WORKING PAPER

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Browsing WORKING PAPER by Author "Kartadjumena, Eriana"

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    THE BOARD OF COMMISSIONERS, CORPORATE SUSTAINABILITY CONCERNS AND COMPANY FINANCIAL PERFORMANCE: EVIDENCE FROM INDONESIAN COMMERCIAL BANKS
    (Fakultas Ekonomi Universitas Widyatama, 2019-01) Kartadjumena, Eriana
    This study addresses the issue of whether mandatory internal corporate governance mechanisms, particularly the role of board of commissioners as the board supervision function, could influence corporate sustainability concerns as the construct of corporate responsibility disclosure. Further, this study examines whether there is an extended impact of the relationship of corporate sustainability concern on financial performance, in terms of both financial health and market value performance. This study provides evidence that the board of commissioners could be an important control mechanism to encourage the company to be more concerned with corporate sustainability with respect to economic, environment, and social activities. Further, viewed from the shareholder perspective, the positive influence brought by the board of commissioners on corporate sustainability concerns may dampen the firm's market value. On the other hand, according to the stakeholder perspective, the positive influence of the board of commissioners on corporate sustainability concern will improve company market value performance through its financial health performance. Moreover, this study also reveals that the motive of Indonesian banking companies in engaging in corporate sustainability initiatives tends to be altruistic. Indonesian commercial banking companies conduct corporate social responsibility activities only for their own sake, which influences the reduction of the company’s financial performance, both financial health and market value performance.
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    EXECUTIVE COMPENSATION, CORPORATE SUSTAINABILITY CONCERNS AND COMPANY FINANCIAL PERFORMANCE IN INDONESIAN COMMERCIAL BANKING
    (Fakultas Ekonomi Universitas Widyatama, 2019-01) Kartadjumena, Eriana
    This research explores the potential influence of executive compensation on corporate sustainability concerns and company financial performance. Interestingly, by investigating the pay-for-performance relationship, this study finds that executive compensation has a direct significant positive impact on corporate sustainability concerns and both company financial health and market value performance. Meanwhile, by adopting a shareholder perspective, this study reveals that higher executive compensation can encourage managers to adopt more corporate sustainability concerns for the shareholders' and/or managers' benefits; however, this will reduce the firm's value. Moreover, a counter-balance mechanism occurs when employs the stakeholders' perspective is employed. High executive compensation motivates managers to implement more corporate sustainability concerns to serve all stakeholders’ interests, which may to increase the firm's market value through company financial health.