Indonesia's low concern for labor issues

Abstract

Purpose -This study advances explanations of the communication level of labour disclosures of Indonesian listed companies. Design/methodology/approach -Year-ending 2007 Annual report disclosures of 223 Indonesia Stock Exchange (IDX) listed companies are analyzed. The Labour Practices and Decent Work Disclosure component of the 2006 Global Reporting Initiative (GRI) guidelines are used as the benchmark disclosure index checklist. Findings -The results show a low level of voluntary disclosure (17.7%). The highest level of communication is for issues related to Skills Management and Lifelong Learning Programs for Employees. Very few companies disclosed information about Health and Safety Committee and Agreements, and Salary of Men to Women. Statistical analysis reveals that government ownership and international operations are positively significant predictors of 'labour' communication. Isomorphic institutional theory partially explains the variability of these disclosures. Bigger companies also provide more Labour Practices and Decent Work Disclosures. Research limitations/implications -The main implications of the findings are that Indonesian companies are not clearly communicating labour responsibility issues as a key precondition of Corporate Social Responsibility (CSR). They may be obfuscating some information to protect their image and reputation. Originality/value -This paper provides insights into the disclosure practices of labour issues, a specific social disclosure theme which is rarely examined in prior literature, under the umbrella of institutional theory. The research also includes 'goal factor' to be tested as one of the independent variables.

Stakeholders’ Expectations on Human Capital Disclosure vs. Corporate Reporting Practice in Malaysia

“…On a similar note, the companies" disclosure for the item "employee turnover", that is perceived by the experts to be important (weighting of 2.55), is also found to be poor, as indicated by the low level of importance at 2.9%. This is consistent with Cahaya et. al (2012) finding of a low percentage of disclosure for the item "total number and rate of employee turnover by age group, gender, and region" at only 5.83% of listed companies in Indonesia during the year 2007.…”

“…The extent of human capital disclosure is measured on a dichotomous basis (0, 1). This approach is consistent with prior studies (Cahaya, 2012;Jindal and Kumar, 2012).…”

“…The reason to choose a dichotomous approach in this study was because it is more objective as it avoids scaling errors (Abeysekera, 2010). Furthermore, Cahaya (2012) stated that this method as a more relevant technique to be applied to all different type of companies since it is considered as a far less subjective approach than the weighted approach. As for Leventis and Weetman (2004), they stated that using both weighted and unweighted approach resulted the same conclusions and hence, suggested the application of unweighted disclosure index since it is the most commonly used method from prior literature.…”

“…Most prior studies attempt to measure the human capital reporting by applying the Global Reporting Initiative (GRI) index (Khan et. al., 2011;Cahaya et. al., 2012;Khan et.…”

Tujuan Tersembunyi Dalam Penggunaan Social Reporting

“…Dengan demikian, perusahaan dituntut untuk tidak hanya berfokus pada tujuan memperoleh laba, tetapi juga memperhatikan keberlanjutan isi dari planet bumi yaitu lingkungan (alam, flora, dan fauna) dan sosial (manusia) (Ferri, 2017;Husser, André, Barbat, & Lespinet-Najib, 2012;Ibrahim, Solikahan, & Widyatama, 2015). Meskipun saat ini hal tersebut masih bersifat sukarela dan direkomendasikan (Cahaya, Porter, Tower, & Brown, 2012, perusahaan diminta untuk melaporkan aktivitas CSR tersebut kepada stakeholder secara periodik melalui social reporting dengan teknik social accounting (Cardamone, Carnevale, & Giunta, 2012;Hossain & Alam, 2016;Swimberghe & Wooldridge, 2014). Social reporting dapat dijadikan media bagi perusahaan untuk menunjukkan sejauh mana kepeduliannya terhadap alam dan masyarakat dan kepatuhan terhadap regulasi.…”