Abstract
This study aims to investigate the effect of good corporate governance (GCG) on corporate sustainability performance (CSP) using the Triple Bottom Line (TBL) approach in a two-tier GCG system. GCG is measured by the size and education background of board of commissioners (BoC) and top management team (TMT). CSP consists of economic, social, and environment sustainability performance. As many as 117 sample data were collected from the financial statements, annual reports and sustainability reports of non-financial companies listed on the Indonesia Stock Exchange (IDX) for the period of 2013–2017. Multiple regression analysis was employed to test the hypotheses studied with the following results. First, BoC education has a negative effect on economic and environmental sustainability performance and no effect on social sustainability performance. Second, BoC size has a positive effect on economic sustainability performance, a negative effect on social sustainability performance and no effect on environmental sustainability performance. Third, CEO's education has a negative effect on economic sustainability performance, and no effect on environmental and social sustainability performance. Fourth, TMT size has a negative effect on economic and environmental sustainability performance and no effect on social sustainability performance. Contributions, limitations and implications of the study are also discussed.
Highlights
Sustainability has become the concern of all nations
This study focuses on the four variables of good corporate governance (GCG) structure, namely board of commissioners (BoC) size, BoC education, top management team (TMT) size, CEO's education, and three elements of corporate sustainability performance (CSP), namely economic, social, and environment sustainability performance
The objective of this study is to investigate the effect of GCG on CSP using a Triple Bottom Line (TBL) approach in Indonesia as a country that follows a two-tier GCG system
Summary
Sustainability has become the concern of all nations. All United Nations (UN) member states adopted the Sustainable Development Goals (SDGs) in 2015 in order to end poverty, protect the planet and ensure prosperity by 2030. In the era of sustainable development, all companies are demanded by their stakeholders to increase awareness when carrying out their corporate responsibilities including dealing with global warming and human rights problems (Agnolucci and Arvanitopoulos, 2019; Alam et al, 2019; Shahbaz et al, 2020). Stakeholders expect that the company will sustainably realize its vision and mission. To realize its vision and mission, the company must build the stakeholder's trust. The Global Reporting Initiative (GRI, 1997) stated that trust must be maintained to achieve corporate sustainability
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