JRSSEM 2023, Vol. 02, No. 8, 1779 – 1796
E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494
DOI : 10.59141/jrssem.v2i08.404 https://jrssem.publikasiindonesia.id/index.php/jrssem
EFFECT OF BOARD OF DIRECTORS SIZE, BOARD OF DIRECTORS
CHARACTERISTICS, OWNERSHIP STRUCTURE, AND
COMPANY SIZE ON THE QUALITY OF SUSTAINABILITY
REPORTING DISCLOSURES
Dwi Setiawan
1
Agustin Fadjarenie
2
Lin Oktris
3
1,2,3
Mercu Buana University, Jakarta Indonesia
*
e-mail: 55519110013@student.mercubuana.ac.id, agustin.fadjarenie@mercubuana.ac.id,
lin.oktris@mercubauana.ac.id
*Correspondence: 55519110013@student.mercubuana.ac.id
Submitted
: March 05
th
2023
Revised
: March 14
th
2023
Accepted
: March 25
th
2023
Abstract: This study aims to analyze the quality of Sustainability Reporting disclosures and test the
factors that influence them. The quality of Sustainability Reporting disclosures is identified using
content analysis techniques based on the GRI Standards. GRI Standards is the latest guideline
launched by the Global Reporting Initiative which became effective in 2018 in Indonesia. Factors
influencing the quality of Sustainability Reporting disclosures were tested using quantitative
methods of multiple regression analysis. This study used 36 samples obtained through purposive
sampling from infrastructure sector companies listed on the Indonesia Stock Exchange that
disclosed sustainability reporting for the 2016-2021 period. The results showed that the quality of
sustainability reporting in Indonesia is still relatively low at 17.41%. This implies that voluntary
sustainability reporting disclosures make companies less motivated to make in-depth disclosures.
The number and characteristics of the company's board of directors have a significant influence
and the ownership structure and size of the company have a significant positive influence on the
quality of sustainability reporting.
Keywords: sustainability reporting quality; corporate governance; company size; board of
directors.
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INTRODUCTION
At this time the company is required to
be able to continue to compete and
implement the established
strategy (Ariana, 2016). One of the ways
that companies do this is by carrying out
activities that provide benefits not only for
the company but have a positive impact on
stakeholders (Pratiwi et al., 2020). In the
form of financial reporting, it is considered
that stakeholders are not enough to be the
main source of information for them, so
non-financial reports are needed to provide
more comprehensive information (Fischer,
2016). One form of non-financial report is
the sustainability report, this report
contains information related to the
economy, environment, and corporate
society that can be used as a tool for
achieving legitimacy in society (Ching et al.,
2017).
Globally, business entities have
responded to the importance of
sustainability reporting through the
disclosure of the Sustainability
Report (Ariana, 2016). Since 2002 the trend
of publishing sustainability reporting in the
world has increased every year, as of 2020
a total of 80% of companies have published
sustainability reporting (KPMG, 2020). Even
the improvement of the corporate
governance system has also begun to be
carried out by business people in
Indonesia, along with the need for reports
on environmental, social, and good
governance performance in an accountable
manner to stakeholders in reviewing a
company. According to the 2015 Global
Investor Survey (CRMS, 2022), the quality of
the company's Sustainability Report in
Indonesia is still considered minimal when
compared to other neighboring countries
regarding non-financial information from
companies for investors. The survey
assessed that Thailand ranks first in the
quality of CSR implementation with 56.8
out of 100 points followed by Singapore
and Indonesia with 48.8 and 48.4 out of 100
points. Quality assessment criteria are
sourced from indicators of the Global
Reporting Initiative (GRI) framework
covering economic, environmental, and
social (Asean CSR., 2016).
The form of government support for
reporting sustainability disclosures is
contained in Law Number 40 of 2007
concerning Limited Liability Companies
article 1 paragraph (3) which states that
universities have the responsibility to
contribute to the social and environmental
sector or Corporate Social Responsibility
(CSR). The regulation also explains that
Social and Environmental Responsibility
aims to realize sustainable economic
development to improve the quality of life
and the environment that is beneficial to
the company itself, the local community,
and the community in general (Situmorang
& Hadiprajitno, 2017b). Balanced and
harmonious conditions on the three
bottom lines (Profit, People, Planet) are the
intention of the Government so that the
company can carry out its obligations to
stakeholders.
Other regulations that support the
government are contained in the Financial
Services Authority Regulation Number 51/
POJK. 03/ 2017 concerning the
implementation of sustainable finance for
financial service institutions, issuers, and
public companies that organizations are
1781 | Effect of Board of Directors Size, Board of Directors Characteristics, Ownership
Structure, and Company Size on The Quality of Sustainability Reporting Disclosures
required to be responsible for corporate
social responsibility, as a commitment to
business activities and decisions, to
contribute positively in the long term (OJK,
2017) Form of responsibility in the form of
Sustainability Report namely reports
announced to the public that contains the
economic, financial, social, and
environmental performance of a Financial
Services Institution, Issuer, and Public
Company in running a sustainable business.
Meanwhile, the whistleblower is a public
company, issuer, and Financial Services
Institution (LJK), as stated in the regulation
that the submission is submitted to the
Financial Services Authority every year
(OJK, 2017).
The Global Reporting Initiative (GRI) is
a non-governmental organization that
develops and disseminates the Global
Revenue Reporting Sustainability Standard.
GRI played a role in developing the
standard guidelines for Sustainability
Report. In its development, GRI has
launched the GRI G1, GRI G2, GRI G3, GRI
G3.1, GRI G4, and GRI Standards reporting
guidelines. The difference between GRI
Standards and GRI G4 is related to 2 specific
indicators that are "discontinued" and a
total of 42 revised. GRI Standards still
emphasize the issue of gender equality and
value chain involvement in every aspect of
sustainability as well as materiality and
boundaries are still the basis for
determining the content of the report.
Good Corporate Governance is the
foundation for the formation of the
Company in shaping the company's system,
structure, and culture. According to PER-
01/MBU/2011 concerning the
Implementation of Good Corporate
Governance in State-Owned Enterprises
including Transparency in information
disclosure, accountability, accountability by
sound corporate principles, independence
of company management without conflict
of interest, and fairness in the interests of
stakeholders (BPHN,2011). Implementation
of Governance Corporate the Good in
Supervisory Agency Finance and
Development (BPKP) is commitment, rules
main, and implementation of practices
business healthy and ethical.
Implementation Corporate Governance
Good this is one way to avoid conflicts and
differences in interests so the organization
must l be managed so that inflicting losses
on parties (BPHN, 2011).
The attention of stakeholders in paying
attention to non-financial aspects of
company reports makes an organization
motivated in pursuing a strategy
management company professionally
based principles of transparency,
accountability, responsibility answer,
independence, reasonableness, and
equality. Sustainability Report practices are
influenced by several factors. Previous
research has stated that CSR disclosures
can be influenced by several things, namely
the composition of the board of directors
(which outlines the factors in more detail on
the board size, the diversity of the
proportion of directors and independent
boards), the ownership structure and the
size of the company (Ahmed Haji,
2013); Rouf and (Rouf & Hossan, 2021).
A larger size or number of boards of
directors in board of directors can
contribute to the effectiveness of its
monitoring because the larger board
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provides diversity in terms of expertise and
more multiple to observe management
(Rouf & Hossan, 2021). Research (Hamad et
al., 2020) found that the size of the board
of directors affects disclosures report So a
large number of board members makes it
easier to get involved in all disclosure
issues, due to different expertise in
different areas.
The characteristics or experience of the
board of directors found that the
effectiveness of the board positively affects
the transparency of sustainability
reports. The results of the study (Garcia-
Torea et al., 2016) imply that directors must
have experience and company-specific
functional and specific skills to improve the
effectiveness of the board. He such
extensive insight and experience as a
reliable and respected leader and has a
proven track record during his leadership.
The public ownership of a company is
influenced by stakeholders. The high level
of public ownership indicates that the level
of public trust increases along with the
company's activities. The results of the
study (Zhang et al., 2022) show that the
public shareholding structure plays a role in
the implementation of CSR. This is shown
by the larger the ownership structure
owned by the public, the more motivation
in encouraging the implementation of CSR
by the company will be more effective.
Size Company is an of scale
that can be calculated with the total asset
rate and the sale which can indicate the
conditional company where a company is
larger will have an excess in
the source funds obtained for run its
company in earn profit. Research (Garcia-
Torea et al., 2016) that the size of a
company must operate in a way that is
profitable or, at least, not detrimental to the
community to get support from their
stakeholders. This indicates that the size of
the company is needed to increase the
company's assets as a form of achieving
optimal performance in maintaining the
sustainability of the company.
One of the indicators important to
know the condition of the economy in a
country in a certain period is the
data derived from Product Gross Domestic
Product (GDP). GDP is essentially the sum
of value added generated by all business
units in the country.
1783 | Effect of Board of Directors Size, Board of Directors Characteristics, Ownership Structure,
and Company Size on The Quality of Sustainability Reporting Disclosures
DOI : 10.59141/jrssem.v2i08.404 https://jrssem.publikasiindonesia.id/index.php/jrssem
Figure 1. Indonesia's GDP Growth
Based on the (Economics, 2023)
diagram information above, it can be seen
that Indonesia's GDP growth rate from
2019 to 2022 has changed quite volatilely.
Even in the second quarter of 2020, it
decreased by -5.32 until the first quarter of
2021 by -0.71.
The figures shown are in line with the
government's plan during the leadership of
President Joko Widodo for the 2014-2019
period that infrastructure is the driving
force of economic growth and this is
important because Indonesia is currently
focusing to spur economic growth
nationally. The government Jokowi-JK
period 2014-2019 gives priority to an
acceleration of development infrastructure
which is contained in Nawacita's sixth
agenda "Increasing People's Productivity
and Competitiveness Competitiveness in
International Markets. In Nawacita the six
contains a plan for the construction of
infrastructure in the form of new roads,
ports, airports, industrial l areas, and l so
on. To fulfill the sixth agenda, infrastructure
development is carried out massively.
(Central Statistics Agency, 2019) Global
Competitiveness Report, World Economic
Forum assessed that the quality of
Indonesia's infrastructure rose from a total
score of 4.2 in 2017 to 4.5 from a score of
1-7 in 2018. Indonesia's infrastructure
development also ranked on the Global
Competitiveness Index Indonesia up from
rank 41 in 2017 to rank 36 in the year 2018.
The availability and access to
infrastructure have an impact on the
welfare of the community. With the
availability of good infrastructure in terms
of quantity and quality that can be easily
accessed by the public, human
development will be able to continue to be
improved. Therefore, infrastructure
development that is a government
program can be monitored and monitored
through sustainability reporting to support
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the creation of balance and harmony
(profit, people, planet).).
This study outlines in more detail the
relationship between the size of the board
of directors, characteristics of the board of
directors, the structure of ownership, and
the size of the company to the quality of
disclosure of sustainability reporting
sourced from companies –l companies
listed on the Indonesia Stock Exchange. The
use of infrastructure company reports is
considered to be in line with government
targets as stated in Presidential Regulation
Number. 38 Year l 2015 concerning
Government Cooperation with Business
Entities l It is hoped that can help the
achievement of target investment in
infrastructure l the country.
Based on the above, this study entitled
"The Effect of Board of Directors Size, Board
of Directors Characteristics, Ownership
Structure and Company Size on the Quality
of Sustainability Reporting Disclosures
(empirical study on infrastructure
companies listed on the IDX in 2016-2021).
THEORETICAL FRAMEWORK USED
Legitimacy theory
The theory of legitimacy according
to (Dowling & Pfeffer, 1975) states that a
company will seek to do legitimacy and
strengthen the relationship established in a
social environment in the place where the
company operates so that if the legitimacy
of a company is not accepted by the
community due to the company not
complying with the provisions the It has
been predetermined then the legitimacy of
this can be withdrawn at any time.
Therefore, the company must comply with
the applicable provisions so that the
operation of the company can run well
Stakeholder Theory
This theory first was initiated in the
theory of strategic management: A
Stakeholder Approach (Freeman, 2010)
which states that prosperity and the
success of a company depend largely on
the ability of the company itself by aligning
the various interests of the stakeholders.
The existence of a circumstance (law) that
benefits the interests of shareholders and
conversely, numbers the interests of
suppliers, customers, employees, and the
surrounding community.
Sustainability Reporting
The quality of disclosure sustainability
(Sustainability Reporting) will be in line with
the value of a company. This means that
high-quality Sustainability Reporting will
help raise the value of the company. The
quality of Sustainability Reporting can be
determined by the standard used to
compile the report. According to (Loh,
2016) companies that use the standard
from GRI as guidelines for compiling it will
have a higher quality (Rofelawaty, 2014).
Size of the Board of Directors
Corporate governance practices differ
between companies because they usually
arise from differences in legal, institutional,
social, regulatory, and social contexts.
According to (Adel et al., 2019) that the
board of directors is appointed as an
internal instrument of the company which
has two functions, namely the control
function and the assistance of company
managers. According to (Mohammadi et
al., 2021) that the number of boards of
directors has a significant impact on CSR
disclosures.
Characteristics of the Board of Directors
1785 | Effect of Board of Directors Size, Board of Directors Characteristics, Ownership
Structure, and Company Size on The Quality of Sustainability Reporting Disclosures
The Board of Directors' profile is a key
element of the board's composition.
Companies get better results when
acquiring other companies if their directors
have special experience in the industry. The
characteristics of the board of directors
determine the effectiveness of the board of
directors in achieving the objectives of the
role of the organization (Garcia-Torea et al.,
2016)
Ownership Structure
According to (Jizi et al., 2014) public
ownership (ownership diffusion) is the
proportion of share ownership owned by
the public that has no relationship with
company management of company shares
below 15%. Companies that have high
ownership diffusion will get more
encouragement in disclosing corporate
social responsibility.
Company Size
The Board of Directors is responsible
for the Financial Statements of the
Company. The size of the company can be
determined by various values such as total
assets, sales, capital, profits, and so on, this
value can determine the size of the
company (Moeljono, 2004).
Table 1. Variable Measurement Indicator
No
Variable
Measurement
1
Size of the Board of
Directors
Size of the board of directors = ∑ members of the
board of directors
2
Characteristics of
the Board of Directors
Characteristics of the board of directors = length of
experience of the board of directors
3
Ownership
Structure
Ownership Structure = Public share ownership
4
Company Size
Company Size = Ln(Total Aset)
5
Sustainability
Reporting
given a score of “1” for items that are disclosed and
“0” if not disclosed
Research Hypothesis
The Effect of Board of Directors Size on
Disclosure Quality of Sustainability
Reporting
From a stakeholder theoretical
perspective, larger boards include
members of a more diverse stakeholder
group who can argue for the inclusion of
more multidimensional factors in
sustainability reporting practices (Kathy
Rao et al., 2012). These results are in line
with several previous studies which gave
positive results between the size of the
board of directors and the quality of
disclosure of sustainability reporting ((Qa,
2019; Samaha et al., 2015); (Jizi et al., 2014);
(Mohammadi et al., 2021); (Samaha et al.,
2015).
H1: There is a positive influence
between the size of the Board of Directors
and the quality of disclosure of
Sustainability Reporting on the Company's
Infrastructure that is listed on the IDX
during the 2016-2021 period.
The Effect of Characteristics of the Board of
Directors on the Quality of Disclosure of
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Sustainability Reporting
Effects of Characteristics of the Board
of Directors on Disclosure Quality of
Sustainability Reporting study indicated
that the need for a better understanding of
the board of directors determines the
effectiveness of the board (Garcia-Torea et
al., 2016).
H2: There is a positive influence
between the influence Characteristics of the
Board of Directors and the quality of
Sustainability Reporting disclosures on
Infrastructure Companies listed on the IDX
for the 2016-2021 period.
Effect of Ownership Structure on Disclosure
Quality of Sustainability Reporting
Based on legitimacy theory, companies
are part of society. When carrying out their
operational activities, companies need
support from the community and
information related to sustainability as a
form of corporate responsibility to the
community and the surrounding
environment (Situmorang & Hadiprajitno,
2017b).
Differences in the proportion of shares
owned by outside investors can affect the
completeness of the disclosure by the
company. (Khan et al., 2013) revealed that
when a company starts to go public, then
its direct accountability to the public
becomes very important. The existence of
share ownership by the general public will
put pressure on the company to disclose
additional information relating to the
visibility and accountability of the company
to a large number of stakeholders (Qa,
2019).
Therefore, the more parties who
need information about the company, the
more detailed information requested, and
thus the disclosure will be wider.
H3: There is a positive influence
between the influence of Ownership
Structure and the quality of Sustainability
Reporting disclosures on Infrastructure
Companies that are listed on the IDX for the
2016-2021 period.
The Effect of Company Size on the Quality
of Disclosure of Sustainability Reporting
Based on stakeholder theory,
companies that have been established for a
long time will have greater trust from
stakeholders than companies that have not
been established for a long time (Wijayana
& Kurniawati, 2018b) so that stakeholders
have higher expectations that must be
realized by companies related to high-
quality sustainable reporting disclosures.
Apart from that (Adel et al., 2019) also state
that larger companies are expected to have
more capital and resources to engage in
socially responsible practices and activities.
Company size shows a positive effect on
the disclosure of corporate sustainability
reporting in research (Bhatia & Tuli, 2017);
(Correa-Garcia et al., 2020); (Garcia-Torea et
al., 2016); (Giannarakis, 2014). L
1787 | Effect of Board of Directors Size, Board of Directors Characteristics, Ownership Structure,
and Company Size on The Quality of Sustainability Reporting Disclosures
DOI : 10.59141/jrssem.v2i08.404 https://jrssem.publikasiindonesia.id/index.php/jrssem
H4: There is a positive effect between
the effect of company size and the quality
of Sustainability Reporting disclosures on
infrastructure companies listed on the IDX
fo.
MATERIALS AND METHODS
Sample Classification
The determination of the sample in this
study is based on the purposive sampling
method, where the sample of companies is
selected based on the annual report and
sustainability report criteria respectively,
using the rupiah currency. The population
of infrastructure companies during the
2016-2021 period and published complete
financial reports, so there were 36 samples
in this study.
Research Data
Data collection techniques aim to
obtain the data needed in a study. In this
research, data collection was carried out in
two stages. The first is with library research,
namely through journals or previous
research and books related to the problem
being studied. The second stage is the
collection of secondary data that has been
provided by the Indonesia Stock Exchange
in 2016–2021. This research uses SPSS
software for data processing.
Variable Operational Definitions
Disclosure Quality of Sustainability Report
The research was conducted to
measure this variable by using (Rouf &
Hossan, 2021) in published sustainability
reports. In line with research, the researcher
measures this variable using a dummy that
will be given 1 if there is disclosure, and vice
versa is given 0 if there is no disclosure.
Size of the Board of Directors
Research conducted by (Adel et al.,
2019) measures this variable by using the
Number of Boards of Directors in an
Disclosure Quality of
Sustainability Reporting
Size of the Board of Directors
Characteristics of the Board of
Directors
Ownership Structure
Company Size
H
1
(+)
H
2
(+)
H
3
(+)
H
4
(+)
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organization in that period. Similar to what
was done by (Mohammadi et al.,
2021), (Garcia-Torea et al., 2016), (and
Hamad et al., 2020). In line with the
research, the researcher measures this
variable using the total number of directors.
Characteristics of the Board of Directors
Research conducted by (Garcia-Torea
et al., 2016) measures this variable by using
the average percentage of members of the
Board of Directors during the period who
have the same industry background. In this
study, the researcher measures this variable
by using the average experience of
members of the board of directors in the
same industry.
Ownership Structure
Research conducted by (Adel et al.,
2019) measures this variable by using the
proportion of shares owned by the public
that have no relationship with the
company's management of company
shares below 5%. In this study, the
researcher measures this variable by using
the sum of stock ownership of 5% or more.
Company Size
Research conducted by (Adel et al.,
2019) measures this variable by using
Company Size in an organization in that
period. Similar to what was done
by (Garcia-Torea et al., 2016), (and Hamad
et al., 2020). In this study, researchers
measure this variable by using a proxy for
total assets or total assets.
Company Size = Ln (total asset)
Analysis Tools
Classic assumption test
In this study, four classical assumption
tests aimed to test and find out whether or
not a regression model was feasible or not
used to analyze the data in this study.
1. The normality test
The normality test was carried out to
find out and test whether, in the
regression model, the independent
variables and the dependent variable
are normally distributed. The normally
distributed data indicates that the
regression model used to analyze the
data is good.
2. The heteroscedasticity test
The heteroscedasticity test is used to
test whether there is a similarity in the
variance of the residuals from one
observation to another. If there is a
similarity, it is called homoscedasticity
and if there is no similarity, it is called
heteroscedasticity
3. The autocorrelation test
The autocorrelation test is used to find
out and test in a regression mode
whether there is a correlation between
the confounding errors in the current
period (t) and the confounding errors
in the previous period (t-1). If the
resulting regression is free from
autocorrelation, then the regression is
said to be good. The autocorrelation
test was performed using the Durbin-
Watson test
4. The Multicollinearity test
This test was conducted to find out and
test whether a correlation was found
between the independent variables
and the dependent variable based on
the regression model used. This test is
used for research that uses more than
one independent variable and can be
seen by analyzing the VIF value. The
regression model is said to be
1789 | Effect of Board of Directors Size, Board of Directors Characteristics, Ownership
Structure, and Company Size on The Quality of Sustainability Reporting Disclosures
multicollinearity if:
1) Tolerance value < 0.10
2) VIF value > 10
Multiple Linear Regression Test
To test whether the independent
variable used whether it affects the
dependent variable, namely on the quality
of SR disclosure in the Infrastructure
Company report for 2016-2021. The
regression equation used is as follows:
lY = la + lX1 + lX2 + X3 + X4 + e
Information:
Y: Disclosure Quality of Sustainability
reporting
a: Parameters
X1: Variable Size of the board of directors
X2: Variable characteristics of the board of
directors
X3: Variable Ownership Structure
X4: Company Size Variable
e: An error condition
RESULTS AND DISCUSSION
Data Analysis and Discussion
Descriptive analysis is used to provide
an overview or description related to
research data. In this study, descriptive
statistical analysis was grouped in 2016 –
2021. Variable categories with ordinal data
types were seen using the ratio and
percentage of the company sample. As for
the category of variables with continuous
data types, it is seen using the minimum
value, maximum value, average, and
standard deviation.
Table 2. Variable Descriptive Analysis
Descriptive Statistics
N
Minimum
Maximum
Mean
Std.
Deviation
36
4.000
9.000
6.50000
1.055597
36
4.000
9.000
6.50000
1.055597
36
5.000
19.400
10.43697
4.182623
36
.300
.490
.35797
.061906
36
14.819
18.639
17.41575
1.225158
36
Source: Statistical Data Processing
Based on table 4.2 which shows the
results of the descriptive statistical test with
the amount of data (N) of 36 it can be seen
that the average value of the Board of
Directors Size (X1) is 6.5. The average value
of the Characteristics of the Board of
Directors (X2) is 6.5. The average value of
the Ownership Structure (X3) is 10.44. The
average value of Firm Size (X4) is 0.36. The
average value of Sustainability Reporting
(Y) is 17.42, which means that for all
samples, the quality of sustainability
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reporting disclosures has an average of
17.42%, the majority of which are related to
economic, environmental, and social items
in infrastructure companies that are in the
high profile category. Then seen from the
standard deviation value of 1.225158 which
means the standard deviation value is
smaller than the average value (mean), it
can be said that the data is homogeneous,
which means the data is good because
there is little variation in the data.
The minimum value of company size
data is 0.3. The maximum value of company
size data is 0.49. The average value (mean)
is 0.35797 which means that of all samples,
company size has an average value of
10.35%. The higher the percentage of
company size each year, the greater the
effort and ability of the company to
maintain its company. With an average of
0.35%, it shows that the company can
maintain its company well. Then the
standard deviation value is 0.06 which
means that the standard deviation value is
smaller than the average value. This shows
that the data is homogeneous, which
means that the data is said to be good
because of slight variations in the data.
The minimum value of ownership
structure data (public share ownership) is
5%. The maximum value of public share
ownership data is 19.4%. The average value
(mean) is 10.43%, which means that of all
samples, public ownership has an average
of 10.43%. The higher the share ownership
by the public, the higher the public trust in
managing shares in the company. With an
average of 10.43%, it indicates that public
trust in the company is quite good. If the
average public share ownership is said to
be good, then investors or the public will be
more interested in working with companies
so that companies will improve the quality
of sustainability reporting disclosures. The
standard deviation value is 4.1%, which
means that the standard deviation value is
smaller than the average value, which
means that the data is homogeneous
because there are not too many variations
in the data.
The minimum value of the data on the
characteristics of the board of directors
(experience) is 4%. The maximum value of
company size data is 9%. The average value
(mean) is 6.5%, which means that of all
samples, the characteristics of the board of
directors have an average value of 6.5%.
The higher percentage of the
characteristics of the board of directors
each year means that the board of directors
has more experience in maintaining the
company and improving the quality of
sustainability reporting disclosures. With an
average of 6.5%, it shows that the company
can maintain its company well. Then the
standard deviation value is 1.0 which means
that the standard deviation value is smaller
than the average value. This shows that the
data is homogeneous, which means that
the data is said to be good because of
slight variations in the data.
The minimum value of the data on the
size of the board of directors (amount) is
4%. The maximum value of company size
data is 9%. The average value (mean) is
6.5%, which means that of all samples, the
size of the board of directors has an
average value of 6.5%. The higher the
percentage size of the board of directors
each year, it means that the greater the
ability of the board of directors to maintain
the company and improve the quality of
1791 | Effect of Board of Directors Size, Board of Directors Characteristics, Ownership
Structure, and Company Size on The Quality of Sustainability Reporting Disclosures
sustainability reporting disclosures. With an
average of 6.5%, it shows that the company
can maintain its company well. Then the
standard deviation value is 1.0 which means
that the standard deviation value is smaller
than the average value. This shows that the
data is homogeneous, which means that
the data is said to be good because of
slight variations in the data.
Table 3. Multiple Linear Regression Test Results
Variable
B
t count
Sig t
Information
(Constant)
1.346
Size of the Board of
Directors (X1)
0.045
2.685
0.012
Significant
Characteristics of
the Board of
Directors (X2)
0.039
2.644
0.013
Significant
Ownership
Structure (X3)
0.029
2.426
0.021
Significant
Company Size (X4)
0.019
2.571
0.015
Significant
F count
13.416
Sig F
0.000
Adjusted R Square
0.587
Based on table 4.7 above, the
calculation of multiple linear regression
using the SPSS program version 21.0 for
windows shows the following results:
Y = 1.346 + 0.045X1 + 0.039X2 + 0.029X3
+ 0.019X4 + e
a) Constant = l1.346
This means that if there are no
variables of Size of the Board of
Directors (X1), Characteristics of the
Board of Directors (X2), Ownership
Structure (X3), and Company Size (X4)
that influence Sustainability Reporting
(Y), then Sustainability Reporting (Y) is
1,346 units.
b) B1 = 0.045
This means that if the variable Size of
the Board of Directors (X1) increases by
one unit, Sustainability Reporting (Y)
will increase by 0.045 assuming the
other independent variables are
constant.
c) B2 = 0.039
This means that if the variable
Characteristics of the Board of
Directors (X2) increases by one unit,
then Sustainability Reporting (Y) will
increase by 0.039 assuming the other
independent variables remain
constant.
d) B3 = 0.029
This means that if the Ownership
Structure variable (X3) increases by one
unit, Sustainability Reporting (Y) will
increase by 0.029 assuming that the
other independent variables remain
the same.
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e) B4 = 0.019
This means that if the variable
Company Size (X4) increases by one
unit, Sustainability Reporting (Y) will
increase by 0.019 assuming the other
independent variables remain the
same.
Quality Level of Sustainability Report
Disclosure
Based on table 4.2, it is known that the
average value of the quality of disclosure of
corporate sustainability reports for 2016 –
2021 is 17.41575%. This value indicates that
the sustainability report in the
infrastructure sector belongs to the
category of poor quality. The quality of
disclosure of corporate social information,
which is still low and not good, is probably
caused by several factors.
There are many aspects mentioned in
the Global Reporting Initiative (GRI)
disclosure standards, so companies have to
collect a lot of data. This causes costs and
time needed, while there are limitations to
human resources in managing this. Thus, it
can be concluded that there must be
improvements related to corporate
disclosure activities in the infrastructure
sector to improve the quality of
sustainability report disclosures.
The effect of the size of the Board of
Directors on the quality of Sustainability
reporting disclosures
Based on table 4.7, it is known that the
results of statistical tests that have been
carried out on the hypothesis state that the
variable characteristics of the board of
directors have a significant influence on the
quality of Sustainability Report disclosures.
The results of this study are consistent with
the results of previous research that the
characteristics of the board of directors
determine the effectiveness of the board of
directors in achieving organizational goals
(Garcia-Torea et al., 2016). This is in line with
the results of the current study, namely that
there is a positive and significant effect of
the characteristics of the Board of Directors
on the Quality of Disclosure of
Sustainability Reporting. This study
discusses the experience of the board of
directors in the ranks of infrastructure
sector companies that have contributed by
the principles in carrying out their duties,
namely professionals. Professional, namely
having integrity and having the necessary
experience and skills.
Effect of Characteristics of the Board of
Directors on the quality of Sustainability
reporting disclosures
Based on table 4.7, it is known that the
results of statistical tests that have been
carried out on the hypothesis state that the
variable characteristics of the board of
directors have a significant influence on the
quality of Sustainability Report disclosures.
The results in this study are consistent with
the results of previous research that the
characteristics of the board of directors
determine the effectiveness of the board of
directors in achieving the goals of the
organization's role (Giannarakis, 2014). This
is in line with the results of the current
study, namely that there is a positive and
significant effect of the characteristics of
the Board of Directors on the Quality of
Disclosure of Sustainability Reporting. This
study discusses the experience of the board
of directors in the ranks of infrastructure
sector companies that have contributed by
the principles in carrying out their duties,
1793 | Effect of Board of Directors Size, Board of Directors Characteristics, Ownership
Structure, and Company Size on The Quality of Sustainability Reporting Disclosures
namely professionals. Professional, namely
having integrity and having the necessary
experience and skills.
Effect of Ownership Structure on the quality
of Sustainability reporting disclosures
Based on table 4.7, it is known that the
results of statistical tests that have been
carried out on the hypothesis state that the
ownership structure variable has a
significant influence on the quality of
Sustainability Report disclosures. The
results of this study are consistent with the
results of previous research that the more
concentrated ownership of shares by
outsiders will provide an opportunity to
monitor management activities (Qa, 2019).
Based on legitimacy theory, companies are
part of society. When carrying out their
operational activities, companies need
support from the community and
information related to sustainability as a
form of corporate responsibility towards
the community and the surrounding
environment. (Situmorang & Hadiprajitno,
2017a). Differences in the proportion of
shares owned by outside investors can
affect the completeness of the disclosure
by the company. (Khan et al.,
2013) revealed that when a company starts
to go public, its direct accountability to the
public becomes very important. The
existence of share ownership by the general
public will put pressure on the company to
disclose additional information relating to
the company's visibility and accountability
to a large number of stakeholders (Qa,
2019).
This study discusses the number of
public shareholdings in infrastructure
sector companies that influence
organizations in forming sustainability
reporting disclosure reports by disclosing
company activities in ensuring company
sustainability. Therefore, the more parties
who need information about the company,
the more detailed information will be
requested and thus the disclosure will be
wider.
Effect of Company Size on the quality of
Sustainability reporting disclosures
Based on table 4.7, it is known that the
results of statistical tests that have been
carried out on the hypothesis state that the
company size variable has a significant
influence on the quality of Sustainability
Report disclosures. The results in this study
are consistent with the results of previous
research that company size can be
determined by various values such as total
assets, sales, capital, profits, and others, this
value can determine the size of the
company (Giannarakis, 2014). Based on
stakeholder theory, companies that have
been established for a long time will have
greater trust from stakeholders than
companies that have not been established
for a long time (Wijayana & Kurniawati,
2018a) so that stakeholders have higher
expectations that must be realized by
companies regarding quality sustainable
reporting disclosures. Besides that (Adel et
al., 2019) also state that larger large
companies are expected to have more
capital and resources to engage in socially
responsible practices and activities.
Company size shows a positive influence on
the disclosure of the company's
sustainability reporting in the study (Bhatia
& Tuli, 2017); (Correa-Garcia et al., 2020);
(Garcia-Torea et al., 2016); (Giannarakis,
2014).
Dwi Setiawan
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This study discusses company size in
infrastructure sector companies that
influence organizations in forming
sustainability reporting disclosure reports
by disclosing company activities in
ensuring company sustainability.
CONCLUSIONS
This study aims to determine empirical
evidence regarding the effect of board size,
characteristics of the board of directors,
ownership structure, and company size on
the quality of disclosures in the
Sustainability Report. From the tests that
have been carried out, the following results
were obtained:
1. The size of the board of directors has a
significant effect on the quality of
sustainability reporting disclosures.
This is because a large number of
boards of directors can encourage
communication and coordination in
the inclusion of more multidimensional
factors in the practice of sustainability
reporting disclosures.
2. The characteristics of the board of
directors have a significant effect on
the quality of sustainability reporting
disclosures. This can be due to the
experience that has been contributed
by the principles in carrying out their
duties so that it encourages the
improvement of the quality of
sustainability reporting disclosures.
3. The ownership structure has a
significant influence on the quality of
sustainability reporting disclosures.
This can be because the ownership of
shares by the general public will put
pressure on companies to disclose
sustainability reporting based on
criteria to stakeholders.
4. Company size has a significant effect
on the quality of sustainability
reporting disclosures. This is because
the larger the company, it is expected
to have more capital and resources to
engage in responsible practices and
activities.
Based on the results of the discussion
and conclusions, the following suggestions
can be given:
Based on research data, the disclosure
of sustainability reporting does not yet
reflect the efforts of infrastructure sector
companies to disclose quality and
professional sustainability reporting.
Based on the results of the study which
show that the influence of the variables in
this study on the quality of sustainability
reporting disclosure is 58.7%, the
remaining 41.3% is influenced by other
variables not examined. Therefore, for
future researchers to study and examine
other variables that can affect the quality of
sustainability reporting disclosures.
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