The Effect of Profitability, Leverage, and Size on Environmental Disclosure with the Proportion of Independent Commissioners as Moderating

Abstract

The purpose of this study is to evaluate the effect of profitability, leverage, and company size on environmental disclosure with the proportion of independent directors as moderator. A maximum of 61 agricultural and mining sector companies listed on the Indonesia Stock Exchange in 2014-2018 was the population of this report. The sampling method used purposing sampling, so with 45 units of analysis, we get 9 sample companies. The quantitative method used regression analysis for balance. The results show that profitability does not influence on environmental disclosure. Leverage has a negative effect on environmental disclosure. Company size has a positive effect on environmental disclosure. The proportion of independent directors is able to moderate the effect of profitability on environmental disclosure but is not able to moderate the effect of leverage and company size on environmental disclosure. This study concludes that leverage has a negative relationship with environmental disclosure and firm size has a positive relationship with environmental disclosure and the proportion of independent commissioners moderates the relationship between profitability and environmental disclosure. The findings show the important role of independent commissioners in environmental disclosure, namely providing investors with a balance and maintaining an unbiased and impartial atmosphere.

Pengaruh Profitabilitas, Leverage, Kepemilikan Publik dan Institusional Terhadap Pengungkapan Lingkungan

“…Wahyuningrum et al, (2021) dan Diantimala & Amril, (2018) menemukan bahwa profitabilitas memiliki pengaruh negatif terhadap pengungkapan lingkungan. Sementara Verawaty et al, (2020), Ardi & Yulianto (2020), Kurniawan (2019), serta Julekhah & Rahmawati (2019) mendapatkan hasil bahwa profitabilitas tidak memengaruhi pengungkapan lingkungan.…”

“…Pada penelitian Chiu et al, (2020) dan Ismail et al, (2018) antara leverage dan pengungkapan lingkungan terdapat pengaruh yang bersifat positif. Angela & Handoyo (2021), Purwanti & Nurjanah (2020), Ardi & Yulianto (2020) dan Diantimala & Amril (2018) dalam penelitiannya menunjukkan antara leverage terhadap pengungkapan lingkungan terdapat pengaruh negatif. Lalu pada penelitian Wahyuningrum et al, (2021), Terry & Asrori (2021), Maulia & Yanto (2020), Kurniawan (2019), serta Mutmainah & Indrasari (2017) pengungkapan lingkungan tidak terpengaruh oleh leverage.…”

An analysis of factors that affect earnings quality on Islamic commercial banks: The case at Indonesia and Malaysia

“…Likewise, liquidity also gives mixed results on earnings quality (Hasanuddin et al, 2021), but on the other hand, liquidity did not affect earnings quality (Herninta & Ginting, 2020). Furthermore, profitability, as proxied by return on assets (ROA), has no effect on earnings quality at commercial banks in Iraq (Imad et al, 2017), but in other studies, there is a partially significant effect of profitability on earnings quality (Herninta & Ginting, 2020;Purnamasari & Fachrurrozie, 2020;Risdawaty & Subowo, 2015;Warrad, 2017;Roy & Shijin, 2019). Hence, mixed results are prevalent for this study area, heavily influenced by the country's factors.…”

“…On the other hand, the profits quality factor proxied by discretionary accruals at Indonesian and Malaysian Islamic commercial banks produces similar findings, with no significant differences, as shown in Table 1. Previous research on the factors that affect earnings quality gives mixed results, where there is a direct influence of leverage on earnings quality (Imad et al, 2017;Purnamasari & Fachrurrozie, 2020;Ramadan, 2015;Risdawaty & Subowo, 2015;Warrad, 2017). However, in other studies, leverage does not contribute to earnings quality (Nadirsyah & Muharram, 2016;Soly & Wijaya, 2018;Hasanuddin et al, 2021).…”

Can Company Size Moderate Good Corporate Governance on Disclosure of Sustainability Reports?

“…The firm size is a scale where it can be classified as the size of the company in various ways, including the company's total assets, log size, stock market value, etc. (Ardi & Yulianto, 2020). Firm size is seen from the size of a company or can be seen from the financial performance of the company either on the Indonesia Stock Exchange or companies that are external to the Indonesia Stock Exchange.…”