The Green Mandate's Metrics: Examining the Influence of Political Connections, Financial Factors, and State Owned-Enterprise on Green Board Committee

Putri Amallia Hartono, Ahmad Juanda

Abstract


Objective –This study aims to examine the relationship between Political Connection, Size, Leverage, ROA, State Owned-Enterprise, and Green Board Committee.

Design/Methodology –This study uses a quantitative-associative method, using descriptive tests, T-tests, and multiple linear regression robustness test. The population includes all companies listed on the IDX with an ESG score in 2023. Samples are selected via purposive sampling, primarily requiring an ESG score from ESG Risk and data from Annual Report and Sustainability Reports.

Results –Financial factors play an important role in influencing the Green Board Committee because financial resources are an important aspect of company operations, increasing reputation, and gaining trust from stakeholders. On the other hand, non-financial variables, namely Political Connection and State-Owned-Enterprise, do not have implications for the Green Board Committee because each type of business entity, namely BUMN or Non-BUMN, will practically implement policies based on sustainability aspects to increase the company's competitive advantage and is not influenced by political solid dynamics.

Novelty/Originality –The implications of this research emphasize the viewpoint of Resource Dependence Theory and Institutional Theory that the role of liaison between the company and the external environment is essential to obtain resources and active participation in increasing competitiveness and market competition. This relates to the company's efforts to disclose sustainability to obtain assessments from stakeholders. The novelty of the research is that analyzing new measurements of the Green Board Committee variable by adopting a more comprehensive approach by combining several theoretical perspectives.

Keywords


financial factors; green board committee; political connection; state owned-enterprise

Full Text:

PDF

References


Abdhilla, I. R., & Hwihanus, H. (2023). Pengaruh fundamental makro, kinerja keuangan, struktur kepemilikan, dan pertumbuhan perusahaan terhadap nilai perusahaan: studi pada perusahaan BUMN di Indonesia yang terdaftar pada Bursa Efek Indonesia. Digital Bisnis: Jurnal Publikasi Ilmu Manajemen dan E-Commerce, 2(4), 410-423. doi:https://doi.org/10.30640/digital.v2i4.2049

Aldhamari, R. M. N., Mohamad Naimi Boudiab, Mourad Mas' ud, Abdulsalam (2020). The impact of political connection and risk committee on corporate financial performance: evidence from financial firms in Malaysia. The international journal of business in society, 20(7), 1281-1305. doi:https://doi.org/10.1108/CG-04-2020-0122

Alpaslan, C. M., Green, S. E., Mitroff, I. (2009). Corporate governance in the context of crises: Towards a stakeholder theory of crisis management. 17(1), 38-49.

Amenta, E., Ramsey, K. (2010). Institutional theory. 15-39.

Antara Putri, R., Ni Made Dwi, Ni Gusti Putu (2020). Effect of firm size, leverage, and environmental performance on sustainability reporting. American Journal of Humanities Social Sciences Research, 4(1), 40-46.

Asroi, M. (2015). Implementasi Undang-Undang Nomor 21 Tahun 2011 Tentang Otoritas Jasa Keuangan Terhadap Pengaturan dan Pengawasan Lembaga Perbankan (Studi Analisis di Bank Syari’ah Mandiri Cabang Salatiga). IAIN Salatiga

Bayraktaroglu, A. E., Calisir, F., & Baskak, M. (2019). Intellectual capital and firm performance: an extended VAIC model. journal of intellectual capital, 20(3), 406-425. doi:https://doi.org/10.1108/JIC-12-2017-0184

Bhuiyan, F., Rana, T., Baird, K., Munir, R. (2023). Strategic outcome of competitive advantage from corporate sustainability practices: Institutional theory perspective from an emerging economy. 32(7), 4217-4243.

Biermann, R., & Harsch, M. (2017). Resource dependence theory. 135-155.

Bosi, M. K., Lajuni, N., Wellfren, A. C., & Lim, T. S. (2022). Sustainability Reporting through Environmental, Social, and Governance: A Bibliometric Review. Sustainability (Switzerland), 14(19). doi:https://doi.org/10.3390/su141912071

Budi, A. (2012). Political cost and BUMN. In: Jakarta, Indonesia: UI Press.

Cahyandito, F. (2014). Pembangunan berkelanjutan, ekonomi dan ekologi, sustainability communication dan sustainability reporting: SSRN.

Chandra, J. A. C., Rian Sacipto, & Muktiono, M. (2022). Analisis Peranan Pemerintah Terhadap Praktik Greenwashing Dalam Strategi Investasi Keuangan Berkelanjutan Berbasis ESG. Jurnal Panorama Hukum, 7(2) 138-146. doi:https://doi.org/10.21067/jph.v7i2.7584

Chang, C.-L., Hsu, H.-K., & McAleer, M. (2013). Is small beautiful? Size effects of volatility spillovers for firm performance and exchange rates in tourism. The North American Journal of Economics Finance, 26, 519-534. doi:https://doi.org/10.1016/j.najef.2013.02.019

Chang, K., Ding, J., Lou, Q., Li, Z., & Yang, J. (2021). The impact of capital leverage on green firms’ investment: New evidence regarding the size and age effects of Chinese green industries. Finance Research Letters, 38, 101529. doi:https://doi.org/10.1016/j.frl.2020.101529

Cordeiro, J. J., Profumo, G., & Tutore, I. J. B. S. (2020). Board gender diversity and corporate environmental performance: The moderating role of family and dual‐class majority ownership structures. Business Strategy the Environment, 29(3), 1127-1144. doi:https://doi.org/10.1002/bse.2421

Daugaard, D., & Ding, A. (2022). Global drivers for ESG performance: The body of knowledge. Sustainability, 14(4), 2322. doi:https://doi.org/10.3390/su14042322

Daun, I. N., & Saputra, W. A. (2023). Pengaruh Penghindaran Pajak, Investasi Berlebih Dan Leverage Terhadap Kualitas Laporan Keuangan Perusahaan. Cakrawala Repositori IMWI, 6(3), 246-264. doi:https://doi.org/10.52851/cakrawala.v6i3.355

Drees, J. M., & Heugens, P. P. (2013). Synthesizing and extending resource dependence theory: A meta-analysis. Journal of management, 39(6), 1666-1698. doi:https://doi.org/10.1177/0149206312471391

Driss, H., Drobetz, W., El Ghoul, S., & Guedhami, O. (2024). The Sustainability committee and environmental disclosure: International evidence. . Journal of Economic Behavior & Organization, 221, 602–625. doi:https://doi.org/10.1016/j.jebo.2024.02.019

Efriyanti, F., Anggraini, R., & Fiscal, Y. (2012). Analisis Kinerja Keuangan Sebagai Dasar Investor Dalam Menanamkan Modal Pada PT. Bukit Asam, TBK (Study Kasus pada PT. Bukit Asam, TBK). Jurnal Akuntansi Dan Keuangan Universitas Bandar Lampung, 3(2), 94089. doi:https://doi.org/10.36448/jak.v3i2.236

Ferrão, J., Gama, Ana Paula (2016). Low-leverage policy dynamics: an empirical analysis. Review of Accounting Finance, 15(4), 463-483. doi:https://doi.org/10.1108/RAF-09-2015-0135

Fontaine, C., Haarman, A., & Schmid, S. J. E. e. (2006). The stakeholder theory. 1(4), 1-33.

Grob, S., & Benn, S. (2014). Conceptualising the adoption of sustainable procurement: an institutional theory perspective. 21(1), 11-21.

Hillebrand, B., Nijholt, J. J., & Nijssen, E. (2011). Exploring CRM effectiveness: an institutional theory perspective. 39, 592-608.

Hu, Y., Cheng, H., & Li, H. (2024). Political connections and corporate ESG performance. Sustainable Economies, 2(2), 93-93. doi:https://doi.org/10.62617/se.v2i2.93

Hussan, J. (2016). Impact of Leverage on Risk of the Companies. Journal of Civil Legal Sciences, 5(4), 2169-0170.1000200. doi:https://doi.org/10.4172/2169-0170.1000200

Indarti, M. K., & Extaliyus, L. (2013). Pengaruh Corporate Gorvernance Preception Index (CGPI), struktur kepemilikan, dan ukuran perusahaan terhadap kinerja keuangan. Jurnal Bisnis dan Ekonomi, 20(2).

Jasman, J., Wijayanti, I., Mawardi, R., & Wibisono, O. (2023). The Effect of Board Size, Board Independence, Board Diversity and CSR Committee on Sustainability Reporting. Journal of Economics, Finance and Management Studies, 6(11), 5705–5711. doi:https://doi.org/10.47191/jefms/v6-i11-51

Jaya-group, A. N. (2023). PUGKI Book 2021 The Indonesian General Guidelines for Corporate Governance 2021.

Kalbuana, N. P., Budi Asih, Pribadi Arnas, Yenni Simbolon, Suse Lamtiar Abdusshomad, Alwazir Kurnianto, Benny Saputro, Riyanto Sari, Maylia Pramono Zandra, Rosy Aprieza Puspita (2021). Earnings management is affected by firm size, leverage and roa: Evidence from Indonesia. Academy of Strategic Management Journal, 20, 1-12. doi:https://doi.org/1544-1458-20-S2-65

Kartika, S., & Utami, W. (2019). Effect of corporate governance mechanisms on financial performance and firm value with green accounting disclosure as moderating variables. Research Journal of Finance Accounting, 10(24), 150-158. doi:https://doi.org/10.7176/RJFA/10-24-16

Li, T.-T., Wang, K., Sueyoshi, T., & Wang, D. D. J. S. (2021). ESG: Research progress and future prospects. 13(21), 11663. doi:https://doi.org/10.3390/su132111663

Liang, P. J., Rajan, M. V., & Ray, K. (2008). Optimal team size and monitoring in organizations. The Accounting Review, 83(3), 789-822. doi:https://doi.org/10.2139/ssrn.965950

Lin, W.-L., Cheah, J.-H., Azali, M., Ho, J. A., & Yip, N. (2019). Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector. Journal of Cleaner Production, 229, 974-988. doi:https://doi.org/10.1016/j.jclepro.2019.04.214

Liu, M., Lu, J., Liu, Q., Wang, H., Yang, Y., & Fang, S. (2024). The impact of executive cognitive characteristics on a firm’s ESG performance: An institutional theory perspective. Journal of management governance, 1-29. doi:https://doi.org/10.1007/s10997-024-09695-y

Machmuddah, Z., & Wardhani, R. (2020). Environmental Social Governance (ESG) Disclosure Score Rating of Bloomberg. Paper presented at the 1st International Conference on Science, Health, Economics, Education and Technology (ICoSHEET 2019).

Mahajan, R., Lim, W. M., Sareen, M., Kumar, S., & Panwar, R. (2023). Stakeholder theory. 166, 114104.

Mahmood, Z., Kouser, R., Ali, W., Ahmad, Z., & Salman, T. (2018). Does corporate governance affect sustainability disclosure? A mixed methods study. Sustainability10(1), 207. doi:https://doi.org/10.3390/su10010207

Matsiliza, N. (2017). Corporate Governance Of The State-Owned Enterprise in An Emerging Country: Risk Management and Related Issues Risk Governance Control: Financial Markets Institutions 7(3). doi:https://doi.org/10.22495/rgcv7i3p4

Menicucci, E., & Paolucci, G. (2022). Board Diversity and ESG Performance: Evidence from the Italian Banking Sector. . Sustainability (Switzerland), 14(20). doi:https://doi.org/10.3390/su142013447

Muslih, M. (2019). The Committee Of Audit Role On The State-Owned Enterprises (BUMN) Performance Of Indonesia Registered On The Stock Exchange Of Indonesia. International Journal Of Contemporary Accounting, 1.

Nadeem, M., Gan, C., & Nguyen, C. (2018). The importance of intellectual capital for firm performance: Evidence from Australia. Australian Accounting Review, 28(3), 334-344. doi:https://doi.org/10.1111/auar.12184

Nana Yaw Simpson, S. (2014). Boards and governance of state-owned enterprises. Corporate Governance, 14(2), 238-251. doi:https://doi.org/10.1787/9789264200425-en

Nasution, N. A., & Sari, W. (2020). Pengaruh ukuran perusahaan (firm size) dan profitabilitas terhadap harga saham pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia (BEI). Jurnal Akuntansi Bisnis dan Publik, 11(1), 76-83.

Nawangsari, L. C., & Elmi, F. (2017). Framework Sustainability Strategy Sumber Daya Manusia. Prosiding SENIATI, 3(2), C30. 31-35. doi:https://doi.org/10.36040/seniati.v3i2.1840

Ng, D., Khodakarami, N. (2022). Fitting in as an outsider: a resource dependence theory approach to outside boards. 36(2), 178-196.

Nugraha, Y. B., & Nursasi, E. (2022). Analisis Pengaruh Leverage, Likuiditas, Profitabilitas Dan Keputusan Investasi Terhadap Nilai Perusahaan. Jurnal Manajemen Dirgantara, 15(1), 174-183. doi:https://doi.org/10.56521/manajemen-dirgantara.v15i1.592

Pigé, B. (2002). Stakeholder theory and corporate governance: the nature of the board information. 7(1), 1-17.

Pratama, A. B., & Susilowati, E. (2024). Optimalisasi Pengelolaan Arus Kas untuk Meminimalisir Beban Keuangan Perusahaan. Economic Business Management International Journal, 6(2), 175-180. doi:https://doi.org/10.556442/eabmij.v6i2.769

Prihandono, I., & Yuniarti, D. S. (2023). Indonesia Sustainability Reporting Standard: What Needs to be Improved? . Padjadjaran Journal of International Law, 7(1), 1-23. doi:https://doi.org/10.23920/pjil.v7i1.1159

Rachmawati, D., & Pinem, D. B. (2015). Pengaruh profitabilitas, leverage dan ukuran perusahaan terhadap nilai perusahaan. Jurnal Equity, 18(1), 1-18. doi:https://doi.org/10.34209/equ.v18i1.456

Rizad, M. F. A., & Juanda, A. (2024). Can The Green Board Committee Mitigate ESG Risk? AFRE Accounting and Financial Review. doi:https://doi.org/10.26905/afr.v7i3.14062

Rofelawaty, B. (2014). Analisis praktik pelaporan berkelanjutan (sustainability reporting) pada perusahaan yang terdaftar di bursa efek Indonesia. Jurnal Aplikasi Manajemen, 12(2), 258-268.

Ruiz Lozano, M., et al. (2022). The disclosure of the materiality process in sustainability reporting by Spanish state-owned enterprises. Accounting, Auditing Accountability Journal, 35(2), 385-412. doi:https://doi.org/10.1108/AAAJ-08-2018-3629

Sa’ad, S., Huda, M. I. M., & Rahim, S. S. I. (2023). Political Influence in General Border Committee (GBC) Malaysia-Indonesia (Malindo) Effectiveness: Analysis on Malaysia-Indonesia Land Border Management. American J Sci Edu Re: AJSER-142. doi:https://doi.org/10.47991/2835-6764/AJSER-142

Sari, R., & Witjaksono, A. (2021). The effect of enterprise risk management, firm size, profitability, and leverage on firm value. EAJ Vol, 4. doi:https://doi.org/10.32493/eaj.v4i1.y2021.p71-81

Shah, S. Q. A., Lai, F.-W., Shad, M. K., Konečná, Z., Goni, F. A., Chofreh, A. G., & Klemeš, J. J. (2021). The inclusion of intellectual capital into the green board committee to enhance firm performance. Sustainability, 13(19), 10849. doi:https://doi.org/10.3390/su131910849

Singla, H. K. (2020). Does VAIC affect the profitability and value of real estate and infrastructure firms in India? A panel data investigation. journal of intellectual capital, 21(3), 309-331. doi:https://doi.org/10.1108/JIC-03-2019-0053

Sugiarto, A., Puspani, N. N., & Fathia, F. (2023). ESG Leverage towards Stock Performance in Indonesia Stock Exchange. . International Journal of Energy Economics and Policy, 13(5), 593–606. . doi:https://doi.org/10.32479/ijeep.14384

Tina Dacin, M., Goodstein, J., & Richard Scott, W. (2002). Institutional theory and institutional change: Introduction to the special research forum. 45(1), 45-56.

Utoyo, B., Marimin, I. F., & Murdanoto, A. P. (2019). Improving Performance of Indonesia State-Owned Enterprises Holding; Policies and Strategies. Asian Journal of Applied Sciences, 7(5). doi:https://doi.org/10.24203/ajas.v7i5.5976

Van Raaij, E. M. (2005). The strategic value of customer profitability analysis. Marketing Intelligence Planning, 23(4), 372-381. doi:https://doi.org/10.1108/02634500510603474

Wibowo, A. J., & Erkaningrum, F. I. (2002). Studi Keterkaitan antara Dividend Payout Ratio, Financial Leverage, dan Investasi dalam Pengujian Hipotesis Pecking Order. Jurnal Ekonomi dan Bisnis Indonesia, 17(4), 506-519. doi:https://doi.org/10.22146/jieb.6818

Winarso, E., & Salim, I. A. (2017). The Influence of risk management to the return on asset (ROA) banking sector (Case Study of Bank in Indonesia Listed in Indonesia Stock Exchange). Advances in economics business, 5(7), 382-393. doi:https://doi.org/10.13189/aeb.2017.050702

Xiaomei, Z., Sallehuddin, M. R., Saad, R. M., & Lu, Z. (2021). Gender diversity, political connections and environmental, social and governance performance in China: The moderating role of tenure. Studies of Applied Economics, 39(10). doi:https://doi.org/10.25115/eea.v39i10.5962

Yuspin, W., Fauzie, A., Putra, A. K., Liang, S., & Nor, M. Z. (2024). Green Banking for Environmental Management: A Sustainable Paradigm Shift. IOP Conference Series: Earth and Environmental Science,, 1357(1), 012017. . doi:https://doi.org/10.1088/17551315/1357/1/012017

Yusuf, M., & Fitriyani, A., Ardianto, Rian, Atep (2024). The Impact Of Using Tokopedia On Profitability And Consumer Service. Jurnal Darma Agung, 30(2), 559-573. doi:https://doi.org/10.46930/ojsuda.v30i2.2273




DOI: https://doi.org/10.24815/jaroe.v8i1.42237

Article Metrics

Abstract view : 90 times
PDF - 31 times

Refbacks

  • There are currently no refbacks.


Published by:

Department of Accounting
Faculty of Economics and Business
Universitas Syiah Kuala
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
E-ISSN: 2621-1041

 

Creative Commons License
Journal of Accounting Research, Organization and Economics by Department of Accounting Faculty of Economics and Business Universitas Syiah Kuala is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at https://jurnal.usk.ac.id/JAROE/index.