The effect of managerial and institutional ownership on corporate social responsibility disclosure

Abstract

Purpose This study aims to analyze the effect of ownership structure that consists of managerial ownership and institutional ownership of the extensive of corporate social responsibility (CSR) disclosure. Design/methodology/approach The population in this study is manufacturing companies listed in Indonesia Stock Exchange (BEI), as the manufacturing companies are considered to have great potential on environmental damage (Mathews, 2000). The selected sample were the companies which meet certain criteria (purposive sampling) which published the complete annual financial statements from 2011 to 2015. This study used an analysis method using partial least square (WarpPLS) to assess the effect of the structure of ownership consists of managerial ownership and institutional ownership on the extent of the CSR disclosure. Findings The results showed that there is a direct effect of a negative and significant correlation between managerial ownership on CSR disclosure, and there is a direct effect of a positive and significant correlation between institutional ownership on CSR disclosure. Originality/value Originality of this paper shows PLS (WarpPLS) that applied to determine the effect between variables managerial and institutional ownership on CSR disclosure. This research is collected data financial statements and annual reports of manufacturing companies obtained from the Indonesia Capital Market Reference Center (PRPM), which is located in the Indonesia Stock Exchange (IDX), which there has not been research by the methods and the same location.

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