Intervention of Sustainability Report Disclosure toward the Effect of Good Corporate Governance on Financial Performance

  • Ni Nyoman Meita Jayantini Department of Accounting Udayana University, Denpasar, Indonesia
  • I Ketut Sujana Department of Accounting Udayana University, Denpasar, Indonesia
Keywords: Size of the Board of Commissioners, Proportion of Independent Commissioners, Size of the Audit Committee, Sustainability Report, Company’s Financial Performance.

Abstract

This study aims to examine intervention of sustainability report disclosure toward the effect of good corporate governance on company’s financial performance. The company's financial performance is well illustrated with a high level of profit achievement. By implementing good corporate governance, the company's financial performance will tend to increase. The company also needs to disclose the sustainability report. Sustainability report disclosure is a logical consequence of the implementation principles of Good Corporate Governance (GCG). The GCG in this study was measured by the size of the board of commissioners, the proportion of independent commissioners, and size of the audit committee; sustainability report disclosure was measured by SRDI; and financial performance was measured by the ratio of net profit margin. The population of this study was mining companies listed on the Indonesia Stock Exchange during the period 2013-2016. The sample determination method uses purposive sampling. The analysis technique used is path analysis. The results of this study indicate that the size of the board of commissioners has no effect on sustainability report disclosure and the company’s financial performance, the proportion of independent commissioners and the size of the audit committee has a positive effect on sustainability report disclosure and the company’s financial performance. Sustainability report disclosure does not mediate the effect of the size of the board of commissioners on the company's financial performance, but sustainability report disclosure mediates the effect of the proportion of independent commissioners and the size of audit committee on the company's financial performance.

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Published
2018-10-10
Section
Articles