Research: A Meta-Analytic Review. Academy of Management Journal, 52(03), 599–627.
Karl, H., & Orwat, C. (1999). Environmental Labelling in Europe: European and National Tasks. European Environment, 9(5), 212–220. https://doi.org/10.1002/(SICI)1099-0976(199909/10)9:5<212::AID-EET203>3.0.CO;2-I
Katmon, N., Mohamad, Z. Z., Norwani, N. M., & Farooque, O. al. (2019). Comprehensive Board Diversity and Quality of Corporate Social Responsibility Disclosure: Evidence from an Emerging Market. Journal of Business Ethics, 157(2), 447–481. https://doi.org/10.1007/s10551-017-3672-6
Kementerian Keuangan Republik Indonesia. (2021). Ini Kontribusi Indonesia dalam Menghadapi Tantangan Perubahan Iklim. https://www.kemenkeu.go.id/publikasi/berita/ini-kontribusi-indonesia-dalam-menghadapi-tantangan-perubahan-iklim/
Khaireddine, H., Aljabr, B. S. and J., & Jarboui, A. (2020). Impact of Board Characteristics on Governance, Environmental and Ethical Disclosure. Society and Business Review, 15(3), 273–295. https://doi.org/10.1108/SBR-05-2019-0067
Khan, I., Khan, I., & Saeed, B. Bin. (2019). Does Board Diversity Affect the Quality of Corporate Social Responsibility Disclosure? Evidence From Pakistan. Corporate Social Responsibility and Environmental Management, 26(6), 1371–1381. https://doi.org/10.1002/csr.1753
Kılıç, M., & Kuzey, C. (2017). The Effect of Corporate Governance on Carbon Emission Disclosures: Evidence From Turkey. International Journal of Climate Change Strategies and Management, 11(1), 35–53. https://doi.org/10.1108/IJCCSM-07-2017-0144
Kusumastuti, S., & Sastra, P. (2007). Pengaruh Board Diversity Terhadap Nilai Perusahaan Dalam Perspektif Corporate Governance. Jurnal Akuntansi Dan Keuangan, 9(2), 88–98. https://doi.org/10.9744/jak.9.2.pp.88-98
Lestari, T., & Mutmainah, K. (2020). Pengaruh Karakteristik Dewan Komisaris Dan Dewan Direksi terhadap Kinerja Keuangan (Studi Empiris pada Perusahaan Manufaktur Industri Barang Konsumsi yang terdaftar di BEI Periode 2015 sampai 2018). Journal of Economics, Business, and Engineering (JEBE), 2(1), 34–41.
Li, J., Chu, C. W. L., Lam, K. C. K., & Liao, S. (2011). Age Diversity and Firm Performance in An Emerging Economy: Implications for Cross-Cultural Human Resource Management. Human Resource Management, 50(2), 247–270. https://doi.org/10.1002/hrm.20416
Liao, L., Luo, L., & Tang, Q. (2015). Gender Diversity, Board Independence, Environmental Committee, and Greenhouse Gas Disclosure. British Accounting Review, 47(4), 409–424. https://doi.org/10.1016/j.bar.2014.01.002
Lucia, L., & Panggabean, R. R. (2018). The Effect of Firm’s Characteristic and Corporate Governance to Sustainability Report Disclosure. Social Economics and Ecology International Journal (SEEIJ), 2(1), 18–28. https://doi.org/10.31397/seeij.v2i1.15
Manita, R., Bruna, M. G., Dang, R., & Houanti, L. (2018). Board Gender Diversity and ESG Disclosure: Evidence from The USA. Journal of Applied Accounting Research, 19(2), 206–224. https://doi.org/10.1108/JAAR-01-2017-0024
Maula, K. A., & Rakhman, A. (2018). Pengaruh Board Diversity (Ceo Wanita, Cfo Wanita, Proporsi Dewan Komisaris Wanita, Proporsi Komite Audit Wanita) terhadap Pelanggaran Aturan Laporan Keuangan. Accounting : Journal of Accounting and Finance, 3(01), 431–445.
Morita, K., Okitasari, M., & Masuda, H. (2020). Analysis of National and Local Governance Systems to Achieve The Sustainable Development Goals : Case Studies of Japan and Indonesia. Sustainability Science, 15(1), 179–202. https://doi.org/10.1007/s11625-019-00739-z
Nielsen, W., Alegria, S., Börjeson, L., Falk-krzesinski, H. J., Joshi, A., Leahey, E., Smith-doerr, L., & Woolley, A. W. (2017). Correction: Gender diversity leads to better science. Proceedings of the National Academy of Sciences of the United States of America, 114(13), E2796. https://doi.org/10.1073/pnas.1703146114
Ningtiyas, R., & Riharjo, I. B. (2018). Pengaruh Ukuran Perusahaan dan Kinerja Keuangan Terhadap Environmental Disclosure Pada Perusahaan Manufaktur Yang Terdaftar di BEI. Jurnal Ilmu Dan Riset Akuntansi, 7(6), 1–21.
Pichler, S., Livingston, B., Yu, A., Varma, A., Budhwar, P., & Shukla, A. (2019). Nationality diversity and leader–Member exchange at multiple levels of analysis: Test of a cross-level model. Equality, Diversity and Inclusion, 38(1), 20–39. https://doi.org/10.1108/EDI-03-2018-0054
Post, C., Rahman, N., & Rubow, E. (2011a). Green governance: Boards of Directors Composition and Environmental Corporate Social Responsibility. Business and Society, 50(1), 189–223. https://doi.org/10.1177/0007650310394642
Purnomo, D. W., & Rizki, A. (2020). Board Diversity and Corporate Social Responsibility Disclosure in The Property, Real Estate and Construction Sectors. International Journal of Innovation, Creativity, and Change, 13(4), 727–744.
Rabi, A. M. (2019). Board Characteristics and Environmental Disclosure: Evidence from Jordan. International Journal of Business and Management, 14(2), 57. https://doi.org/10.5539/ijbm.v14n2p57
Rahindayati, N. M., Ramantha, I. W., & Rasmini, N. K. (2015). Pengaruh Diversitas Pengurus Pada Luas Pengungkapan Corporate Social Responsibility Perusahaan Sektor Keuangan. E-Jurnal Ekonomi Dan Bisnis Universitas Udayana, ISSN : 2337-3067, 312–330.
Rahma, A. A., & Aldi, F. (2020). The Importance of Commissioners Board Diversity in CSR Disclosures. International Journal of Economics Development Research (IJEDR), 1(2), 136–149.
Rahmawati, S., & Budiwati, C. (2018). Karakteristik Perusahaan, ISO 14001, dan Pengungkapan Lingkungan: Studi Komparatif di Indonesia dan Thailand. Jurnal Akuntansi Dan Bisnis, 18(1), 74. https://doi.org/10.20961/jab.v18i1.268
Richard, O. C. (2000). Racial Diversity, Business Strategy, and Firm Performance: A Resource-Based View. In * Academy of Management Journal (Vol. 43, Issue 2).
Rosati, F., & Faria, L. G. D. (2019). Addressing The SDGs in Sustainability Reports : The Relationship with Institutional Factors. Journal of Cleaner Production, 215, 1312–1326. https://doi.org/10.1016/j.jclepro.2018.12.107
Rosenauer, D., Homan, A. C., Horstmeier, C. A. L., & Voelpel, S. C. (2016). Managing Nationality Diversity: The Interactive Effect of Leaders’ Cultural Intelligence and Task Interdependence. British Journal of Management, 27(3), 628–645. https://doi.org/10.1111/1467-8551.12131
Rupley, K. H., Brown, D., & Marshall, R. S. (2012). Governance, media and the quality of environmental disclosure. Journal of Accounting and Public Policy, 31(6), 610–640. https://doi.org/10.1016/j.jaccpubpol.2012.09.002
Setyawan, S. (2005). Konteks Budaya Etnis Tionghoa dalam Manajemen Sumber Daya Manusia. BENEFIT, 9(2).
Sholihah, A. R., & Suryaningrum, D. H. (2021). Faktor-Faktor yang Mempengaruhi Pengungkapan Lingkungan dengan Komite Audit sebagai Variabel Moderasi. Fokus Bisnis: Media Pengkajian Manajemen Dan Akuntansi, 20(1), 42–57. https://doi.org/10.32639/fokusbisnis.v19i2.805
Suprapti, E., Fajari, F. A., Syaiful, A., & Anwar, H. (2019). Pengaruh Good Corporate Governance Terhadap Environmental Disclosure. Akuntabilitas: Jurnal Ilmu Akuntansi, 12 (2)(September), 215 – 226. https://doi.org/10.15408/akt.v12i2.13225
Swain, R. B., & Yang-Wallentin, F. (2019). Achieving Sustainable Development Goals : Predicaments and Strategies. International Journal of Sustainable Development & World Ecology, 00(00), 1–11. https://doi.org/10.1080/13504509.2019.1692316
Tjahjadi, B., Soewarno, N., & Mustikaningtiyas, F. (2021). Good Corporate Governance and Corporate Sustainability Performance in Indonesia: A Triple Bottom Line Approach. Heliyon, 7(3), e06453. https://doi.org/10.1016/j.heliyon.2021.e06453
Trireksani, T., & Djajadikerta, H. G. (2016). Corporate Governance and Environmental Disclosure in The Indonesian Mining Industry. Australasian Accounting, Business and Finance Journal, 10(1). https://doi.org/10.14453/aabfj.v10i1.3
Wulansari, D., & Sholihin, M. (2017). Examining the Effect of Stakeholder Expectations and Environmental Performance on Environmental Disclosure. The Indonesian Journal of Accounting Research. 20(3).
https://doi.org/10.33312/ijar.383
Zaid, M. A. A., Wang, M., Adib, M., Sahyouni, A., & T. F. Abuhijleh, S. (2020). Boardroom Nationality and Gender Diversity: Implications for Corporate Sustainability Performance. Journal of Cleaner Production, 251. https://doi.org/10.1016/j.jclepro.2019.119652
Zhang, L. (2012). Board demographic diversity, independence, and corporate social performance. Corporate Governance (Bingley), 12(5), 686–700. https://doi.org/10.1108/14720701211275604
DOI: http://doi.org/10.33312/ijar.719
Refbacks
- There are currently no refbacks.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The Indonesian Journal of Accounting Research (IJAR)
Ikatan Akuntan Indonesia
Graha Akuntan, Jl. Sindanglaya No.1 Menteng, Jakarta Pusat 10310
Editorial Secretariat
CP : Farinza
Phone : +62 812-2848-2829
Fax : +62 274 524606
Website: http://ijar-iaikapd.or.id/
Email : sekretariat@ijar-iaikapd.or.id
Marketing and Sales Office
CP : Reza Fauzi
Divisi Pelayanan, Keanggotaan dan Mitra IAI.
Grha Akuntan, Jl. Sindanglaya No.1, Menteng.
Telp.021-31904232 Ext.324/321
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ISSN 2086-6887 (Print)ISSN 2655 - 1748 (online)
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------