The Effect of Ownership Structure and Board Diversity on Corporate Social Responsibility (CSR) Disclosure

Abstract

Purpose: The aim of this studi is to determine the effect of ownership structure and Board Diversity on Disclosure of Corporate Social Responsibility Theoretical framework: Agency theory can be defined as a relationship that occurs between the principal (owner) and agent (manager) and meets in a contract, where the manager becomes the party that is given the power to make decisions that represent the decisions of the owners in the context of managing the operational activities of the business entity. Design/Methodology/Approach: This research is a quantitative study that aims to determine the effect of ownership structure (institutional ownership, managerial ownership, ownership concentration) and board diversity (gender diversity board and nationality diversity board). The samples in this study were taken from the manufacturing and mining sector companies listed on the Indonesia Stock Exchange in the 2019-2021 period which were selected based on the purposive sampling method. Findings: The results of the test show that (1) institutional ownership has negative effect on disclosure of Corporate Social Responsibility, (2) managerial ownership has no effect on disclosure of Corporate Social Responsibility, (3) concentration of ownership has a negative effect on disclosure of Corporate Social Responsibility, (4) board gender diversity does not affect the disclosure of Corporate Social Responsibility, (5) the nationality diversity board does not affect the disclosure of Corporate Social Responsibility. Research, Practical & Social implications: The higher institutional ownership in the company causes them to be able to control decisions in the company. And the results of this study also state that there is a negative influence between institutional ownership and disclosure of Corporate Social Responsibility because institutional investors or shareholders tend to make short-term investments that focus more on company profits and profits in order to get returns from their investments and tend not to pay attention to the problem of Corporate Social Responsibility in the company. Originality/Value: This research are that some of them are that there are still many companies in the sector used in the research that do not publish sustainability reports. In addition, the research only uses sustainability reports that use the GRI Standard guidelines, so the sample obtained is relatively small.