BOARD CHARACTERISTICS AND ENVIRONMENTAL PERFORMANCE : DOES OWNERSHIP MODERATE THE IMPACT?
Keywords:
environmental performance, board characteristics, managerial ownership, blockholder ownership
Abstract
The aim of this research is to examine the influence of ownership in moderating corporate governance on environmental performance. The analysis method employed is panel data regression and Moderated Regression Analysis on 52 companies in the energy sector listed on the Indonesia Stock Exchange during 2018-2022. Managerial ownership can strengthen the influence of board size and environmental committee on environmental performance positively and weaken board independence on environmental performance. Meanwhile, blockholder ownership reinforces the influence of board size on environmental performance. Managers play a role in enhancing the participation of boards and environmental committees in environmental practices. Blockholders from other fields need to improve their mastery of environmental practices. Originality of this research is diverse findings highlight the roles of managerial ownership and blockholder ownership in environmental performance, as well as the moderating role of ownership type in corporate governance on environmental performance. The findings of this research provide a new gap for academics to further examine the characteristics of blockholders.
References
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Diantimala, Y., & Amril, T. A. (2018). The Effect of Ownership Structure, Financial and Environmental Performances on Environmental Disclosure. Accounting Analysis Journal, 7(1), 70–77. https://doi.org/10.15294/aaj.v5i3.20019
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Gerged, A. M., Chijoke-Mgbame, A. M., Konadu, R., & Cowton, C. J. (2023). Does the presence of an environmental committee strengthen the impact of board gender diversity on corporate environmental disclosure? Evidence from sub-Saharan Africa. Business Strategy and the Environment, 32(4), 2434–2450. https://doi.org/10.1002/bse.3257
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Hart, S. L., & Hart, S. L. (2013). A Natural-Resource-Based View of the Firm. 20(4), 986–1014.
Hesniati, H., Ogawa, A. Y., Clarence, A., Topher, C., & Engelina, J. (2022). Pengaruh Inflation, Interest Rate, dan Exchange Rate terhadap IHSG di Bursa Efek Indonesia pada Tahun 2011-2021. Studi Ilmu Manajemen Dan Organisasi, 3(1), 261–271. https://doi.org/10.35912/simo.v3i1.1078
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Mappadang, A. (2021). Managerial Ownership, Leverage, Profitability, Corporate Value: An Interactive Effect In Indonesia Stock Exchange. Widyakala: Journal of Pembangunan Jaya University, 8(2), 54. https://doi.org/10.36262/widyakala.v8i2.443
Mayer, A. (2020). Social support for de-carbonizing the energy system: The role of expressive partisanship. Environmental Science and Policy, 109(August 2019), 83–94. https://doi.org/10.1016/j.envsci.2020.03.013
Mititean, P. (2023). Board attributes and social and environmental performance. Evidence from the energy sector. Journal of Accounting and Management Information Systems, 22(1), 130–146. https://doi.org/10.24818/jamis.2023.01007
Muhammad, H., & Migliori, S. (2022). Effects of board gender diversity and sustainability committees on environmental performance: A quantile regression approach. Journal of Management and Organization. https://doi.org/10.1017/jmo.2022.8
Nguyen, T. H. H., Elmagrhi, M. H., Ntim, C. G., & Wu, Y. (2021). Environmental performance, sustainability, governance and financial performance: Evidence from heavily polluting industries in China. Business Strategy and the Environment, 30(5), 2313–2331. https://doi.org/10.1002/bse.2748
Orazalin, N. S., Ntim, C. G., & Malagila, J. K. (2024). Board Sustainability Committees, Climate Change Initiatives, Carbon Performance, and Market Value. British Journal of Management, 35(1), 295–320. https://doi.org/10.1111/1467-8551.12715
Papadis, E., & Tsatsaronis, G. (2020). Challenges in the decarbonization of the energy sector. Energy, 205, 118025. https://doi.org/10.1016/j.energy.2020.118025
Rahmatika, D. N. (2021). Exploring The Relation Of Environmental Disclosure, Environmental Performance and Company Charagteristics In Indonesia: An Empirical Analysis. International Journal of Economics, Business and Accounting Research (IJEBAR), 5(4), 1331–1345.
Salsabila, N. A., Juliarto, H. K., Syawal, A. F., & Nohe, D. A. (2022). Analisis Regresi Data Panel pada Ketimpangan Pendapatan Daerah di Provinsi Kalimantan Timur. Prosiding Seminar Nasional Matematika, Statistika, Dan Aplikasinya, 2, 241–253.
Salsabila, S., & Santoso, U. (2021). Pengaruh Kepemilikan Saham Mayoritas Terhadap Kinerja Keuangan Perusahaan Farmasi (Studi Perusahaan Farmasi Yang Terdaftar Di Bei Tahun 2015-2019). Jurnal Administrasi Bisnis, 17(2), 129–158. https://doi.org/10.26593/jab.v17i2.5238.129-158
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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
Truong, T. H. D. (2024). Environmental, social and governance performance and firm value: does ownership concentration matter? Management Decision. https://doi.org/10.1108/MD-10-2023-1993
Wahyuningsih, I., & Meiranto, W. (2021). Pengaruh Good Corporate Governance dan Regulasi Pemerintah Terhadap Pengungkapan Informasi Akuntansi Lingkungan. Diponegoro Journal Of Accounting, 10(4), 1–12.
Wirantika, A. D., Pradita, D. R. S., & Sany. (2020). Pengaruh Asimetri Informasi, Female Director, Board Independence Terhadap Manajemen Laba pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Periode 2016-2020. 1182–1192.
Zulfikar, Z., Syahnur, S., & Majid, M. S. A. (2021). The Effect of Energy Consumption, Energy Resources, Economic Growth, and Road Infrastructure on Co2 Emissions in Indonesia. International Journal of Quantitative Research and Modeling, 2(3), 173–183. https://doi.org/10.46336/ijqrm.v2i3.173
Zulkarnaen, W., Fitriani, I., & Yuningsih, N. (2020). Pengembangan Supply Chain Management Dalam Pengelolaan Distribusi Logistik Pemilu Yang Lebih Tepat Jenis, Tepat Jumlah Dan Tepat Waktu Berbasis Human Resources Competency Development Di KPU Jawa Barat. Jurnal Ilmiah MEA (Manajemen, Ekonomi, & Akuntansi), 4(2), 222-243. https://doi.org/10.31955/mea.vol4.iss2.pp222-243.
Al Amosh, H., & Khatib, S. F. A. (2022). Ownership structure and environmental, social and governance performance disclosure: the moderating role of the board independence. Journal of Business and Socio-Economic Development, 2(1), 49–66. https://doi.org/10.1108/jbsed-07-2021-0094
Alan, H. R. D., & Jonathan, E. E. (2015). The Role of Board Environmental Committees in Corporate Environmental Performance. Journal of Business Ethics. https://doi.org/10.1007/s10551-015-2664-7
Ali, H. R., Mohammad, A. J., & Al-kake, F. R. A. (2021). The Impact Of Corporate Governance On Environmental Performance Of Public Listed Companies In Malaysia : A Robust Standard Error Approach. 18(March 2022), 605–623.
Alwadani, N., Al-Shaer, H., & Albitar, K. (2024). The impact of internal governance mechanisms on environmental performance of Saudi firms. International Journal of Accounting and Information Management, 32(1), 40–57. https://doi.org/10.1108/IJAIM-04-2023-0084
Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Cochran, J. J. (2014). Statiscis for Business Economics. 1–1204.
Arayssi, M., Jizi, M., & Tabaja, H. H. (2020). The impact of board composition on the level of ESG disclosures in GCC countries. Sustainability Accounting, Management and Policy Journal, 11(1), 137–161. https://doi.org/10.1108/SAMPJ-05-2018-0136
Baba, B. U., & Baba, U. A. (2021). The effect of ownership structure on social and environmental reporting in Nigeria: the moderating role of intellectual capital disclosure. Journal of Global Responsibility, 12(2), 210–244. https://doi.org/10.1108/JGR-06-2019-0060
Bosun-Fakunle, Y. F., Mary, J., & Gbenga, E. (2023). Effect of Corporate Governance on Environmental Performance: Empirical Evidence from Zimbabwe. American Journal of Industrial and Business Management, 13(03), 163–181. https://doi.org/10.4236/ajibm.2023.133012
Diantimala, Y., & Amril, T. A. (2018). The Effect of Ownership Structure, Financial and Environmental Performances on Environmental Disclosure. Accounting Analysis Journal, 7(1), 70–77. https://doi.org/10.15294/aaj.v5i3.20019
EPI. (2022). 2022 EPI Results. Enviromental Performance Index.
García Martín, C. J., & Herrero, B. (2020). Do board characteristics affect environmental performance? A study of EU firms. Corporate Social Responsibility and Environmental Management, 27(1), 74–94. https://doi.org/10.1002/csr.1775
Gerged, A. M., Chijoke-Mgbame, A. M., Konadu, R., & Cowton, C. J. (2023). Does the presence of an environmental committee strengthen the impact of board gender diversity on corporate environmental disclosure? Evidence from sub-Saharan Africa. Business Strategy and the Environment, 32(4), 2434–2450. https://doi.org/10.1002/bse.3257
Hart, S. L., & Dowell, G. (2011). A natural-resource-based view of the firm: Fifteen years after. Journal of Management, 37(5), 1464–1479. https://doi.org/10.1177/0149206310390219
Hart, S. L., & Hart, S. L. (2013). A Natural-Resource-Based View of the Firm. 20(4), 986–1014.
Hesniati, H., Ogawa, A. Y., Clarence, A., Topher, C., & Engelina, J. (2022). Pengaruh Inflation, Interest Rate, dan Exchange Rate terhadap IHSG di Bursa Efek Indonesia pada Tahun 2011-2021. Studi Ilmu Manajemen Dan Organisasi, 3(1), 261–271. https://doi.org/10.35912/simo.v3i1.1078
Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance. Journal of Business Ethics, 149(2), 411–432. https://doi.org/10.1007/s10551-016-3099-5
IEA. (2020). Gender diversity in energy: what we know and what we don’t know. International Energy Agency. https://www.iea.org/commentaries/gender-diversity-in-energy-what-we-know-and-what-we-dont-know
Indra Al Irsyad, M., Halog, A., Nepal, R., & Koesrindartoto, D. P. (2020). Economical and environmental impacts of decarbonisation of Indonesian power sector. Journal of Environmental Management, 259(November 2018), 109669. https://doi.org/10.1016/j.jenvman.2019.109669
Lembaga Internasional Trade Administration. (2024). International Trade Administration. Lembaga Internasional Trade Administration. https://www.trade.gov/country-commercial-guides/indonesia-energy
Manurung, D. T., Hardika, A. L., Hapsari, D. W., & Sebayang, M. M. (2019). The Role of Corporate Governance and Environmental Committees on Greenhouse Gas Disclosure. Journal of Environmental Management and Tourism, 9(7), 1403–1413.
Mappadang, A. (2021). Managerial Ownership, Leverage, Profitability, Corporate Value: An Interactive Effect In Indonesia Stock Exchange. Widyakala: Journal of Pembangunan Jaya University, 8(2), 54. https://doi.org/10.36262/widyakala.v8i2.443
Mayer, A. (2020). Social support for de-carbonizing the energy system: The role of expressive partisanship. Environmental Science and Policy, 109(August 2019), 83–94. https://doi.org/10.1016/j.envsci.2020.03.013
Mititean, P. (2023). Board attributes and social and environmental performance. Evidence from the energy sector. Journal of Accounting and Management Information Systems, 22(1), 130–146. https://doi.org/10.24818/jamis.2023.01007
Muhammad, H., & Migliori, S. (2022). Effects of board gender diversity and sustainability committees on environmental performance: A quantile regression approach. Journal of Management and Organization. https://doi.org/10.1017/jmo.2022.8
Nguyen, T. H. H., Elmagrhi, M. H., Ntim, C. G., & Wu, Y. (2021). Environmental performance, sustainability, governance and financial performance: Evidence from heavily polluting industries in China. Business Strategy and the Environment, 30(5), 2313–2331. https://doi.org/10.1002/bse.2748
Orazalin, N. S., Ntim, C. G., & Malagila, J. K. (2024). Board Sustainability Committees, Climate Change Initiatives, Carbon Performance, and Market Value. British Journal of Management, 35(1), 295–320. https://doi.org/10.1111/1467-8551.12715
Papadis, E., & Tsatsaronis, G. (2020). Challenges in the decarbonization of the energy sector. Energy, 205, 118025. https://doi.org/10.1016/j.energy.2020.118025
Rahmatika, D. N. (2021). Exploring The Relation Of Environmental Disclosure, Environmental Performance and Company Charagteristics In Indonesia: An Empirical Analysis. International Journal of Economics, Business and Accounting Research (IJEBAR), 5(4), 1331–1345.
Salsabila, N. A., Juliarto, H. K., Syawal, A. F., & Nohe, D. A. (2022). Analisis Regresi Data Panel pada Ketimpangan Pendapatan Daerah di Provinsi Kalimantan Timur. Prosiding Seminar Nasional Matematika, Statistika, Dan Aplikasinya, 2, 241–253.
Salsabila, S., & Santoso, U. (2021). Pengaruh Kepemilikan Saham Mayoritas Terhadap Kinerja Keuangan Perusahaan Farmasi (Studi Perusahaan Farmasi Yang Terdaftar Di Bei Tahun 2015-2019). Jurnal Administrasi Bisnis, 17(2), 129–158. https://doi.org/10.26593/jab.v17i2.5238.129-158
Sugiyono. (2019). Metode Kuantitatif, Kualitatif, dan R & D. Alfabeta.
Sukhani, N., & Hanif, H. (2023). The Role of Environmental Performance in The Effect of Managerial Ownership, Independent Board of Commissioners, and Social Costs On Corporate Social Responsibility Disclosure. Journal of The Community Development in Asia, 6(2), 55–69. https://doi.org/10.32535/jcda.v6i2.2325
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
Truong, T. H. D. (2024). Environmental, social and governance performance and firm value: does ownership concentration matter? Management Decision. https://doi.org/10.1108/MD-10-2023-1993
Wahyuningsih, I., & Meiranto, W. (2021). Pengaruh Good Corporate Governance dan Regulasi Pemerintah Terhadap Pengungkapan Informasi Akuntansi Lingkungan. Diponegoro Journal Of Accounting, 10(4), 1–12.
Wirantika, A. D., Pradita, D. R. S., & Sany. (2020). Pengaruh Asimetri Informasi, Female Director, Board Independence Terhadap Manajemen Laba pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Periode 2016-2020. 1182–1192.
Zulfikar, Z., Syahnur, S., & Majid, M. S. A. (2021). The Effect of Energy Consumption, Energy Resources, Economic Growth, and Road Infrastructure on Co2 Emissions in Indonesia. International Journal of Quantitative Research and Modeling, 2(3), 173–183. https://doi.org/10.46336/ijqrm.v2i3.173
Zulkarnaen, W., Fitriani, I., & Yuningsih, N. (2020). Pengembangan Supply Chain Management Dalam Pengelolaan Distribusi Logistik Pemilu Yang Lebih Tepat Jenis, Tepat Jumlah Dan Tepat Waktu Berbasis Human Resources Competency Development Di KPU Jawa Barat. Jurnal Ilmiah MEA (Manajemen, Ekonomi, & Akuntansi), 4(2), 222-243. https://doi.org/10.31955/mea.vol4.iss2.pp222-243.
Published
2024-12-30
How to Cite
Hesniati, H., Sonata, V., & Haryanto, H. (2024). BOARD CHARACTERISTICS AND ENVIRONMENTAL PERFORMANCE : DOES OWNERSHIP MODERATE THE IMPACT?. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 8(3), 3002-3015. https://doi.org/10.31955/mea.v8i3.4808
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