Disclosure of corporate social responsibility (CSR) and its implications on company value as a result of the impact of corporate governance and profitability

Abstract

Purpose The purpose of this study is to examine the effect of corporate governance and corporate profitability on firm value with corporate social responsibility (CSR) disclosure as the intervening variable. Design/methodology/approach The population of this study was all companies listed in the LQ 45 Index group in the Indonesia Stock Exchange in 2013-2014. The inferential statistics used in this study applied the partial least square (PLS) based structural equation model (SEM) method with the assistance of SmartPLS 2.0. The PLS method was selected based on the consideration that there was a construct formed with reflective indicators in this study. Findings From the results of this study, it can be concluded that corporate governance does not have any effect on CSR disclosure, profitability of company has an effect on CSR disclosure, CSR disclosure has an effect on firm value. In addition, CSR disclosure does not mediate the effect of on firm value. These results showed that corporate governance can have an effect on firm value directly, and there is no role of CSR disclosure in mediating the effect of corporate governance on firm value, and profitability of company has an effect on firm value through CSR disclosure. Originality/value The originality of this research is on the reason that many studies that have been conducted still indicated the inconsistency in the results and diversity of the indicators, so that a similar research was conducted by involving the indicators used for measuring the corporate governance variable, which were the proportion of independent commissioners and audit committee. Meanwhile, for the profitability variable, return on assets and return on equity were used as the indicators.

An Analysis of Sustainable Finance Disclosure at Indonesian Sharia Commercial Banks using POJK 51/POJK.03/2017

“…Various studies have found that CG elements, including the size of the board of directors [9], [10], [11], independent directors [11], [12], [13], and audit committee [14], [15], are determinants that have positive effect on sustainable disclosure. However, other researches find no effect [16], [17].…”

“…Banks' actions can have a major impact on society in general, and public demand for banks has both "ethics" and "values" (i.e. environmentally friendly banking practices) [16]. With deregulation and reduced state power in favor of the economy, there is expectation that banks should not only enjoy deregulation rights but also have an obligation for the interests of stakeholders by maintaining a balance between nature, social, and economy [18].…”

Efek Moderasi Pelaporan Berkerlanjutan dalam Pengaruh Praktik Penghindaran Pajak Terhadap Nilai Perusahaan

“…Menurut [34], hasil penelitiannya menunjukkan bahwa tata kelola perusahaan dapat berdampak pada nilai perusahaan secara langsung. Hasil lainnya menyatakan tidak ada peran pengungkapan CSR dalam memediasi efek tata kelola perusahaan terhadap nilai perusahaan.…”

Does Corporate Governance Influence Value Creation : Assessing the Mediating Role of CSR and Tax Avoidance

“…This distinguishes it from previous studies done on the influence of GCG, CSR, and tax avoidance on value creation that were partial. The results of a study conducted by Mangoting et al, (2019), Kamaliah (2020) deduced that the CSR disclosure of a company could not mediate the relationship between GCG and value creation. This is because CSR disclosure incurs a high cost for the company, so directors and commissioners usually do not mandate it, instead making CSR a voluntary activity.…”