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

2020 ◽  
Vol 62 (4) ◽  
pp. 339-354
Author(s):  
Kamaliah Kamaliah
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Partial Least Square ◽  
Least Square ◽  
Content Type ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Impact

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.

scholarly journals Good Corporate Governance, Corporate Social Responsibility, Firm Value, and Financial Performance as Moderating Variable

2019 ◽  
Vol 3 (1) ◽  
pp. 55 ◽  
Author(s):  
Mukhtaruddin Mukhtaruddin ◽  
Ubaidillah Ubaidillah ◽  
Kencana Dewi ◽  
Arista Hakiki ◽  
Nopriyanto Nopriyanto
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Firm Value ◽  
Negative Impact ◽  
Partial Least Square ◽  
Least Square ◽  
Good Corporate Governance ◽  
Corporate Social

Good corporate governance and corporate social responsibility can assist the company in facing the challenges and risks as a strategy in increasing the firm value by building the right image from the stakeholders’ view. This study aims to determine the effect of good corporate governance and corporate social responsibility on firm value with financial performance as a moderating variable. The population of this research is banking companies listed in Indonesia Stock Exchange (IDX) for 2011–2015. The sample consisted of 23 companies which were selected by purposive random sampling. This data is analyzed by using Partial Least Square approach. The results of this study indicate that good corporate governance has an insignificant positive effect on firm value; otherwise corporate social responsibility has a significant negative impact on firm value. Financial performance has significantly strengthened the relationship between good corporate governance and corporate social responsibility on firm value.

scholarly journals The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable

2018 ◽  
Vol 3 (1) ◽  
pp. 41-60 ◽  
Author(s):  
Mayang Mahrani ◽  
Noorlailie Soewarno
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Performance ◽  
Partial Least Square ◽  
Least Square ◽  
Content Type ◽  
Good Corporate Governance ◽  
Corporate Social

Purpose The purpose of this paper is to determine the direct influence of the mechanism of good corporate governance (GCG) and corporate social responsibility (CSR) on financial performance as well as through earnings management as a mediating variable. Design/methodology/approach The data used in this research are secondary data involving 102 companies listed on the Indonesian Stock Exchange for the period 2014. The data used in this study were analyzed using partial least square and carried out with the help of software WarpPLS 5.0. Findings The results show that the mechanism of GCG and CSR has a positive effect on financial performance as well as the CSR on financial performance. Originality/value The results also show partial mediation of earnings management on impact of GCG mechanisms on financial performance and full mediation of earnings management on impact of CSR on financial performance.

scholarly journals Corporate Social Responsibility Terhadap Nilai Perusahaan Dengan Profitabilitas Sebagai Variabel Intervening

2020 ◽  
Vol 17 (4) ◽  
pp. 607-618
Author(s):  
Ummu Kalsum
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Partial Least Square ◽  
Least Square ◽  
Corporate Social ◽  
The Impact

This study aims to examine the effect of Corporate Social Responsibility (CSR) on Company Value and Profitability and how the impact of disclosure of Corporate Social Responsibility (CSR) on firm value through Profitability as an Intervening Variable. This study uses a sample of mining companies listed on the Stock Exchange and uses a purposive sampling technique. This research is quantitative. The data used is secondary data and uses data collection methods, namely documentation and literature. A study conducted using Partial Least Square (PLS) shows that Corporate Social responsibility has a negative and insignificant effect on firm value. Corporate Social responsibility has a positive and significant impact on Profitability, and Profitability has a negative and little impact on Firm Value and Profitability can mediate Corporate Social responsibility on Firm Value as an intervening variable

Comparative analysis of QISMUT+3’s Islamic corporate social responsibility

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Agung Nur Probohudono ◽  
Astri Nugraheni ◽  
An Nurrahmawati
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Statistical Testing ◽  
Content Type ◽  
Islamic Bank ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Impact ◽  
Positive Effect

Purpose The purpose of this study is to analyze the impact of corporate social responsibility (CSR) disclosure on the financial performance of Islamic banks across nine countries as major markets that contribute to international Islamic bank assets (Indonesia, Malaysia, Saudi Arabia, UAE, Kuwait, Qatar, Turkey, Bahrain and Pakistan or further will be called QISMUT + 3 countries). Design/methodology/approach Islamic Social Reporting Disclosure Index (ISRDI) is being used as a benchmark for Islamic bank CSR performance that contains a compilation of CSR standard items specified by the Accounting and Auditing Organization for Islamic Financial Institutions. The secondary data is collected from the respective bank’s annual reports and it used the regression analysis techniques for statistical testing. Findings This study found that CSR disclosure measured by ISRDI has a positive effect on financial performance. Almost all ISRDI sub-major categories have a positive effect on financial performance except the “environment” subcategory. The highest major subcategory for ISRDI is the “corporate governance” category (82%) and the “environment” category (13%) is the lowest. For the UAE, Kuwait and Turkey, the ISRDI is positively affected by financial performance and the other countries on this research are not. Originality/value This study highlighted the economic benefits of social responsibility practices as a part of business ethics in nine countries that uphold the value of religiosity. Thus, the development of the results of this research for subsequent research is very wide open.

scholarly journals Board and corporate social responsibility disclosure of multinational corporations

2019 ◽  
Vol 27 (1) ◽  
pp. 77-98 ◽  
Author(s):  
Hanh Thi Song Pham ◽  
Hien Thi Tran
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Multinational Corporations ◽  
Board Independence ◽  
Content Type ◽  
Csr Reporting ◽  
The One ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Impact

Purpose This paper aims to investigate the effects of board model and board independence on corporate social responsibility (CSR) disclosure of multinational corporations (MNCs). Design/methodology/approach The authors developed an empirical model in which CSR disclosure is the dependent variable and board model (two-tier vs one-tier), board independence (a proportion of independent directors on a board) and the interaction variable of board model and board independence together with several variables conventionally used as control variables are independent variables. The authors collated the panel dataset of 244 Fortune World’s Most Admired (FWMA) corporations from 2005 to 2011 of which 117 MNCs use the one-tier board model, and 127 MNCs use the two-tier board model from 20 countries. They used the random-effect regression method to estimate the empirical models with the data they collated and also ran regressions on the alternative models for robustness check. Findings The authors found a significantly positive effect of a board model on CSR disclosure by MNCs. Two-tier MNCs tend to reveal more CSR information than one-tier MNCs. The results also confirm the significant moderating impact of board model on the effect of board independence on CSR disclosure. The effect of board independence on CSR disclosure in the two-tier board MNCs tends to be higher than that in the one-tier board MNCs. The results do not support the effect of board independence on CSR disclosure in general for all types of firms (one-tier and two-tier board). The impact of board independence on CSR disclosure is only significant in two-tier board MNCs and insignificant in one-tier board MNCs. Practical implications The authors advise the MNCs who wish to improve CSR reporting and transparency to consider the usage of two-tier board model and use a higher number of outside directors on board. They note that once a firm uses one-tier model, number of IDs on a board does not matter to the level of CSR disclosure. They advise regulators to enforce an application of two-tier board model to improve CSR reporting and transparency in MNCs. The authors also recommend regulators to continue mandating publicly traded companies to include more external members on their boards, especially for the two-tier board MNCs. Originality/value This paper is the first that investigates the role of board model on CSR disclosure of MNCs.

Corporate governance and corporate social responsibility interface: a case study of private equity

2020 ◽  
Vol 20 (4) ◽  
pp. 703-717 ◽  
Author(s):  
Virgo Süsi ◽  
Krista Jaakson
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Private Equity ◽  
Resource Dependence Theory ◽  
Medium Size ◽  
Content Type ◽  
Corporate Social

Purpose This paper aims to explore why private equity (PE) cares about corporate social responsibility (CSR) of its investees given their relatively short investment time-horizon and how it designs corporate governance (CG) bundle to achieve both financial and CSR goals of the private firms it invests in. Design/methodology/approach Case study design is applied to get deeper insights on the why and how questions posed. Analysis is based on triangulation of secondary data and in-depth interviews with both PE and their investee firms. Findings The authors find that long-term sustainability supported by CSR increases firm value. They also outline specific CG bundle that the PE uses to achieve both its financial and CSR goals. CG mechanisms appeared to reflect agency theory, but even more resource dependence theory. Practical implications The outlined CG bundle could be used as a template for all types of private firm owners to improve both financial and CSR performance of the firm. Originality/value The paper adds to fragmented area of CG and CSR interface. The authors specifically focus on several under-researched contexts of this interface: private small and medium size firms (SMEs), emerging markets and PE investors.

Is corporate governance relevant to the quality of corporate social responsibility disclosure in large European companies?

2019 ◽  
Vol 27 (2) ◽  
pp. 301-332 ◽  
Author(s):  
Christine Adel ◽  
Mostaq M. Hussain ◽  
Ehab K.A. Mohamed ◽  
Mohamed A.K. Basuony
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
European Countries ◽  
Social Implications ◽  
Content Type ◽  
Csr Reporting ◽  
Csr Disclosure ◽  
Corporate Social

Purpose This paper aims to report on the quality of corporate social responsibility (CSR) disclosure in S&P Europe 350 companies. The paper also examines the impact of corporate governance structure and other firm-specific characteristics on the quality of CSR disclosure in European companies. Design/methodology/approach The paper uses a disclosure index adopted from Jizi et al. (2014). Moreover, the paper contributes to the CSR disclosure literature by developing a new index that includes all the aspects introduced by the Global Reporting Initiative version 4.The data of CSR reporting are manually collected from the firms’ reports. The population and sample of this study are related to 350 companies operating in 16 European countries. Tobit regression analysis is used to test the hypotheses. Findings The results reveal that directors’ ownership, the presence of a CSR committee and firm size positively affect the quality of CSR reporting. Further testing of the independent variables on each CSR sub-category is made. The CSR sub-categories used are, namely, community involvement, employees, environment, social product and service quality, supply chain sustainability and business ethics. The presence of a sustainability committee inside the company is the only factor that shows a strong positive effect on the disclosure of every CSR sub-category and the CSR inclusive index. Research limitations/implications The limitations of this research are that it focuses exclusively on the effect of the internal corporate mechanisms on the quality of CSR reporting; disregarding the economic, institutional, political and cultural factors that can play a role in influencing sustainability reporting of the companies. Practical implications Better CSR disclosure leads to the firm having a better image in the society; this, in turn, has implications on firm performance, attracting funds, as well as recruiting and retaining high profile employees. Stakeholders are placing cumulative significance to corporate transparency particularly in the area of CSR. Managers should exert more efforts into not only improving the disclosure of the various facts of CSR but also into using the various media available for disclosure. Companies should take the initiative of establishing a CSR committee to ensure effective formation and implementation of CSR policies and disclosure of CSR activities. Social implications The CRS research itself bears the merit of social implications. Moreover, the findings of this research pave the way for future researches to examine the effect of the adoption of global CSR initiatives and frameworks on the quality of CSR reporting. Originality/value This paper contributes to the CSR disclosure literature by developing a new index that includes all the aspects of CSR and exploring the relation between the rarely explored “presence of sustainability committee” and CSR disclosure, as well as testing a vast number of CSR sub-categories that is not extensively covered in previous studies. Moreover, the paper covers a large sample of companies across 16 European countries, in terms of their stand-alone sustainability reports, dedicated chapters of CSR in annual reports, integrated reports, website CSR information and any attachments/links provided on the websites for further CSR documents, brochures or data sheets.

Corporate governance and financial characteristic effects on the extent of corporate social responsibility disclosure

2014 ◽  
Vol 10 (4) ◽  
pp. 569-590 ◽  
Author(s):  
Grigoris Giannarakis
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Chief Executive ◽  
Financial Leverage ◽  
Content Type ◽  
The Usa ◽  
Financial Characteristics ◽  
Csr Disclosure ◽  
Corporate Social

Purpose – This study aims to investigate the relationship between corporate governance and financial characteristics and the extent of corporate social responsibility (CSR) disclosure in the USA. These corporate governance and financial characteristics are the board meetings, average age of board members, presence of women on the board, the board’s size, chief executive officer duality, financial leverage, profitability, company’s size, board composition and board’s commitment to CSR. Design/methodology/approach – The sample consists of 100 companies from the Fortune 500 list for 2011. The environmental, social and governance disclosure score calculated by Bloomberg is used as a proxy for the extent of CSR disclosure. A multiple linear regression was incorporated to investigate the association of corporate characteristics with CSR disclosure. Findings – Results indicate that the company’s size, the board commitment to CSR and profitability were found to be positively associated with the extent of CSR disclosure, while financial leverage is related negatively with the extent of CSR disclosure. Research limitations/implications – The research is based only on the presence or absence of CSR items in CSR disclosure, and it ignores the quality dimension which can lead to misinterpretation. The results should not be generalized as the sample was based on US companies for 2011. Originality/value – The study assists stakeholders to identify US companies through the extent of CSR disclosures which contributes to the understanding of determinants of CSR disclosure to improve the implementation of disclosure guidelines.

scholarly journals The roles of cost of capital, corporate governance, and corporate social responsibility in improving firm value: evidence from Indonesia

2019 ◽  
Vol 16 (4) ◽  
pp. 28-36 ◽  
Author(s):  
Kartika Hendra Titisari ◽  
M. Moeljadi ◽  
Kusuma Ratnawati ◽  
Nur Khusniyah Indrawati
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Cost Of Capital ◽  
Corporate Sustainability ◽  
Corporate Image ◽  
Negative Effect ◽  
Corporate Social ◽  
The Impact

Corporate governance (CG) and corporate social responsibility (CSR) are important subjects for corporate sustainability that affect firm value (FV). At the same time research results in several countries provide diverse empirical evidence. This study analyzes the impact of corporate governance (CG) and corporate social responsibility (CSR) on firm value (FV) through the cost of capital (CoC) in public companies of Indonesia. The research sample includes 27 companies that publish sustainability reports and corporate governance reports, with an observation period from 2010 till 2016. This study presents the analysis of three firm value proxies (Tobin’s q (TQ), Price Earnings Ratio (PER), and Price to Book Value (PBV)). Results of hypotheses testing using Partial Least Squares (PLS) show that CG and CSR have both direct and indirect effects on FV. These findings are consistent for all three firm value assessments. According to direct testing, CG has a negative effect on FV, while CSR has a positive effect. The CoC acts as a mediating variable in this relationship. The CG and CSR have a negative effect on CoC, while CoC has a negative effect on FV. The findings show that CG and CSR can improve the company performance and corporate image internally and externally, thereby increasing the investors` confidence, and companies have the opportunity to obtain inexpensive funding sources that can reduce CoC. A decrease in CoC can increase profitability and have an impact on FV increasing.

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