Corporate governance as a catalyst for sustainability reporting: Evidence from Indonesian listed banks

Abstract

This study aims to examine the influence of corporate governance on sustainability reporting (SR) in the Indonesian banking sector. The main focus of this study is to evaluate how four key elements of corporate governance—institutional ownership, managerial ownership, audit committee, and board of commissioners—influence sustainability reporting practices. The data used in this study come from the annual reports and sustainability reports of banks listed on the Indonesia Stock Exchange (IDX) for the 2017-2022 period. The sample was selected using a purposive sampling technique. In this study, data observation uses a panel data set with parameter estimation of the direct influence model using Generalized Least Square (GLS). The results show that institutional ownership has a positive effect on sustainability reporting, managerial ownership has a negative effect on sustainability reporting, while the audit committee and board of commissioners have no effect on sustainability reporting. This study provides an important contribution to the literature on corporate governance and sustainability reporting, and provides practical recommendations for banks and stakeholders to improve the quality of sustainability reporting by strengthening corporate governance mechanisms.