Purpose With an attempt to give a deeper explanation regarding the manifestation of socially and environmentally responsible cultures among Indonesian natural resources industry, this paper aims to highlight the empirical confirmation on the correlation of corporate social responsibility (CSR), corporate financial performance (CFP) and risk. Likewise, corporate risk’s role as a mediating variable in the indirect effect of CSR on CFP is also examined. Design/methodology/approach Kinder, Lydenberg and Domini’s (KLD) measurement approach is used as a basis to assess social responsibility activities as it gives more social rating transparency. CFP captures both accounting- and market-based measurements, whereas volatility of stock return is adopted as a proxy of firm risk. Partial least squares analysis is conducted on 40 Indonesian listed firms in natural resources sector, with observation years from 2008 to 2016. Findings It is revealed that CSR positively affects CFP, although the correlation is stronger in the long run. Significant negative influence to risk is also discovered. However, risk has a significant adverse correlation with CFP when two years’ lagged value is used. Hence, CSR affects CFP through risk in the long-term, both directly and indirectly. Practical implications The empirical result suggests that CSR serves as a tool in managing the risk of enterprises and performance, especially in the long-term. Accordingly, firms should incorporate CSR as a strategic investment and manage a strong relationship with stakeholders. Originality/value This report expands further prior works and contributes to CSR and financial management literature by discovering the true nature of CSR effects as an investment in the future. This is the first study which tests and proves that CSR in Indonesian natural resources industry plays a significant role as a strategic risk management instrument that leads to a sustainable and long-lasting financial performance.

ABSTRAKTren penelitian tentang hubungan sustainability report dan kinerja keuangan mulai meningkat di Indonesia, seiring dengan makin meningkatnya jumlah perusahaan yang mempublikasikan sustainability report. Namun sebagian terbesar hasil-hasil penelitian tersebut masih belum konsisten. Penelitian ini bertujuan untuk menguji kembali hubungan antara pengungkapan sustainability report dengan kinerja keuangan. Ada dua hal yang membedakan penelitian ini dari sebelumnya, pertama, penelitian ini menggunakan perusahaan-perusahaan yang secara konsisten melaporkan sustainability report, dan kedua, penelitian ini menggunakan semua ukuran kinerja keuangan yang meliputi asset management, profitability, leverage, liquidity dan market. Sampel yang digunakan sebanyak 54 pengamatan yang berasal dari perusahaan-perusahaan yang secara konsisten melaporkan sustainability report selama periode 2009-2011. Hasil pengujian menunjukkan bahwa dimensi ekonomi (EC) dari sustainability report tidak berpengaruh terhadap kinerja keuangan, sedangkan dua dimensi lainnya yaitu lingkungan (EN) dan sosial (SO) berpengaruh negatif terhadap kinerja keuangan.Kata kunci: Sustainability report, dimensi ekonomi, dimensi sosial, dimensi lingkungan, kinerja keuangan. ABSTRACT PENDAHULUANPengungkapan laporan keberlanjutan (sustainability report) telah berkembang dan menjadi salah satu hal yang penting bagi setiap organisasi (Ernst and Young, 2013). Sustainability report menjadi media bagi perusahaan untuk menginformasikan kinerja organisasi dalam aspek ekonomi, sosial dan lingkungannya kepada seluruh pemangku kepentingan (stakeholders). Banyak organisasi sudah mulai beralih dari cara tradisional yang hanya melaporkan aspek keuangan, berubah ke arah yang lebih modern, yakni melaporkan semua aspek, baik keuangan maupun nonkeuangan (dimensi sosial dan lingkungan) kepada para pemangku kepentingan. Dalam penelitian yang

PurposeThis paper aims to examine whether companies in Indonesian controversial industries can rely on their corporate social responsibility (CSR) practices to improve potential employees' job pursuit intention, which lead to a higher quality of work life (QWL) and a better performance from their employees.Design/methodology/approachThe target respondents are interns, staff and supervisors of 42 Indonesian listed companies in controversial industries. The data collection method is performed by distributing questionnaires using a seven-point Likert scale. Collected data using partial least squares (PLS) analysis are conducted and tested.FindingsConsistent with the existing result, the authors find out that potential employees have a higher intention to join and accept a job offer from companies with a higher level of CSR practices. Regarding the corporate social responsibility, it is further proven to have a positive effect on employee's quality of work life. More interestingly, the findings of the current study reveal that CSR also affects employee performance (EP), both directly and indirectly, through QWL.Research limitations/implicationsFindings demonstrate that CSR in Indonesian controversial industry represents an important factor for recruiting top employees that lead to the improvement of the employee's quality of work life and performance.Practical implicationsThe findings indicate that enterprises should be more concerned about CSR engagement in attracting new talents, enhancing the quality of work life and cultivating the employee's performance.Originality/valueThis study enhances previous supports and studies on the concept of CSR and human resource management by analyzing the relationship between CSR and employee performance. Previous researches have concentrated their objectives in finding the link between CSR and the financial performance of a company. However, it must be understood that a company's success actually hinges on the performance of one of their greatest assets, the human resources. Additionally, due to the change in generations that will be the job seekers, recruitment strategy to attract job applicants and improve the job pursuit intention (JPI) is now needed more than ever. One of the strategies that Indonesian companies can use to do so is by practicing CSR. Hence, this is the first study in an attempt to observe the overall relationship of the CSR with the job pursuit intention, QWL and EP, especially in the controversial industries. The study will drive companies to intensify their efforts in maintaining good employee performance.

Purpose This study aims to examine the control of corporate governance towards firm risks for a sample of Indonesian firms in agriculture, mining and property industries. This study highlights the impact of four indicators of internal mechanism of corporate governance, i.e. board size, board independence, board gender and board ownership, on three measurements of firm risks, i.e. total risk, asset return risk and idiosyncratic risk. Design/methodology/approach Panel data analysis is conducted using a sample of 62 companies of agriculture, mining and property industries listed in Indonesia Stock Exchange from 2013 to 2017. Pooled ordinary least square with hetero-corrected is the statistical approach conducted to test the hypotheses. Findings The result indicates that board size and board gender insignificantly influence firm risks. While board independence gives varied impacts towards firm risks, it gives positive influence towards total asset return risk, insignificant towards idiosyncratic risk and negative towards total risk. Other interesting results are found in board ownership that has insignificant influence on asset return risk and negative influence on idiosyncratic and total risk. Research limitations/implications Firms should incorporate corporate governance, especially the impactful roles of board independence and board ownership as they serve as tools in reducing firm risk. Moreover, investors may have a better understanding of corporate governance and factors that are influencing firm risks. Therefore, this study can assist them to make the right investment decision. Originality/value This study is notably the first to use comprehensively three measurements of firm risks in Indonesia. Risks can come from internal and external, thus the company should understand the various types of risks facing the company. Total risk measures both the internal and external risks, while asset return risk gives another perspective using overall market perception about the equity and assets of the company. Finally, this study also measures internal risk, which is the only risk that can be controlled and minimised by the board of the company.

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