Title: The Role of Foreign Board and Ownership on the Quality of Sustainability Disclosure: The Moderating Effect of Social Reputation
Authors:
- Arumega Zarefar
- Dian Agustia
- Noorlailie Soewarno
Department: Akuntansi
Journal Name: Corporate Governance (Bingley) Kinds of Journal: Q1
Keywords: Foreign board, Foreign investor, Social reputation, Sustainability disclosure quality
Abstract:
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.
For details: https://www.emerald.com/insight/content/doi/10.1108/cg-05-2022-0236/full/html
