Corporate Governance and Sustainability Report in Indonesia: Systematic Literature Review Approach

Authors

  • Rochmawati Daud Accounting Department, Faculty of Economics, Universitas Sriwijaya
  • Inten Meutia Accounting Department, Faculty of Economics, Universitas Sriwijaya
  • Shelly F Kartasari Accounting Department, Faculty of Economics, Universitas Sriwijaya
  • Emylia Yuniarti Accounting Department, Faculty of Economics, Universitas Sriwijaya

DOI:

https://doi.org/10.26740/jaj.v14n2.p161-175

Keywords:

corporate governance, sustainability report, systematic literature review

Abstract

This study examines the literature on corporate governance with sustainability reports to respond to the subsequent questions: How is the development of corporate governance research integrated with sustainability reports in Indonesia, and what governance mechanisms affect sustainability reporting. This study uses a systematic literature review approach to answer the research problem. Using the keywords: sustainability reporting and sustainability report, 19 articles were found sourced from national accounting, economic and business journals in the SINTA 1 to SINTA 4 categories from 2016 to 2020. The amount of research in the accounting field about governance and sustainability reports is still minimal with mixed results, so sustainability report researchers need to conduct a broader and in-depth study. Further research opportunities can be directed by examining the role of governance in sustainability reports for the public sector. Research priorities can be directed toward Audit committee independence, Effectiveness of the Board of Commissioners, Family and Foreign ownership, and Stakeholder pressure

References

J., Parker, S., & Presley, T. J. (2012). Female Board Presence and the Likelihood of Financial Restatement. Accounting Horizons, 26(4), 607–629. https://doi.org/10.2308/acch-50249

Abbott, L. J., Parker, S., & Presley, T. J. (2012). Female Board Presence and the Likelihood of Financial Restatement. Accounting Horizons, 26(4), 607–629. https://doi.org/10.2308/acch-50249

Aggarwal, P., & Singh, A. K. (2019). CSR and sustainability reporting practices in India: an in-depth content analysis of top-listed companies. Social Responsibility Journal, 15(8), 1033–1053. https://doi.org/10.1108/SRJ-03-2018-0078

Alfaiz, D. R., & Aryati, T. (2019). Pengaruh Tekanan Stakeholder Dan Kinerja Keuangan Terhadap Kualitas Sustainability Report Dengan Komite Audit Sebagai Variabel Moderasi. Paper Knowledge . Toward a Media History of Documents, 2(2), 112–130.

Arayssi, M., Dah, M., & Jizi, M. (2016). Women on boards, sustainability reporting and firm performance. Sustainability Accounting, Management and Policy Journal. https://doi.org/10.1108/SAMPJ-07-2015-0055

Azzari, V., Mainardes, E. W., & Costa, F. M. da. (2020). Accounting services quality: a systematic literature review and bibliometric analysis. Asian Journal of Accounting Research. https://doi.org/10.1108/AJAR-07-2020-0056

Baraibar-Diez, E., & D. Odriozola, M. (2019). CSR Committees and Their Effect on ESG Performance in UK, France, Germany, and Spain. Sustainability, 11(18), 5077. https://doi.org/10.3390/su11185077

Barkemeyer, R., Preuss, L., & Lee, L. (2015). Corporate reporting on corruption: An international comparison. Accounting Forum, 39(4), 349–365. https://doi.org/10.1016/j.accfor.2015.10.001

Bear, S., Rahman, N., & Post, C. (2010). The Impact of Board Diversity and Gender Composition on Corporate Social Responsibility and Firm Reputation. Journal of Business Ethics, 97(2), 207–221. https://doi.org/10.1007/s10551-010-0505-2

Beji, R., Yousfi, O., Loukil, N., & Omri, A. (2021). Board Diversity and Corporate Social Responsibility: Empirical Evidence from France. Journal of Business Ethics, 173(1), 133–155. https://doi.org/10.1007/s10551-020-04522-4

Belal, A. R., & Cooper, S. (2011). The absence of corporate social responsibility reporting in Bangladesh. Critical Perspectives on Accounting, 22(7), 654–667. https://doi.org/10.1016/j.cpa.2010.06.020

Bhatt, P. R., & Bhatt, R. R. (2017). Corporate governance and firm performance in Malaysia. Corporate Governance: The International Journal of Business in Society, 17(5), 896–912. https://doi.org/10.1108/CG-03-2016-0054

Calvo, N., & Calvo, F. (2018). Corporate social responsibility and multiple agency theory: A case study of internal stakeholder engagement. Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.1633

Dienes, D., Sassen, R., & Fischer, J. (2016). What are the drivers of sustainability reporting? A systematic review. Sustainability Accounting, Management and Policy Journal, 7(2), 154–189. https://doi.org/10.1108/SAMPJ-08-2014-0050

Diono, H., Jatmiko, T., & Prabowo, W. (2017). Analisis Pengaruh Mekanisme Corporate Governance, Profitalbilitas, Dan Ukuran Perusahaan Terhadap Tingkat Pengungkapan Sustainability Report. Diponegoro Journal of Accounting, 6(3), 615–624.

Donaldson, L., & Davis, J. H. (1991). Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. Australian Journal of Management, 16(1), 49–64. https://doi.org/10.1177/031289629101600103

Eisenhardt, K. M. (1989). Agency Theory: An Assessment and Review. Academy of Management Review. https://doi.org/10.5465/amr.1989.4279003

Elsayed, N., & Ammar, S. (2020). Sustainability governance and legitimisation processes: Gulf of Mexico oil spill. Sustainability Accounting, Management and Policy Journal. https://doi.org/10.1108/SAMPJ-09-2018-0242

Fama, E. F., & Jensen, M. C. (1983). Separation of Ownership and Control. Journal of Law and Economics, 26(2), 301–325.

Hahn, R., & Kühnen, M. (2013). Determinants of sustainability reporting: A review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production, 59, 5–21. https://doi.org/10.1016/j.jclepro.2013.07.005

Hamid, F. Z. A., & Othman, Z. (2019). Corporate Social Responsibility by Malaysian and Singapore Sustainable Index Companies. International Journal of Accounting and Financial Reporting, 9(2), 1. https://doi.org/10.5296/ijafr.v9i2.14665

Herawaty, V., Lambintara, N., & Daeli, F. (2021). Peran Profitabilitas Atas Pengaruh Board Governance Terhadap Sustainability Report Quality. Media Riset Akuntansi, Auditing & Informasi, 21(1), 115. https://doi.org/10.25105/mraai.v21i1.9209

Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of Management. https://doi.org/10.1177/0149206309343469

Hsu, S., Lin, S.-W., Chen, W.-P., & Huang, J.-W. (2021). CEO duality, information costs, and firm performance. The North American Journal of Economics and Finance, 55, 101011. https://doi.org/10.1016/j.najef.2019.101011

Iqbal, Q., Hassan, S. H., Akhtar, S., & Khan, S. (2018). Employee’s Employee's green behavior for environmental sustainability: a case of banking sector in Pakistan. World Journal of Science, Technology and Sustainable Development. https://doi.org/10.1108/wjstsd-08-2017-0025

Ismail, A. M., & Latiff, I. H. M. (2019). Board Diversity and Corporate Sustainability Practices: Evidence on Environmental, Social and Governance (ESG) Reporting. International Journal of Financial Research, 10(3), 31. https://doi.org/10.5430/ijfr.v10n3p31

Jamil, A., Mohd Ghazali, N. A., & Puat Nelson, S. (2021). The influence of corporate governance structure on sustainability reporting in Malaysia. Social Responsibility Journal, 17(8), 1251–1278. https://doi.org/10.1108/SRJ-08-2020-0310

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Kang, H., Cheng, M., & Gray, S. J. (2007). Corporate governance and board composition: Diversity and independence of Australian boards. Corporate Governance: An International Review. https://doi.org/10.1111/j.1467-8683.2007.00554.x

Katmon, N., Mohamad, Z. Z., Norwani, N. M., & Farooque, O. Al. (2019). Comprehensive Board Diversity and Quality of Corporate Social Responsibility Disclosure: Evidence from an Emerging Market. Journal of Business Ethics, 157(2), 447–481. https://doi.org/10.1007/s10551-017-3672-6

Keiner, M. (2006). The Future of Sustainability. (M. Keiner, Ed.), The Future of Sustainability. Dordrecht: Springer Netherlands. https://doi.org/10.1007/1-4020-4908-0

Kim, O., Kuang, Y. F., & Qin, B. (2020). Female representation on boards and CEO performance‐induced turnover: Evidence from Russia. Corporate Governance: An International Review, 28(3), 235–260. https://doi.org/10.1111/corg.12316

Kocmanová, A., & Šimberová, I. (2014). DETERMINATION OF ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE INDICATORS: FRAMEWORK IN THE MEASUREMENT OF SUSTAINABLE PERFORMANCE. Journal of Business Economics and Management, 15(5), 1017–1033. https://doi.org/10.3846/16111699.2013.791637

Landrum, N. E., & Ohsowski, B. (2018). Identifying Worldviews on Corporate Sustainability: A Content Analysis of Corporate Sustainability Reports. Business Strategy and the Environment, 27(1), 128–151. https://doi.org/10.1002/bse.1989

Laskar, N., & Gopal Maji, S. (2018). Disclosure of corporate sustainability performance and firm performance in Asia. Asian Review of Accounting, 26(4), 414–443. https://doi.org/10.1108/ARA-02-2017-0029

Lucchini, A., & Moisello, A. M. (2019). Stakeholders’ Stakeholders' Pressure and CSR Engagement. A Case in the Apparel Sector. American Journal of Industrial and Business Management, 09(01), 169–190. https://doi.org/10.4236/ajibm.2019.91012

Lucia, L., & Panggabean, R. R. (2018). The Effect of Firm’s Firm's Characteristic and Corporate Governance. Social Economics and Ecology International Journal, 2(1), 18–28.

Madona, M. A., & Khafid, M. (2020). Pengaruh Good Corporate Governance terhadap Pengungkapan Sustainability Report dengan Ukuran Perusahaan sebagai Pemoderasi. Jurnal Optimasi Sistem Industri, 19(1), 22. https://doi.org/10.25077/josi.v19.n1.p22-32.2020

Manetti, G., Bellucci, M., & Oliva, S. (2021). Unpacking dialogic accounting: a systematic literature review and research agenda. Accounting, Auditing & Accountability Journal. https://doi.org/10.1108/aaaj-08-2020-4736

Mashayekhi, B. (2019). A Survey on Corporate Sustainability Reporting: The Case of Iran. Journal of Finance and Accounting, 7(3), 76. https://doi.org/10.11648/j.jfa.20190703.12

Massaro, M., Dumay, J., & Guthrie, J. (2016). On the shoulders of giants: undertaking a structured literature review in accounting. Accounting, Auditing & Accountability Journal, 29(5), 767–801. https://doi.org/10.1108/AAAJ-01-2015-1939

Meutia, I., Yaacob, Z., & F. Kartasari, S. (2021). Sustainability reporting: An overview of the recent development. Accounting and Financial Control, 3(1), 23–39. https://doi.org/10.21511/afc.03(1).2020.03

Mnif, Y., & Cherif, I. (2020). Female board directorship and earnings management. Pacific Accounting Review. https://doi.org/10.1108/PAR-04-2020-0049

O. Augustine, Okolie, & A. Collins, I. (2020). Sustainability Reporting and Financial Performance of Deposit Money Banks in Nigeria. International Business & Economics Studies, 2(2), p68. https://doi.org/10.22158/ibes.v2n2p68

Önder, Ş., & Baimurzin, R. (2020). Effect of Corporate Governance on Sustainability Disclosures: Evidence from Turkey. Indonesian Journal of Sustainability Accounting and Management, 4(1), 93. https://doi.org/10.28992/ijsam.v4i1.207

Ong, T., & Djajadikerta, H. G. (2018). Corporate governance and sustainability reporting in the Australian resources industry: an empirical analysis. Social Responsibility Journal, 16(1), 1–14. https://doi.org/10.1108/SRJ-06-2018-0135

Pandey, R., Biswas, P. K., Ali, M. J., & Mansi, M. (2020). Female directors on the board Board and cost of debt: evidence from Australia. Accounting & Finance, 60(4), 4031–4060. https://doi.org/10.1111/acfi.12521

Rahim, A. (2019). Governance and Good Governance-A Conceptual Perspective. Journal of Public Administration and Governance, 9(3), 133. https://doi.org/10.5296/jpag.v9i3.15417

Ramon-Llorens, M. C., Garcia-Meca, E., & Pucheta-Martínez, M. C. (2021). Female directors on boards. The impact of faultlines on CSR reporting. Sustainability Accounting, Management and Policy Journal, 12(1), 156–183. https://doi.org/10.1108/SAMPJ-07-2019-0273

Rhee, Y. P., Park, C., & Petersen, B. (2021). The Effect of Local Stakeholder Pressures on Responsive and Strategic CSR Activities. Business & Society, 60(3), 582–613. https://doi.org/10.1177/0007650318816454

Rudyanto, A., & Veronica Siregar, S. (2018). The effect of stakeholder pressure and corporate governance on the sustainability report quality. International Journal of Ethics and Systems, 34(2), 233–249. https://doi.org/10.1108/IJOES-05-2017-0071

Safitri, M., & Saifudin. (2019). Implikasi Karakteristik Perusahaan dan Good Corporate Governance Terhadap Pengungkapan Sustainability Report. Jurnal Bingkai Ekonomi, 4(1), 13–25. Retrieved from http://itbsemarang.ac.id/jbe/index.php/jbe33/article/view/91

Sawani, Y., Mohamed Zain, M., & Darus, F. (2010). Preliminary insights on sustainability reporting and assurance practices in Malaysia. Social Responsibility Journal, 6(4), 627–645. https://doi.org/10.1108/17471111011083482

SeTin, S., Debbianita, D., & Hidayat, V. S. (2016). The topics of accounting research (2011-2015) in Indonesia and the agenda of accounting research topics in the future. International Journal of Applied Business and Economic Research, 14(14), 29–50.

Shen, H., Ng, A. W., Zhang, J., & Wang, L. (2020). Sustainability accounting, management and policy in China: recent developments and future avenues. Sustainability Accounting, Management and Policy Journal, 11(5), 825–839. https://doi.org/10.1108/SAMPJ-03-2020-0077

Sinaga, K. J. (2017). The Effect of Profitability, Activity Analysis, Industrial Type and Good Corporate Governance Mechanism on The Disclosure of Sustainability Report. Accounting Analysis Journal, 6(3), 347–358. https://doi.org/10.15294/aaj.v6i3.18690

Sonia, D., & Khafid, M. (2020). The Effect of Liquidity, Leverage, and Audit Committee on Sustainability Report Disclosure with Profitability as a Mediating Variable. Accounting Analysis Journal, 9(2), 95–102. https://doi.org/10.15294/aaj.v9i2.31060

Srinidhi, B., Sun, Y., Zhang, H., & Chen, S. (2020). How do female directors improve board governance? A mechanism based on norm changes. Journal of Contemporary Accounting and Economics. https://doi.org/10.1016/j.jcae.2019.100181

Tangke, P., & Habbe, A. H. (2017). PENGARUH ASSET SPESIFIK DAN KEPEMILIKAN ASING TERHADAP CORPORATE SUSTAINABILITY DENGAN MEDIASI CORPORATE GOVERNANCE. JRAK, 8(1), 42–59.

Tommasetti, A., Mussari, R., Maione, G., & Sorrentino, D. (2020). Sustainability accounting and reporting in the public sector: Towards public value co-creation? Sustainability (Switzerland). https://doi.org/10.3390/su12051909

Triwacananingrum, W. (2018). Interactive Control System Analysis On Corporate Sustainability Performance : Good Corporate Governance as Mediating Variable. AKRUAL: Jurnal Akuntansi, 10(1), 47. https://doi.org/10.26740/jaj.v10n1.p47-56

Uyar, A., Karmani, M., Kuzey, C., Kilic, M., & Yaacoub, C. (2021). Does governance quality explain the sustainability reporting tendency of the public sector? Worldwide evidence. International Journal of Public Administration. https://doi.org/10.1080/01900692.2021.1900243

Vig, S., & Datta, M. (2021). The impact of corporate governance on sustainable value creation: A case of selected Indian firms. Journal of Sustainable Finance and Investment. https://doi.org/10.1080/20430795.2021.1923337

Visser, W. (2007). Corporate sustainability and the individual: A literature review. Cambridge Programme for Sustainability Leadership Paper Series.

Yu, Y., & Choi, Y. (2016). Stakeholder pressure and CSR adoption: The mediating role of organizational culture for Chinese companies. The Social Science Journal, 53(2), 226–234. https://doi.org/10.1016/j.soscij.2014.07.006

Zolotoy, L., O’SullivanO'Sullivan, D., Martin, G. P., & Wiseman, R. M. (2021). Stakeholder Agency Relationships: CEO Stock Options and Corporate Tax Avoidance. Journal of Management Studies, 58(3), 782–814. https://doi.org/10.1111/joms.12623

Downloads

Published

2023-04-02

How to Cite

Daud, R., Meutia, I., Kartasari, S. F., & Yuniarti, E. . (2023). Corporate Governance and Sustainability Report in Indonesia: Systematic Literature Review Approach. AKRUAL: Jurnal Akuntansi, 14(2), 161–175. https://doi.org/10.26740/jaj.v14n2.p161-175

Issue

Vol. 14 No. 2 (2023): AKRUAL: Jurnal Akuntansi

Section

Articles

License

Copyright (c) 2023 Rochmawati Daud, Inten Meutia, Shelly F Kartasari, Emylia Yuniarti

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.

 

Abstract views: 946 , PDF Downloads: 1128