The Impact of Corporate Social Responsibility and Corporate Governance on Firm Performance: A Study of ESG Quality 45 IDX-KEHATI
Article Sidebar
Published
Dec 28, 2023
Main Article Content
Abstract
The KEHATI-listed companies have displayed commendable SRI performance across financial metrics and transactional liquidity. Among these firms, PT Danone Indonesia faced a Corporate Social Responsibility (CSR) issue in 2012 due to the uneven distribution of benefits, which prompted community protests and undermined the company's efficacy, ultimately impacting its performance. The overarching objective of this study is to explore and comprehend the relationship between CSR, corporate governance, and their potential impact on the performance of ESG QUALITY 45 IDX KEHATI listed on the Indonesia Stock Exchange (IDX). The study utilized panel regression analysis to analyze data collected over five years (2017-2021) from IDX. The research implies that there is no substantial relationship between corporate governance and performance. However, the findings evidence implies that there is a strong negative relationship between CSR and ROE, while ROA remains unaffected. In terms of control variables, the study found no significant correlation between firm size and ROA and ROE, while leverage had shown a substantial negative influence on both financial performance measures. This research sheds light on the connection between CSR, corporate governance, and business performance.
Article Details
Section
Articles
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
References
Ahmed, F., Talreja, S., & Kashif, M. (2019). Effects of Corporate Governance and Capital Structure on Firms’ Performance: Evidence from Major Sectors of Pakistan. Indonesian Capital Market Review, 10(2), 90–104. https://doi.org/10.21002/icmr.v10i2.10873
Benali, M., Jihad EL, Y., & MOUFDI, G. (2021). Impact of Corporate Social Responsibility on Financial Performance of Listed Moroccan Companies. International Journal of Financial Accountability, Economics, Management, and Auditing, 3(3), 132–144. https://doi.org/10.52502/ijfaema.v3i3.58
Chaudhry, N. I., Roomi, M. A., & Aftab, I. (2020). Impact of Expertise of Audit Committee Chair and Nomination Committee Chair on Financial Performance of Firm. Corporate Governance (Bingley), 20(4), 621–638. https://doi.org/10.1108/CG-01-2020-0017
Cherian, J., Umar, M., Thu, P. A., Nguyen-Trang, T., Sial, M. S., & Khuong, N. V. (2019). Does Corporate Social Responsibility Affect the Financial Performance of The Manufacturing Sector? Evidence from an Emerging Economy. Sustainability (Switzerland), 11(4), 1–14. https://doi.org/10.3390/su11041182
Cintya, Y. A. (2020). Komite Nominasi dan Remunerasi Di Perusahaan Indonesia Untuk Pelaksanaan Enterprise Risk Management (ERM) Yang Lebih Baik. Https://Crmsindonesia.Org/. https://crmsindonesia.org/publications/komite-nominasi-dan-remunerasi-di-perusahaan-indonesia-untuk-pelaksanaan-enterprise-risk-management-erm-yang-lebih-baik/
Darmawan. (2020). Dasar-dasar Memahami Rasio & Laporan Keuangan. https://www.google.co.id/books/edition/Dasar_dasar_Memahami_Rasio_dan_Laporan_K/oggREAAAQBAJ?hl=id&gbpv=1&dq=rasio+likuiditas+adalah&pg=PA59&printsec=frontcover
Dasgupta, A. (2022). Impact of Corporate Governance on Financial Performance of Select I.T. Firms in India. InternationalConference OnEconomics, Finance & Business, 2(1), 209–217. https://doi.org/10.19275/RSEPCONFERENCES169
Fourati, Y. M., & Dammak, M. (2021). Corporate Social Responsibility and Financial Performance: International Evidence of The Mediating Role of Reputation. Corporate Social Responsibility and Environmental Management, 7(23), 1–11. https://doi.org/10.1002/csr.2143
Ghozali, I. (2018). Analisis Multivariat dan Ekonometrika: Teori , Konsep dan Aplikasi dengan Eviews . Universitas Diponegoro.
Gonçalves, T., Gaio, C., & Ferro, A. (2021). Corporate Social Responsibility and Earnings Management: Moderating Impact of Economic Cycles and Financial Performance. Sustainability (Switzerland), 1(3), 1–14. https://doi.org/10.3390/su13179969
Haryanto, H. (2022). Implementasi Mekanisme Tata Kelola Perusahaan dalam Pelaksanaan Tanggung Jawab Social Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia Periode 2016-2020. Jurnal Mirai Manajemen, 7(1), 12–30. https://doi.org/10.37531/mirai.v6i2.1393
Harymawan, I., Agustia, D., Nasih, M., Inayati, A., & Nowland, J. (2020). Remuneration Committees, Executive Remuneration, and Firm Performance in Indonesia. Heliyon, 6(2), 1–11. https://doi.org/10.1016/j.heliyon.2020.e03452
Hidayat, R. R., Lestari, H. S., & Margaretha, F. (2022). Pengaruh Board Diversity, CEO Characteristics dan Board Committees Terhadap Firm Performance Perbankan Yang Terdaftar Di Bursa Efek Indonesia. Jurnal Ilmiah MEA (Manajemen, Ekonomi, Dan Akuntansi), 6(3), 88–110.
Kuo, T. C., Chen, H. M., & Meng, H. M. (2021). Do Corporate Social Responsibility Practices Improve Financial Performance? A Case Study of Airline Companies. Journal of Cleaner Production, 3(1), 1–13. https://doi.org/10.1016/j.jclepro.2021.127380
Kyere, M., & Ausloos, M. (2021). Corporate Governance and Firms Financial Performance in The United Kingdom. International Journal of Finance and Economics, 26(2), 1871–1885. https://doi.org/10.1002/ijfe.1883
Lee, Y. H., & Yang, L. T. Y. (2021). Corporate Social Responsibility and Financial Performance: A Case Study Based in Taiwan. Applied Economics, 53(23), 2661–2670. https://doi.org/10.1080/00036846.2020.1866158
Masitoh, N. S., & Hidayah, N. (2018). Pengaruh Penerapan Good Corporate Governance Terhadap Kinerja Perusahaan (Studi Empirik pada Perusahaan Perbankan di BEI Tahun 2014 –2016). Jurnal Tekun, 1(1), 49–69.
Matei, B. F., Boboc, C., & Ghita, S. (2021). The Relationship between Corporate Social Responsibility and Financial Performance in Romanian Companies. Economic Computation and Economic Cybernetics Studies and Research, 55(3), 297–314. https://doi.org/10.24818/18423264/55.3.21.19
Nzuki, J. M., & Opuodho, G. O. (2022). Influence of Corporate Social Responsibility on Financial Performance of Listed Manufacturing Firms in Kenya. International Journal of Finance, 7(4), 11–36. www.carijournals.org
Okafor, A., Adeleye, B. N., & Adusei, M. (2021). Corporate Social Responsibility and Financial Performance: Evidence from U.S Tech Firms. Journal of Cleaner Production, 29(2), 1–11. https://doi.org/10.1016/j.jclepro.2021.126078
Priyandani, M. S., & Rohman, A. (2019). Pengaruh Mekanisme Tata Kelola Perusahaan Terhadap Efisiensi Modal Intelektual. DIPONEGORO JOURNAL OF ACCOUNTING, 8(2), 1–15. http://ejournal-s1.undip.ac.id/index.php/accounting
Qadri, R. A., Cuandra, F., Darmawan, H., Junianto, & Rena. (2022). Analisis Strategi dan Penggunaan ERP Dalam Manajemen Rantai Pasokan Walmart. Bata Ilyas Educational Management Review, 2(1), 72–80.
Rahmi, Y. Y., & Sukma Wijaya, R. (2019). Pengaruh CSR Terhadap Nilai Perusahaan Dengan Kinerja Keuangan Sebagai Variabel Interverning Pada Perusahaan Pertambangan Yang Terdaftar Di Bursa Efek Indonesia (Bei) Tahun (2013-2017). Menara Ilmu, 13(3), 158–167. www.swa.co.id
Ramirez, J. B. B., Cortés, D. L., & Gómez-Betancourt, G. (2020). Ownership Governance Practices and Their Influence on Family Business Financial Performance. International Journal of Economics and Financial Issues, 10(2), 107–123. https://doi.org/10.32479/ijefi.9170
Ratajczak, P. (2021). The Mediating Role of Natural and Social Resources in The Corporate Social Responsibility—Corporate Financial Performance Relationship. Managerial and Decision Economics, 1(1), 1–20. https://doi.org/10.1002/mde.3216
Sharma, R. B., Sharma, A., Ali, S., & Dadhich, J. (2021). Corporate Social Responsibility and Financial Performance: Evidence from Manufacturing and Service Industry. Academic Journal of Interdisciplinary Studies, 10(3), 301–307. https://doi.org/10.36941/AJIS-2021-0085
Sindhutumo, A. D. M. (2018). Tanggung Jawab Sosial Perusahaan Multi Nasional: Studi Kasus Corporate Social Responsibility(CSR) Danone Aqua di Polanharjo Klaten Tahun 2012-2017. Jurnal Pendidikan Ekonomi, 1(1), 1–16.
Singh, K., Misra, M., & Yadav, J. (2021). Corporate Social Responsibility and Financial Inclusion: Evaluating the Moderating Effect of Income. Managerial and Decision Economics, 42(1), 1–12. https://doi.org/10.1002/mde.3306
Siregar, N. Y., & Safitri, T. A. (2019). Pengaruh Pengungkapan Enterprise Risk Management, Intellectual Capital, Corporate Social Responsibility, dan Sustainability Report Terhadap Nilai Perusahaan. Jurnal Bisnis Darmajaya, 05(02), 53–79.
Sisca, S., Abdurohim, D., Alfiana, A., Muniarty, P., Indriana, I., Suprapto, S., Mardhiah, M., Putra, A. R., Hartati, A., Pattinama, G. L. L., Fatira, M. A., & Bagenda, C. (2022). Corporate Social Responsibility Perusahaan. https://repository.penerbitwidina.com/publications/353742/corporate-social-responsibility-perusahaan
Syofyan, E. (2021). Good Corporate Governance. UNISMA PRESS. https://www.google.co.id/books/edition/GOOD_CORPORATE_GOVERNANCE_GCG/2n1dEAAAQBAJ?hl=en
Tania, K. S., & Hesniati, H. (2022). The Effect of Gender Diversity on Firm Performance in Indonesia. Jurnal Manajemen Strategi Dan Aplikasi Bisnis, 5(2), 267–284. https://doi.org/10.36407/jmsab.v5i2.667
Thuy, C. T. M., Khuong, N. V., Canh, N. T., & Liem, N. T. (2021). Corporate Social Responsibility Disclosure and Financial Performance: The Mediating Role of Financial Statement Comparability. Sustainability (Switzerland), 8(8), 1–14. https://doi.org/10.3390/su131810077
Tunio, R. A., Jamali, R. H., Mirani, A. A., Das, G., Laghari, M. A., & Xiao, J. (2020). The Relationship between Corporate Social Responsibility Disclosures and Financial Performance: A Mediating Role of Employee Productivity. Environmental Science and Pollution Research, 1(1), 1–17. https://doi.org/10.1007/s11356-020-11247-4
Uyar, A., Kuzey, C., Kilic, M., & Karaman, A. S. (2021). Board Structure, Financial Performance, Corporate Social Responsibility Performance, CSR Committee, and CEO Duality: Disentangling The Connection in Healthcare. Corporate Social Responsibility and Environmental Management, 25(24), 1–19. https://doi.org/10.1002/csr.2141
Zakaria, A. (2018). The Influence of the Audit Committee and the Remuneration Committee on Company Performance. KnE Social Sciences, 3(8), 18–32. https://doi.org/10.18502/kss.v3i8.2498
Zhou, G., Sun, Y., Luo, S., & Liao, J. (2021). Corporate Social Responsibility and Bank Financial Performance in China: The Moderating Role of Green Credit. Energy Economics, 14(19), 1–10. https://doi.org/10.1016/j.eneco.2021.105190
Benali, M., Jihad EL, Y., & MOUFDI, G. (2021). Impact of Corporate Social Responsibility on Financial Performance of Listed Moroccan Companies. International Journal of Financial Accountability, Economics, Management, and Auditing, 3(3), 132–144. https://doi.org/10.52502/ijfaema.v3i3.58
Chaudhry, N. I., Roomi, M. A., & Aftab, I. (2020). Impact of Expertise of Audit Committee Chair and Nomination Committee Chair on Financial Performance of Firm. Corporate Governance (Bingley), 20(4), 621–638. https://doi.org/10.1108/CG-01-2020-0017
Cherian, J., Umar, M., Thu, P. A., Nguyen-Trang, T., Sial, M. S., & Khuong, N. V. (2019). Does Corporate Social Responsibility Affect the Financial Performance of The Manufacturing Sector? Evidence from an Emerging Economy. Sustainability (Switzerland), 11(4), 1–14. https://doi.org/10.3390/su11041182
Cintya, Y. A. (2020). Komite Nominasi dan Remunerasi Di Perusahaan Indonesia Untuk Pelaksanaan Enterprise Risk Management (ERM) Yang Lebih Baik. Https://Crmsindonesia.Org/. https://crmsindonesia.org/publications/komite-nominasi-dan-remunerasi-di-perusahaan-indonesia-untuk-pelaksanaan-enterprise-risk-management-erm-yang-lebih-baik/
Darmawan. (2020). Dasar-dasar Memahami Rasio & Laporan Keuangan. https://www.google.co.id/books/edition/Dasar_dasar_Memahami_Rasio_dan_Laporan_K/oggREAAAQBAJ?hl=id&gbpv=1&dq=rasio+likuiditas+adalah&pg=PA59&printsec=frontcover
Dasgupta, A. (2022). Impact of Corporate Governance on Financial Performance of Select I.T. Firms in India. InternationalConference OnEconomics, Finance & Business, 2(1), 209–217. https://doi.org/10.19275/RSEPCONFERENCES169
Fourati, Y. M., & Dammak, M. (2021). Corporate Social Responsibility and Financial Performance: International Evidence of The Mediating Role of Reputation. Corporate Social Responsibility and Environmental Management, 7(23), 1–11. https://doi.org/10.1002/csr.2143
Ghozali, I. (2018). Analisis Multivariat dan Ekonometrika: Teori , Konsep dan Aplikasi dengan Eviews . Universitas Diponegoro.
Gonçalves, T., Gaio, C., & Ferro, A. (2021). Corporate Social Responsibility and Earnings Management: Moderating Impact of Economic Cycles and Financial Performance. Sustainability (Switzerland), 1(3), 1–14. https://doi.org/10.3390/su13179969
Haryanto, H. (2022). Implementasi Mekanisme Tata Kelola Perusahaan dalam Pelaksanaan Tanggung Jawab Social Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia Periode 2016-2020. Jurnal Mirai Manajemen, 7(1), 12–30. https://doi.org/10.37531/mirai.v6i2.1393
Harymawan, I., Agustia, D., Nasih, M., Inayati, A., & Nowland, J. (2020). Remuneration Committees, Executive Remuneration, and Firm Performance in Indonesia. Heliyon, 6(2), 1–11. https://doi.org/10.1016/j.heliyon.2020.e03452
Hidayat, R. R., Lestari, H. S., & Margaretha, F. (2022). Pengaruh Board Diversity, CEO Characteristics dan Board Committees Terhadap Firm Performance Perbankan Yang Terdaftar Di Bursa Efek Indonesia. Jurnal Ilmiah MEA (Manajemen, Ekonomi, Dan Akuntansi), 6(3), 88–110.
Kuo, T. C., Chen, H. M., & Meng, H. M. (2021). Do Corporate Social Responsibility Practices Improve Financial Performance? A Case Study of Airline Companies. Journal of Cleaner Production, 3(1), 1–13. https://doi.org/10.1016/j.jclepro.2021.127380
Kyere, M., & Ausloos, M. (2021). Corporate Governance and Firms Financial Performance in The United Kingdom. International Journal of Finance and Economics, 26(2), 1871–1885. https://doi.org/10.1002/ijfe.1883
Lee, Y. H., & Yang, L. T. Y. (2021). Corporate Social Responsibility and Financial Performance: A Case Study Based in Taiwan. Applied Economics, 53(23), 2661–2670. https://doi.org/10.1080/00036846.2020.1866158
Masitoh, N. S., & Hidayah, N. (2018). Pengaruh Penerapan Good Corporate Governance Terhadap Kinerja Perusahaan (Studi Empirik pada Perusahaan Perbankan di BEI Tahun 2014 –2016). Jurnal Tekun, 1(1), 49–69.
Matei, B. F., Boboc, C., & Ghita, S. (2021). The Relationship between Corporate Social Responsibility and Financial Performance in Romanian Companies. Economic Computation and Economic Cybernetics Studies and Research, 55(3), 297–314. https://doi.org/10.24818/18423264/55.3.21.19
Nzuki, J. M., & Opuodho, G. O. (2022). Influence of Corporate Social Responsibility on Financial Performance of Listed Manufacturing Firms in Kenya. International Journal of Finance, 7(4), 11–36. www.carijournals.org
Okafor, A., Adeleye, B. N., & Adusei, M. (2021). Corporate Social Responsibility and Financial Performance: Evidence from U.S Tech Firms. Journal of Cleaner Production, 29(2), 1–11. https://doi.org/10.1016/j.jclepro.2021.126078
Priyandani, M. S., & Rohman, A. (2019). Pengaruh Mekanisme Tata Kelola Perusahaan Terhadap Efisiensi Modal Intelektual. DIPONEGORO JOURNAL OF ACCOUNTING, 8(2), 1–15. http://ejournal-s1.undip.ac.id/index.php/accounting
Qadri, R. A., Cuandra, F., Darmawan, H., Junianto, & Rena. (2022). Analisis Strategi dan Penggunaan ERP Dalam Manajemen Rantai Pasokan Walmart. Bata Ilyas Educational Management Review, 2(1), 72–80.
Rahmi, Y. Y., & Sukma Wijaya, R. (2019). Pengaruh CSR Terhadap Nilai Perusahaan Dengan Kinerja Keuangan Sebagai Variabel Interverning Pada Perusahaan Pertambangan Yang Terdaftar Di Bursa Efek Indonesia (Bei) Tahun (2013-2017). Menara Ilmu, 13(3), 158–167. www.swa.co.id
Ramirez, J. B. B., Cortés, D. L., & Gómez-Betancourt, G. (2020). Ownership Governance Practices and Their Influence on Family Business Financial Performance. International Journal of Economics and Financial Issues, 10(2), 107–123. https://doi.org/10.32479/ijefi.9170
Ratajczak, P. (2021). The Mediating Role of Natural and Social Resources in The Corporate Social Responsibility—Corporate Financial Performance Relationship. Managerial and Decision Economics, 1(1), 1–20. https://doi.org/10.1002/mde.3216
Sharma, R. B., Sharma, A., Ali, S., & Dadhich, J. (2021). Corporate Social Responsibility and Financial Performance: Evidence from Manufacturing and Service Industry. Academic Journal of Interdisciplinary Studies, 10(3), 301–307. https://doi.org/10.36941/AJIS-2021-0085
Sindhutumo, A. D. M. (2018). Tanggung Jawab Sosial Perusahaan Multi Nasional: Studi Kasus Corporate Social Responsibility(CSR) Danone Aqua di Polanharjo Klaten Tahun 2012-2017. Jurnal Pendidikan Ekonomi, 1(1), 1–16.
Singh, K., Misra, M., & Yadav, J. (2021). Corporate Social Responsibility and Financial Inclusion: Evaluating the Moderating Effect of Income. Managerial and Decision Economics, 42(1), 1–12. https://doi.org/10.1002/mde.3306
Siregar, N. Y., & Safitri, T. A. (2019). Pengaruh Pengungkapan Enterprise Risk Management, Intellectual Capital, Corporate Social Responsibility, dan Sustainability Report Terhadap Nilai Perusahaan. Jurnal Bisnis Darmajaya, 05(02), 53–79.
Sisca, S., Abdurohim, D., Alfiana, A., Muniarty, P., Indriana, I., Suprapto, S., Mardhiah, M., Putra, A. R., Hartati, A., Pattinama, G. L. L., Fatira, M. A., & Bagenda, C. (2022). Corporate Social Responsibility Perusahaan. https://repository.penerbitwidina.com/publications/353742/corporate-social-responsibility-perusahaan
Syofyan, E. (2021). Good Corporate Governance. UNISMA PRESS. https://www.google.co.id/books/edition/GOOD_CORPORATE_GOVERNANCE_GCG/2n1dEAAAQBAJ?hl=en
Tania, K. S., & Hesniati, H. (2022). The Effect of Gender Diversity on Firm Performance in Indonesia. Jurnal Manajemen Strategi Dan Aplikasi Bisnis, 5(2), 267–284. https://doi.org/10.36407/jmsab.v5i2.667
Thuy, C. T. M., Khuong, N. V., Canh, N. T., & Liem, N. T. (2021). Corporate Social Responsibility Disclosure and Financial Performance: The Mediating Role of Financial Statement Comparability. Sustainability (Switzerland), 8(8), 1–14. https://doi.org/10.3390/su131810077
Tunio, R. A., Jamali, R. H., Mirani, A. A., Das, G., Laghari, M. A., & Xiao, J. (2020). The Relationship between Corporate Social Responsibility Disclosures and Financial Performance: A Mediating Role of Employee Productivity. Environmental Science and Pollution Research, 1(1), 1–17. https://doi.org/10.1007/s11356-020-11247-4
Uyar, A., Kuzey, C., Kilic, M., & Karaman, A. S. (2021). Board Structure, Financial Performance, Corporate Social Responsibility Performance, CSR Committee, and CEO Duality: Disentangling The Connection in Healthcare. Corporate Social Responsibility and Environmental Management, 25(24), 1–19. https://doi.org/10.1002/csr.2141
Zakaria, A. (2018). The Influence of the Audit Committee and the Remuneration Committee on Company Performance. KnE Social Sciences, 3(8), 18–32. https://doi.org/10.18502/kss.v3i8.2498
Zhou, G., Sun, Y., Luo, S., & Liao, J. (2021). Corporate Social Responsibility and Bank Financial Performance in China: The Moderating Role of Green Credit. Energy Economics, 14(19), 1–10. https://doi.org/10.1016/j.eneco.2021.105190