TY - JOUR
T1 - The role of foreign board and ownership on the quality of sustainability disclosure
T2 - the moderating effect of social reputation
AU - Zarefar, Arumega
AU - Agustia, Dian
AU - Soewarno, Noorlailie
N1 - Publisher Copyright:
© 2023, Emerald Publishing Limited.
PY - 2024/4/30
Y1 - 2024/4/30
N2 - Purpose: This study aims to examine the effect of social reputation on the relationship between boards and foreign ownership on the quality of sustainability disclosure. Design/methodology/approach: The sample of this study consists of publicly-traded primary and secondary sector companies in Indonesia for 12 years, from 2009 to 2020. This study uses panel model regression to generate its results. The disclosure data are hand-collected data sourced from annual financial and company sustainability reports. Findings: Higher foreign board component companies report lower quality of sustainability disclosure, whereas companies that possess foreign ownership components report a higher quality of sustainability disclosure. This result is strengthened by obtaining consistent results tested with economic, social and environmental disclosure components. In addition, if the company has a good social reputation, it will strengthen the relationship of foreign ownership to the quality of sustainability disclosure. Practical implications: These findings are relevant for policymakers, professional organizations and practitioners in Indonesia and other developing countries. Originality/value: The moderating effect of social reputation on the relation of the foreign board and foreign ownership-quality of sustainability disclosure as this study does remain rare in developing countries. This study complements various research conducted in developing countries, such as Indonesia, by offering a new dimension. The results indicate that social reputation has a moderating role in determining the impact of foreign ownership on the quality of sustainability disclosure.
AB - Purpose: This study aims to examine the effect of social reputation on the relationship between boards and foreign ownership on the quality of sustainability disclosure. Design/methodology/approach: The sample of this study consists of publicly-traded primary and secondary sector companies in Indonesia for 12 years, from 2009 to 2020. This study uses panel model regression to generate its results. The disclosure data are hand-collected data sourced from annual financial and company sustainability reports. Findings: Higher foreign board component companies report lower quality of sustainability disclosure, whereas companies that possess foreign ownership components report a higher quality of sustainability disclosure. This result is strengthened by obtaining consistent results tested with economic, social and environmental disclosure components. In addition, if the company has a good social reputation, it will strengthen the relationship of foreign ownership to the quality of sustainability disclosure. Practical implications: These findings are relevant for policymakers, professional organizations and practitioners in Indonesia and other developing countries. Originality/value: The moderating effect of social reputation on the relation of the foreign board and foreign ownership-quality of sustainability disclosure as this study does remain rare in developing countries. This study complements various research conducted in developing countries, such as Indonesia, by offering a new dimension. The results indicate that social reputation has a moderating role in determining the impact of foreign ownership on the quality of sustainability disclosure.
KW - Foreign board
KW - Foreign investor
KW - Social reputation
KW - Sustainability disclosure quality
UR - http://www.scopus.com/inward/record.url?scp=85179914153&partnerID=8YFLogxK
U2 - 10.1108/CG-05-2022-0236
DO - 10.1108/CG-05-2022-0236
M3 - Article
AN - SCOPUS:85179914153
SN - 1472-0701
VL - 24
SP - 900
EP - 918
JO - Corporate Governance (Bingley)
JF - Corporate Governance (Bingley)
IS - 4
ER -