WORKING PAPER

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Browsing WORKING PAPER by Subject "Company Financial Performance and the Throughput Model"

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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.