The Importance of Commissioners Board Diversity in CSR Disclosures

  • Anita Ade Rahma Universitas Putra Indonesia YPTK Padang
  • Febri Aldi Universitas Putra Indonesia YPTK, Dept of Accounting
Keywords: Corporate Social Responsibility, Commissioner Board, Gender, Nationality, Ethnic

Abstract

Good companies are inseparable from good Corporate Social Responsibility (CSR). CSR is one indication of whether or not a company is good or bad. CSR has a real impact on the environment and society. The better the impact obtained from the company's CSR, the better the company's performance. CSR activities can be seen from the CSR disclosures. CSR disclosure is influenced by various internal and external factors. As for this study, we want to analyze the influence of the diversity of the board of commissioners on CSR disclosure. The independent variables used in this study are gender commissioners, nationality commissioners, and ethnic commissioners.

 Company data used are from LQ45 companies listed on the Indonesia Stock Exchange in 2015-2017. 20 companies were found to be the sample of this study using purposive sampling method. From the data processing that has been done, the results obtained are that Gender commissioners have no effect on CSR disclosure. Likewise, the Nationality commissioner proved not to affect the increase in CSR disclosure. but conversely with Ethnic commissioners who have a significant influence on CSR disclosure. This means that ethnic diversity on the board of commissioners is very important. In addition to expanding CSR disclosure can also improve company performance.

References

Abad, D., Lucas-Pérez, M. E., Minguez-Vera, A., & Yagüe, J. (2017). Does gender diversity on corporate boards reduce information asymmetry in equity markets? BRQ Business Research Quarterly, 20(3), 192–205. https://doi.org/10.1016/j.brq.2017.04.001

Abdul, W. E. A., Marzuki, M. M., Jaafar, S. B., & Masron, T. A. (2018). Board diversity and total directors’ remuneration: evidence from an emerging market. Pacific Accounting Review, 30(2), 243–272. https://doi.org/10.1108/PAR-02-2016-0021

Alazzani, A., Wan-Hussin, W. N., & Jones, M. (2019). Muslim CEO, women on boards and corporate responsibility reporting: some evidence from Malaysia. Journal of Islamic Accounting and Business Research, 10(2), 274–296. https://doi.org/10.1108/JIABR-01-2017-0002

Antoro, D. A., & Hermuningsih, S. (2017). Kebijakan Dividen dan BI Rate Sebagai Pemoderasi Likuiditas, dan Leverage Terhadap Nilai Perusahaan Perbankan yang Terdaftar Di BEI. 2(1).

Bustami, R., Nasruddin, E., Sen, K., & Ng, F. (2011). Ethnic Diversity in the Pluralistic Economy: Corporate Social Responsibility (CSR) in Four Critical Areas of Organizational Integration in Malaysia and Beyond. In Asian CSR and Sustainability Review (Vol. 2).

Choi, J., Chang, Y. K., Li, Y. J., & Jang, M. G. (2016). Doing good in another neighborhood: Attributions of CSR motives depend on corporate nationality and cultural orientation. Journal of International Marketing, 24(4), 82–102. https://doi.org/10.1509/jim.15.0098

Cook, A., & Glass, C. (2018). Women on corporate boards: Do they advance corporate social responsibility? Human Relations, 71(7), 897–924. https://doi.org/10.1177/0018726717729207

Galbreath, J. (2018). Is Board Gender Diversity Linked to Financial Performance? The Mediating Mechanism of CSR. Business and Society, 57(5), 863–889. https://doi.org/10.1177/0007650316647967

Gulzar, M. A., Cherian, J., Hwang, J., Jiang, Y., & Sial, M. S. (2019). The impact of board gender diversity and foreign institutional investors on the corporate social responsibility (CSR) engagement of Chinese listed companies. Sustainability (Switzerland), 11(2), 1–19. https://doi.org/10.3390/su11020307

Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Public Policy, 24(5), 391–430. Retrieved from https://econpapers.repec.org/article/eeejappol/v_3a24_3ay_3a2005_3ai_3a5_3ap_3a391-430.htm

Harjoto, M. A., Laksmana, I., & Yang, Y. wen. (2019). Board nationality and educational background diversity and corporate social performance. Corporate Governance: The International Journal of Business in Society, 19(2), 217–239. https://doi.org/10.1108/CG-04-2018-0138

Khan, A., Muttakin, M. B., & Siddiqui, J. (2013). Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy. Journal of Business Ethics, 114(2), 207–223. https://doi.org/10.1007/s10551-012-1336-0

Khan, I., Khan, I., & Saeed, B. bin. (2019). Does board diversity affect quality of corporate social responsibility disclosure? Evidence from Pakistan. Corporate Social Responsibility and Environmental Management, csr.1753. https://doi.org/10.1002/csr.1753

Kusumastuti, S., Supatmi, & Sastra, P. (2014). Pengaruh Board Diversity Terhadap Nilai Perusahaan Dalam Perspektif Corporate Governance. Jurnal Akuntansi Dan Keuangan, 9(2), 88–98.

Lam, N. M. K., & MacGregor, J. (2018). Influence of ethnic values on public sector performance management: Comparative study between Canada and Hong Kong. Asian Education and Development Studies, 7(2), 234–250. https://doi.org/10.1108/AEDS-06-2017-0056

Ling, T. W., Shaipah, N., & Wahab, A. (2019). Components of book tax differences, corporate social responsibility and equity value. Cogent Arts & Humanities, 1–19. https://doi.org/10.1080/23311975.2019.1617024

Lusiana, & Rahma, A. A. (2017). Pengaruh Firm Size, Profitability, Audit Committee Size, Dan Auditor Opinion Terhadap Audit Delay Pada Perusahaan LQ-45 Yang Terdaftar Di Bursa Efek Indonesia Tahun 2011-2015. Majalah Ilmiah, 24(1), 191–205.

McDonald, M. L., Keeves, G. D., & Westphal, J. D. (2018). One step forward, one step back: White male top manager organizational identification and helping behavior toward other executives following the appointment of a female or racial minority CEO. Academy of Management Journal, 61(2), 405–439. https://doi.org/10.5465/amj.2016.0358

Oxelheim, L., & Randøy, T. (2003). The impact of foreign board membership on firm value. Journal of Banking & Finance, 27, 2369–2392. https://doi.org/10.1016/S0378-4266(02)00395-3

Pichler, S., Livingston, B., Yu, A., Varma, A., Budhwar, P., & Shukla, A. (2019). Nationality diversity and leader–Member exchange at multiple levels of analysis. Equality, Diversity and Inclusion: An International Journal, 38(1), 20–39. https://doi.org/10.1108/EDI-03-2018-0054

Polovina, N., & Peasnell, K. (2015). The effect of foreign management and board membership on the performance of foreign acquired Turkish banks. International Journal of Managerial Finance, 11(3), 359–387. https://doi.org/10.1108/IJMF-06-2014-0086

Rahma, A. A., Elfiswandi, & Putri, I. P. (2017). Analisis Perbandingan Return Saham Dan Volume Perdagangan Saham Sebelum Dan Sesudah Right Issue. Majalah Ilmiah, 24(1), 137–144.

Rahma, A. A., Lusiana, & Indriani, P. (2019). Pengaruh Struktur Modal, Profitabilitas dan Size Perusahaan terhadap Ketepatan Waktu Pelaporan Keuangan pada Perusahaan Manufaktur. 210–220. https://doi.org/10.22216/jbe.v4i2.3698

Rahma, A. A., Mary, H., & Gozali, C. (2019). Pengaruh Komposisi Dewan Komisaris terhadap Capital Structure pada Perusahaan Manufaktur. SINMAG3, 2(2).

Sial, M. S., Zheng, C., Cherian, J., Gulzar, M. A., Thu, P. A., Khan, T., & Khuong, N. V. (2018). Does corporate social responsibility mediate the relation between boardroom gender diversity and firm performance of Chinese listed companies? Sustainability (Switzerland), 10(10). https://doi.org/10.3390/su10103591

Slacik, J., & Greiling, D. (2019). Compliance with materiality in G4-sustainability reports by electric utilities. International Journal of Energy Sector Management. https://doi.org/10.1108/IJESM-03-2019-0010

Sudana, I. M., & Arlindania, P. A. (2011). Corporate Governance Dan Pengungkapan Corporate Social Responsibility Pada Perusahaan Go-Public Di Bursa Efek Indonesia. Jurnal Manajemen Teori Dan Terapan | Journal of Theory and Applied Management, 4(1). https://doi.org/10.20473/JMTT.V4I1.2411

Suhardjanto, D., & Permatasari, N. D. (2010). Pengaruh Corporate Governance, Etnis, dan Latar Belakang Pendidikan Terhadap Environmental Disclosure. Kinerja, 14(2), 151–164. Retrieved from https://media.neliti.com/media/publications/164653-ID-pengaruh-corporate-governance-etnis-dan.pdf

Traxler, A. A., & Greiling, D. (2019). Sustainable public value reporting of electric utilities. Baltic Journal of Management, 14(1), 103–121. https://doi.org/10.1108/BJM-10-2017-0337

Zhang, J. Q., Zhu, H., & Ding, H. (2013). Board Composition and Corporate Social Responsibility: An Empirical Investigation in the Post Sarbanes-Oxley Era. Journal of Business Ethics, Vol. 114, pp. 381–392. https://doi.org/10.2307/23433787

Published
2020-05-05
How to Cite
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. https://doi.org/10.37385/ijedr.v1i2.66