Increase transparency in CSR disclosure

Oct 13, 2025 by windailys.com 92 views

Effect of Good Corporate Governance and Disclosure of Corporate Social Responsibility on Corporate Value Through Financial Performance as a Mediation Variable in Oil Palm Plantation Companies Listed on the Indonesia Stock Exchange

Introduction

In today's business landscape, Good Corporate Governance (GCG) and Corporate Social Responsibility (CSR) have become essential elements in determining a company's value. GCG focuses on transparent and accountable management, while CSR includes corporate social responsibility for the community and the environment. This study aims to analyze the effect of disclosure of CSR and GCG on company value through financial performance as a mediation variable in oil palm plantation companies listed on the Indonesia Stock Exchange during the 2016-2020 period.

Methodology

This study employed a quantitative research method, using a purposive sampling method to select 11 oil palm plantation companies listed on the Indonesia Stock Exchange. The data obtained were analyzed using the path analysis approach with SPSS analysis tools. The study examined the effect of institutional ownership, audit committee, independent commissioner, and CSR disclosure on company value, as well as the mediating role of financial performance in the relationship between GCG and CSR disclosures and company value.

Results

The results of this study showed that institutional ownership had a negative effect on company value, indicating that investment decisions from institutional shareholders may not always be in line with the interests of the company. On the other hand, the audit committee, CSR disclosure, and financial performance had no significant effect on company value. However, independent commissioners showed a positive effect on company value, suggesting that the existence of individuals who are not directly involved in the company's operations can provide a more objective perspective, thereby increasing investor confidence.

Interestingly, institutional ownership had a positive influence on financial performance, although the audit committee, independent commissioner, and CSR disclosure did not show a significant effect on financial performance. This finding suggests that institutional ownership may play a crucial role in influencing financial performance, which in turn can affect company value.

Mediation Analysis

The results of the mediation test showed that financial performance could act as a mediation variable between CSR and GCG disclosures represented by the audit committee and institutional ownership of the company's value. However, financial performance did not function as a mediation variable in the relationship between GCG represented by an independent commissioner and company value.

Deeper Analysis

In the business context, GCG and CSR are increasingly important in determining company value. GCG focuses on transparent and accountable management, while CSR includes corporate social responsibility for the community and the environment. This research highlights the importance of these two elements in improving the company's image and competitiveness in the market.

Institutional ownership that has a negative influence on company value can be interpreted as an indication that investment decisions from institutional shareholders are not always in line with the interests of the company. This can be caused by various reasons, including short-term views that emphasize more on fast profits compared to sustainable growth.

The results of this study also show that although some GCG elements, such as the audit committee and CSR disclosure, have no direct influence on the company's value, it may indicate that efforts to apply these principles are still in the process and require time to have a positive impact.

Implications

This study provides several implications for oil palm plantation companies listed on the Indonesia Stock Exchange. Firstly, companies should increase transparency in CSR disclosure and strengthen GCG practices to achieve better company value. Secondly, companies should understand the dynamics of institutional ownership and how it influences their strategic decisions.

Finally, this research suggests that improving financial performance can be a strategic step to increase company value in the future. By focusing on financial performance, companies can create a positive impact on their value and competitiveness in the market.

Conclusion

In conclusion, this study provides insight into the effects of GCG and CSR on company value through financial performance as a mediation variable in oil palm plantation companies listed on the Indonesia Stock Exchange. The findings of this study highlight the importance of GCG and CSR in improving company value and competitiveness in the market. By understanding the dynamics of institutional ownership and the mediating role of financial performance, companies can create a positive impact on their value and competitiveness in the future.

Recommendations

Based on the findings of this study, the following recommendations are made:

Increase transparency in CSR disclosure: Companies should increase transparency in CSR disclosure to improve their image and competitiveness in the market.
Strengthen GCG practices: Companies should strengthen GCG practices to achieve better company value and competitiveness in the market.
Understand the dynamics of institutional ownership: Companies should understand the dynamics of institutional ownership and how it influences their strategic decisions.
Focus on improving financial performance: Companies should focus on improving financial performance as a strategic step to increase company value in the future.

By implementing these recommendations, oil palm plantation companies listed on the Indonesia Stock Exchange can create a positive impact on their value and competitiveness in the market.
Q&A: Effect of Good Corporate Governance and Disclosure of Corporate Social Responsibility on Corporate Value Through Financial Performance as a Mediation Variable in Oil Palm Plantation Companies Listed on the Indonesia Stock Exchange

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of disclosure of Corporate Social Responsibility (CSR) and Good Corporate Governance (GCG) on company value through financial performance as a mediation variable in oil palm plantation companies listed on the Indonesia Stock Exchange.

Q: What is the significance of this study?

A: This study is significant because it provides insight into the effects of GCG and CSR on company value through financial performance as a mediation variable in oil palm plantation companies listed on the Indonesia Stock Exchange. The findings of this study can help companies in the oil palm plantation sector to improve their governance and social responsibility practices, which can lead to better company value and competitiveness in the market.

Q: What are the key findings of this study?

A: The key findings of this study are:

Institutional ownership has a negative effect on company value.
The audit committee, CSR disclosure, and financial performance have no significant effect on company value.
Independent commissioners have a positive effect on company value.
Institutional ownership has a positive influence on financial performance.
Financial performance can act as a mediation variable between CSR and GCG disclosures represented by the audit committee and institutional ownership of the company's value.

Q: What are the implications of this study?

A: The implications of this study are:

Companies should increase transparency in CSR disclosure and strengthen GCG practices to achieve better company value.
Companies should understand the dynamics of institutional ownership and how it influences their strategic decisions.
Improving financial performance can be a strategic step to increase company value in the future.

Q: What are the limitations of this study?

A: The limitations of this study are:

The study only focuses on oil palm plantation companies listed on the Indonesia Stock Exchange.
The study only examines the effect of GCG and CSR on company value through financial performance as a mediation variable.
The study does not examine other factors that may influence company value.

Q: What are the recommendations of this study?

A: The recommendations of this study are:

Increase transparency in CSR disclosure.
Strengthen GCG practices.
Understand the dynamics of institutional ownership.
Focus on improving financial performance.

Q: What are the future research directions?

A: The future research directions are:

Examine the effect of GCG and CSR on company value through financial performance as a mediation variable in other industries.
Examine the effect of other factors on company value.
Examine the impact of GCG and CSR on company value in emerging markets.

Q: What are the practical implications of this study?

A: The practical implications of this study are:

Companies in the oil palm plantation sector can improve their governance and social responsibility practices to achieve better company value and competitiveness in the market.
Investors can make informed decisions about investing in oil palm plantation companies based on their GCG and CSR practices.
Regulators can develop policies and regulations that promote good governance and social responsibility practices in the oil palm plantation sector.