Corporate social responsibility and corporate governance in Indonesian public listed companies

Abstract

Abstract. This study aims to investigate whether theree has been a change in the level of corporate social responsibility (CSR) disclosure and to examine whether corporate governance attributes influence CSR disclosure in corporate annual report of Indonesian public listed companies(PLCs). The annual reports of 115 PLC for two years (2011 and 2012) were analysed using content analysis. Multiple regression analysis was utilized to determine factors influencing CSR disclosure in annual reports. Consistent with expectations, the paired sample t-test showed that there was an increase (significant at the 1 percent level) in the extent of CSR disclosure. The multiple regression analysis revealed that audit committee effectiveness and company's size were positively associated with the extent of CSR disclosure (significant at 5 per cent level). The findings appear to suggest that The Indonesian Capital Market and Financial Institutions Supervisory Agency (Bapepam LK) effforts in promoting CSR through the release of Regulation No X.K.6 in 2012 have had some positive impact on CSR disclosure in annual report. The results also suggest that the involvement of audit committee through its effectiveness in overseeing company's financial reporting could lead to better concern in corporate social activities and hence disclosure in annual reports. This study however, has limitation that should be considered in interpreting the results. The regression model documented an R 2 of 21.4 percent, which indicates that almost 80 percent of factors influencing CSR disclosure in Indonesian PLC have not been captured by the model. These other factors may perhaps be indentified in the next research.

Factors influencing biological asset disclosures in agricultural companies in Indonesia

“…Contrary to our expectations, EFAC does not impact biological asset reporting. The result is contradictory to previous studies, which found that audit committee effectiveness significantly improve the accuracy of financial reporting in terms of corporate social responsibility disclosures [24], environmental reporting [25], and timeliness of reporting [13].…”

“…According to agency theory, a well-functioning audit committee should be able to raise standards for all aspects of financial reporting, including transparency and the extent of disclosures [24]. Previous works have confirmed that audit committee effectiveness significantly improves disclosure quality, for example corporate social responsibility disclosures [24], environmental reporting [25], carbon emission disclosures [26]. Hence this study predicts that the effectiveness of audit committee has a favorable association with the amount of biological asset disclosures.…”

“…Concentrated share ownership occurs when a small number of people or organizations own the majority of the company's stock, giving these shareholders a disproportionate amount of control over the company's stock. In Indonesia, a person or organization holding 5 per cent shares or more is called a substantial shareholder [24,25]. The proxy for OCON in this research is the total number of the share proportion retained by substantial shareholders.…”

“…Financial reporting quality, internal control, and external auditing are all areas where the committee has supervisory responsibilities as a board committee. According to agency theory, a well-functioning audit committee should be able to raise standards for all aspects of financial reporting, including transparency and the extent of disclosures [24]. Previous works have confirmed that audit committee effectiveness significantly improves disclosure quality, for example corporate social responsibility disclosures [24], environmental reporting [25], carbon emission disclosures [26].…”

Environmental disclosure in the annual reports of the Russian retailers

“…In the study of the companies' environmental and social disclosure, the content analysis method was widely used, while annual reports were the main source of information (Dagiliene & Gokiene, 2011;Azim & Rahman, 2012;Ika, Dwiwinarno & Widagdo, 2017). The source of information for analysis in the present study was the annual reports of the largest Russian retailers for 2016 (Table 1) (Forbes, 2017) At the first stage, quantitative and qualitative characteristics of environmental information presented in the annual reports of retailers were compared, including the share of the environmental section in the total volume of the report and its social and environmental section, the availability of illustrative numerical data and photographs, indication of environmental standards defining the companies' activity.…”