JRSSEM 2023, Vol. 02 No. 9, 2080 – 2097

E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494

DOI: 10.59141/jrssem.v2i09.411 https://jrssem.publikasiindonesia.id/index.php/jrssem/index

THE EFFECT OF CSR DISCLOSURE ON COMPANY

PERFORMANCE WITH CEO PROFICIENCY AS A

MODERATION VARIABLE

Findy Rachmandika Muhammad

Sutrisno T

Muhammad Tojibussabirin

1,2,3

faculty of Economics and Business Universitas Brawijaya Malang, Indonesia

Email: findyrachmandika@gmail.com, sutrisno@gmail.com,

muhammadtojibussabirin@gmail.com

*Correspondence: findyrachmandika@gmail.com

Submitted

: April 03

2023

Revised

: April 15

2023

Accepted

: April 25

2023

Abstract: This study aims to examine the impact of corporate social responsibility (CSR) on the

financial performance of manufacturing companies in Indonesia and examine the role of CEO ability

as moderating variable. Hierarchical regression analysis is used to test the effect of CSR on firm

performance and test CEO ability as moderating variable. This study uses 213 samples observation

data from manufacturing companies listed on Indonesia Stock Exchange (IDX) from 2019 until 2021.

The results showed that CSR disclosures affect firm performance as measured by return on assets

(ROA). The results of this study also showed that CEO ability as moderating variable unable to

increase the influence of CSR on firm performance. These results indicate that when a firm

performance has no significant growth and the firm has a problem that decreased the firm

profitability for example COVID-19 pandemic, CEOs have a tendency not to carry out an activity

that costs money for example CSR.

Keywords: CSR Disclosure; CEO Ability; Firm Performance.

Findy Rachmandika Muhammad

Sutrisno T

Muhammad Tojibussabirin

| 2081

INTRODUCTION

Company performance is the main

indicator to determine the success of the

company in achieving its goals. The

company's performance can be seen from

the financial condition analyzed using

financial ratios so that the company's

achievements in a certain period can be

measured with valid results. The

performance of companies that have

increased will certainly also affect investor

perception, so good performance will

provide positive signals for the company's

development in the future. Positive

company performance will certainly also

have a good impact on the company's

management. One indicator in measuring a

company's performance is to assess its

profitability ratio.

Profitability is the company's ability to

obtain profits so this indicator must get

special attention because the profitability

factor is the key for the company to

continue to be sustainable without profit, it

will be difficult for companies to get

investment capital from outside. The

profitability ratio is a ratio aimed at

knowing how much the ability of a

company to earn profits in a certain period

and provide an overview of the level of

management effectiveness in the

company's operational activities. The types

of profitability ratio measurements consist

of Return on Assets (ROA), Net Profit

Margin (NPM), (Kashmir, 2012)Gross Profit

Margin (GPM), and Return on Equity (ROE)

(Sanjaya &; Rizky, 2018).

Return on Assets or ROA is often used

as a tool to measure the condition of a

company's financial performance in a

healthy state or vice versa. Companies that

experience an increase in ROA will

automatically increase the attractiveness

for investors to invest because the rate of

return is getting bigger and the stock price

is certainly also increasing. This research

takes one of the sectors on the Indonesia

Stock Exchange, namely the manufacturing

sector.

Companies listed on the Indonesia

Stock Exchange certainly consist of various

sectors, one of which is the manufacturing

sector. The sector of companies engaged in

manufacturing is the most strategic land to

invest so it is expected to obtain high

profits. The manufacturing company sector

is one of the sectors that can boost the

pace of the country's economy because the

manufacturing sector can increase GDP by

20%, the tax sector by 30%, and exports by

74%. The operating activities of the

manufacturing company sector have a

positive impact on economic expansion

and increase the country's foreign

exchange so that of course the

manufacturing sector also experiences

good company performance (MINISTRY OF

INDUSTRY, 2019).

The development of ROA in 9 largest

manufacturing companies in Indonesia

according to Bernas. id namely PT. Semen

Indonesia (SMGR), PT. Japfa Comfeed

Indonesia (JPFA), PT. Tjiwi Kimia Paper

Factory (TKIM), PT. Indofood CBP Sukses

Makmur (ICBP), PT. Gudang Garam (GGRM),

PT. Kimia Farma (KAEF), PT. Unilever

Indonesia (UNVR), PT. Astra International

(ASII), and PT. Sri Rejeki Isman (SRIL) is

calculated to have varying levels of ROA in

2082 | The Effect of CSR Disclosure On Company Performance With Ceo Proficiency As A

Moderation Variable

the period 2019 to 2021 as shown in the table below.

Table 1.

ROA 9 Manufacturing Companies for the period 2019 to 2021

Emit

ROA 2019 (in

percent)

ROA 2020 (in

percent)

ROA 2021 (in

percent)

SMGR

3.58

2.64

JPFA

6.7

4.7

7.5

TKIM

5.4

4.8

7.9

ICBP

14.7

10.4

7.1

GGRM

21.4

13.1

9.5

KAEF

-0.07

0.1

1.7

UNVR

36.1

34.8

29.1

ASIA

SRIL

5.2

4.6

-87.6

Source: Researcher (Processed)

Table 2.

ROA Bar Chart of 9 Largest Manufacturing Companies in Indonesia for the period 2019 to

2021

Source: Researcher (Processed)

The table informs that it is known that

9 companies have quite fluctuating ROA

values. A good ROA is at 5% while to be

perfect the ROA level must be more than

equal to 20%. The table provides

information that even large companies

experience problems related to their

financial performance which are known

from the ROA level for the period 2019 to

2021 so companies need action to

maximize company operations to obtain

investments that aim to ensure that

company operations are not hampered,

one of which is by carrying out CSR

-100%

-80%

-60%

-40%

-20%

20%

40%

60%

80%

100%

SMGR JPFA TKIM ICBP GGRM KAEF UNVR ASII SRIL

ROA 9 Perusahaan Manufaktur Terbesar di Indonesia

2019 2020 2021

Findy Rachmandika Muhammad

Sutrisno T

Muhammad Tojibussabirin

| 2083

activities. (Birken & Curry, 2021)

The development of CSR in the 21st

century has become a major focus in

business activities around the world. CSR

practices are often defined as corporate

activities that not only focus on profit but

also focus on social welfare. Davis (1973)

also elaborated that CSR is not only used

for profit motives but is also expected to be

able to contribute to society in the long run.

Companies that increasingly disclose CSR

activities can earn more profits than

companies that do not or even carry out

CSR activities. The manufacturing company

sector is the company that discloses the

most social responsibility items as many as

567 items (Hadi, 2010) (Freeman &

Hasnaoui, 2011) (Lambertini & Tampieri,

2015).

CSR disclosure is a rule set by the

government to support the Partnership and

Community Development Program (PKBL),

but the reality on the ground is that only

about 30% of companies have shifted from

just fulfilling obligations from stakeholders

to part of the company's strategy, the rest

are just fulfilling requirements and void

obligations (Hadi, 2011). Companies that

disclose CSR activities should not only be

void of obligations and report in annual

reports but must also be integrated into

strategic planning, and business practices,

and must be by company objectives. The

state of infrastructure that is still untouched

in Indonesia, the situation of order, health

problems, and education problems raises a

fundamental question of whether only the

government should address this, does the

corporate sector also have the same

responsibility in solving social problems

where the company operates?

Today, companies that used to only

focus on profits and increasing profitability

are required to pay attention to social and

environmental responsibility. This

commitment is the main issue of the

concept of corporate social responsibility.

One of the legal umbrellas for the

implementation of CSR in Indonesia itself is

regulated in Law Number 40 of 2007 Article

74 which aims to improve the quality of life

and the environment for the company, the

community, and society in general.

Companies that carry out CSR activities

can certainly reduce social turmoil and can

improve their image for stakeholders, while

companies that do not carry out CSR

activities will get sanctions according to

laws and regulations. Companies that do

not carry out CSR activities will be subject

to administrative sanctions in the form of

written warnings, restrictions on business

activities, and suspending, and revocation

of business activities including investment

facilitation activities.

This sanction is only regulated in

Article 34 of the Capital Market Law, which

means it seems unclear and makes the

company seem careless in carrying out CSR

activities even though this activity is carried

out so that sustainable development can be

created and it is hoped that the company's

performance will have a positive impact so

that the urgency in research that discusses

CSR disclosure on performance is very

important to be carried out based on these

problems.

Corporate Social Responsibility is a

non-financial factor that will affect the

company's performance so the

implementation of CSR consistently in the

long term is expected to gain legitimacy

2084 | The Effect of CSR Disclosure On Company Performance With Ceo Proficiency As A

Moderation Variable

from the community which will improve the

good image. Corporate social responsibility

is a form of corporate commitment to

behave ethically towards stakeholders

either directly or indirectly to improve the

quality of life and welfare by considering

social, economic, and environmental

aspects.

Awareness of the negative impacts that

can occur at any time makes CSR a global

trend by prioritizing the interests of

stakeholders. CSR has become an activity

that has become a concern since the

issuance of the regulation of the Minister of

Environment of the Republic of Indonesia

number 3 of 2014 concerning the

company's performance rating assessment

program in managing the environment and

Law number 40 of 2007 concerning Limited

Liability Companies which requires all

companies to report CSR activities in their

respective annual reports.

The concept of CSR is a response from

community groups who expect corporate

responsibility to be able to participate in

providing environmental improvements in

disaster-affected areas, especially in a

pandemic like today (Agoes & Ardana,

2011). The community response

encourages companies to actively

participate in activities that can improve

social welfare (Anggraini, 2012). CSR is

defined as corporate activities that not only

pay attention to economic aspects but are

also related to social welfare (Freeman &;

Hasnaoui, 2011; Mcwilliams & Siegel,

2001). Companies that carry out CSR

activities will be viewed favorably by

external parties, in this case, the

stakeholders because they assume that the

disclosure of CSR activities that are quite

complex will increase the legitimacy of

stakeholders so that the company's

reputation will increase and the impact of

the revenue obtained increases and

improves company performance (Rahman

& Saraswati, 2016).

Several empirical studies that discuss

the effect of CSR disclosure on company

performance have been widely conducted

both in Indonesia and abroad, for example,

research conducted by Mahoney & Roberts

(2007) which examined the effect of CSR on

company performance showed positive

results. Research by Fauzi, et al (2007) which

examines the relationship of corporate

social performance to corporate financial

performance in companies listed on the IDX

shows a positive influence.

Other studies that discuss the

influence between CSR and company

performance produce mixed results such as

research from Cheng et al (2016), and Zhu

et al (2014) states that CSR has a positive

effect on company performance while

research from Bromiley & Marcus (1989)

and Wright & Ferris (1997) states that CSR

does not affect company performance,

while Aupperle et al's research., (1985), and

Teoh et al., (1999) state that CSR and

corporate performance have no influence.

The empirical research provides mixed

results, causing research gaps where

several studies state that managerial skills

are one of the factors that greatly affect

company performance (Kor &; Mesko,

2012; Milbourn, 2003). CEOs with good

managerial skills will tend to be

conservative in their careers to be glimpsed

by better companies that can provide

higher salaries and obtain flawless

assessments that affect their reputation.

Findy Rachmandika Muhammad

Sutrisno T

Muhammad Tojibussabirin

| 2085

Based on this understanding, researchers

concluded that there is a relationship

between managerial skills and the effect of

CSR disclosure on company performance.

CSR is a long-term investment with

uncertain returns (Falck & Heblich, 2007;

Fieseler, 2011). High-ability CEOs tend to

have fewer worries about the future than

low-skilled CEOs, so more incentives will be

used to invest in CSR in hopes of long-term

benefits for the company (Fieseler, 2011).

This research is a development of

research conducted by Iqbal et al, (2019)

and Ting et al., (2021). Research by Iqbal et

al., (2019) examines the influence of CSR on

company performance in Indonesia with

intellectual capital as moderation using 147

samples of manufacturing companies listed

on the IDX which concludes that the

influence of CSR on company performance

is positively influenced by intellectual

capital while Ting et al's research ., (2019)

examined the effect of capital structure

mediation on the effect of managerial skills

on company performance using a sample

of 6348 electronic industry companies in

Taiwan in the period 2015 to 2018 which

provided results that managerial skills

positively affect company performance.

Researchers are interested in re-

examining the effect of CSR disclosure on

company performance because existing

empirical research provides mixed results

so that this study is expected to be able to

fill existing research gaps in addition to

differences in research samples and

research periods are also a motivation for

researchers to re-examine the effect of CSR

disclosure on company performance. This

study proxies CSR disclosure using the CSR

index while managerial literacy is proxied

using data envelopment analysis (DEA) and

company performance using return on

assets (ROA) proxy.

This study aims to provide empirical

evidence on whether CSR disclosure has a

positive effect on company performance

and examine the moderation effect of

managerial skills on CSR disclosure on

company performance.

Literature Review

Legitimacy Theory

Legitimacy or trust from the public

towards the company is an important key

for the company in developing the

company so that this can be used as an

effort for the company to continue to exist

while still paying attention to the

company's strategy so that every

company's operations must go hand in

hand with the expectations of the

community (Hadi, 2011). The company

certainly has the expected strategy and

achievements and this does not rule out the

possibility that there is a "legitimacy gap"

between the desired company

achievements and also the expectations of

the community which will affect the

company's operational activities.

Good legitimacy makes companies

aware that the survival of society also

depends on how the company relates to

stakeholders so one form of activity to gain

legitimacy is the disclosure of social

responsibility or CSR activities.

Stakeholder Theory

Stakeholders or stakeholders are

internal and external parties of the

company such as the government,

competing companies, surrounding

communities, institutions outside the

2086 | The Effect of CSR Disclosure On Company Performance With Ceo Proficiency As A

Moderation Variable

company, environmental observers,

company workers, and so on that affect or

are influenced by the company. The

company is natural to pay attention to

stakeholders and if not done it will result in

stakeholder legitimacy. Companies need to

maintain stakeholder legitimacy for

decision-making and achievement of

company goals (Hadi, 2011).

The company's strategy in this case

CSR activities will provide non-financial

information to stakeholders and the better

disclosure of CSR will make stakeholders

give full attention to the company so that

the goal is to improve performance and

obtain profits as planned.

Corporate Social Responsibility

Corporate Social Responsibility (CSR)

menurut The World Business Council for

Sustainable Development (WBCSD) dan

ISO 26000 adalah “Corporate Social

Responsibility is an ethical behavior that

contributes to sustainable development,

including health and the welfare of society

complies with applicable law and

consistent with international norms of

behavior. The responsibility of organization

for the impacts of its decision and activities

on society and the environment is

integrated throughout the organization

and practiced in its relationship” yang

bermakna bahwa komitmen dalam dunia

usaha untuk bertindak secara etis, legal,

dan berkontribusi untuk peningkatan

ekonomi dengan juga meningkatkan

kualitas hidup karyawan sekaligus

komunitas lokal dan masyarakat secara luas

(Wibisono, 2007; Prastowo & Huda, 2011).

CSR is a tool used by company

management to show all stakeholders

including potential investors about the

surplus value possessed by the company to

its concern for economic, social, and

environmental impacts as part of the

company's activities.(Lindawati &; Puspita,

2015)

The existence of CSR certainly has

regulations regulated by the government

such as Law Number 40 of 2007, Law

Number 25 of 2007, and PP Number 47 of

2012. The development of CSR in Indonesia

is seen from 2 perspectives, namely the

implementation of CSR is a voluntary

business practice (discretionary business

practice) which means that the

implementation of CSR is a company

initiative and is not an activity required by

the laws and regulations of the Republic of

Indonesia, the second is that the

implementation of CSR is no longer

discretionary business practices but it

becomes regulated by laws and regulations

or mandatory (Solihin, 2008).

John Elkington through his book

entitled "Cannibals with Fork, the Triple

Bottom Line of Twentieth Century Business"

developed the concept of the triple bottom

line, namely economic prosperity,

environmental quality, and social justice.

Companies certainly focus on profit, but

must also pay attention to the welfare of

the community (people), and participate in

preserving the environment (planet).

(Wibisono, 2007). The concept of the triple

bottom line is illustrated in Figure 2.1

below:

Findy Rachmandika Muhammad

Sutrisno T

Muhammad Tojibussabirin

| 2087

Figure 1.

Triple Bottom Line Concept

Source: Wibisono (2007)

This research is a development

research conducted by Iqbal et al., (2019)

and Ting et al., (2021). This research uses

financial data and sustainability report data

for all companies listed on the Indonesia

Stock Exchange for the 2020 and 2021

periods which are used as research

samples. Previous research that became a

reference in this study gave mixed results.

Research that examines the

relationship between CSR and company

performance is quite widely carried out,

such as research conducted by Waddock

and Graves (1997), Cheng et al (2016),

Manoney & Roberts (2007), Fauzi et al

(2007), and Zhu et al (2014) provide results

that CSR has a positive effect on company

performance. Research by Parengkuan

(2017), Bromiley & Marcus (1989), and

Wright & Ferris (1997) that examined the

effect of CSR on the performance of

manufacturing companies stated that CSR

does not affect company performance.

Karyawati et al (2018) also concluded that

CSR is influenced by the characteristics of a

country and the dimensions of CSR will also

change which results in changing

relationships.

CSR is an activity carried out by

companies to meet stakeholder requests

with long-term investment goals but full of

uncertainty (Falck &; Heblich, 2007; Fieseler,

2011). The most likely action for companies

to minimize risk is to have a capable CEO.

High-ability CEOs tend to have fewer

worries about the future than low-skilled

CEOs, so more incentives will be used to

invest in CSR in hopes of long-term benefits

for the company (Fieseler, 2011).

MATERIALS AND METHODS

Research design is a detailed

framework or blueprint for obtaining data,

measuring data, and analyzing data to

answer the formulation of research

problems (Sekaran &; Bougie, 2016). The

first step in conducting research is to

establish problem identification so that

research objectives are achieved and on

target. The next step is to describe the

background of the problems and

phenomena that occur in the field and the

last is the subject matter of research

formulated in question sentences so that

they can be identified in the research

results. This research is an empirical study

that aims to test the hypothesis of the

effect of CSR disclosure on company

performance, as well as the effect of

moderation of CEO proficiency on the

effect of CSR disclosure on company

performance in manufacturing companies

listed on the Indonesia Stock Exchange.

Plane

Profit

People

2088 | The Effect of CSR Disclosure On Company Performance With Ceo Proficiency As A

Moderation Variable

The research method used in this study

is inferential research type. Inferential

research is research that aims to conclude

population characteristics expressed by

population parameters in inferential

research there are parameter estimation,

hypothesis tests, and prediction of

associations between variables (Nalim &;

Salafudin, 2012).

Data Types and Sources

The data in this study is secondary

data. Secondary data is data that has been

processed by other parties whose sources

can be obtained from government

publications, internet sites, books, journals,

articles, and others. Secondary data in this

study is in the form of financial statements,

annual reports, and sustainability reports of

all companies listed on the Indonesia Stock

Exchange for the period 2019 to 2021 using

archival data collection techniques(Ajayi,

2017). Secondary data in this study was

obtained through the Indonesia Stock

Exchange website.

The data analysis method used in this

study has been explained in the next

chapter, starting with descriptive statistical

analysis, then continuing with hypothesis

testing, then classical assumption testing is

carried out to ensure the data is not biased

RESULTS AND DISCUSSION

The discussion of the research results is

based on the decision to reject or accept

the hypothesis so this sub-chapter is

intended to elaborate on the discussion of

the effect of CSR disclosure on company

performance and how the role of

moderation of CEO skills affects CSR

disclosure on company performance. This

sub-chapter will be divided into two,

namely the first to explain the effect of CSR

disclosure on company performance and

the effect of moderation of CEO proficiency

on the effect of CSR disclosure on company

performance.

The Effect of CSR Disclosure on Company

Performance

Hypothesis one in this study reads that

there is a positive influence of CSR

disclosure on company performance and

after being tested using linear regression

analysis, it is found that hypothesis one is

accepted. The results of this study support

previous research such as research from

Russo & Fouts (1997), Waddock & Graves

(1997), and Akpinar et al., (2008) which

showed that CSR disclosure can improve

company performance.

The results of hypothesis one confirm

that CSR can make the image of companies

that carry it out good and can make the

company's name good in the commodity

market and capital market. A good

company image will certainly be more

attractive to investors and increase

consumer loyalty so that the company's

performance will increase. The

implementation of CSR carried out by the

company will be able to have a positive

impact on the continuity of the company's

operations in the long term or the company

will achieve good sustainable development.

Companies that have experienced stable

growth in company performance from

Findy Rachmandika Muhammad

Sutrisno T

Muhammad Tojibussabirin

| 2089

2019 to 2021 proxied in ROA include ADES,

ALKA, ARNA, BTON, BUDI, MARK, SKBM,

SPMA, UNIC, and WOOD.

The Effect of CEO Proficiency Moderation

on the Effect of CSR Disclosure on

Company Performance

Hypothesis two states that CEO

proficiency strengthens the effect of CSR

disclosure on company performance and

after being tested by MRA regression

analysis, the results of hypothesis two were

rejected where the results of MRA

regression testing obtained the result that

the moderation of CEO proficiency weakens

the effect of CSR disclosure on company

performance. The low quality of CSR in

Indonesia causes a CEO's lack of

understanding about how CSR is

implemented besides that CSR programs

required by the government are only

limited to maintaining the company's

reputation.

Indonesia is one of the first countries

in the world to introduce laws and

regulations on CSR to ensure corporations

carry out their social responsibility. This law

is contained in Law number 40 of 2007

concerning limited liability companies

where CSR is defined as the company's

commitment to play a role in sustainable

economic development to improve the

quality of life and the environment that

benefits the company, the local community,

and society in general. (Rosser & Edwin,

2010)

CSR in its implementation is still many

companies that are "reluctant" to

implement CSR programs and are only

voluntary and many are misguided just by

distributing necessities, this is because CSR

is considered an expense that must be

made by the company and is

mathematically unprofitable as evidenced

by the determined value of the low

influence of CSR on company performance

plus the observation period made by

researchers is the period before the

pandemic, pandemic period, and post-

pandemic where companies will tend not to

do something that does not generate

profits in the short term so that the

assumption that CSR is a burden and CSR

investment will be able to be enjoyed by

the company in the future makes the CEO

lack of attention to CSR obligations that

must be carried out by the company to

fulfill obligations to stakeholders.

Companies that during the

observation period tend to experience a

decrease in company performance marked

by a decrease in ROA include AGII, AISA,

ALDO, ASII, BAJA, BRPT, CAKK, CAMP, CEKA,

CPIN, DLTA, DMND, DPNS, DVLA, EKAD,

FASW, GJTL, GOOD, HMSP, HOKI, ICBP,

IGAR, INAI, INCI, INDF, INDS, INTP, IPOL,

ISSP, JPFA, KDSI, KINO, KLBF, MDKI, MLBI,

MOLI, MYOR, PBID, PEHA, PTSN, PYFA,

SCCO, WTON.

Research Implications

The results of this research can have

implications in terms of theory, practice,

and policy. The following are some of the

implications of the results of this study.

a. Theoretical Implications

Top managerial decisions in

companies are complex by considering

many things, including how the company's

2090 | The Effect of CSR Disclosure On Company Performance With Ceo Proficiency As A

Moderation Variable

financial performance and the company's

external conditions. Managers who only

use power on CSR disclosure that aims to

gain legitimacy from stakeholders,

especially government, investors, and the

public to improve company performance

will tend to fluctuate because there will be

many factors that affect company

performance.

Stakeholders have a vital role in the

life of the company because stakeholders

have the power to manage the resources

needed in company operations so the

company must always maintain its

relationship with stakeholders. Managerial

companies that maintain their relationships

with stakeholders will carry out all their

obligations, including CSR obligations so

that this does not violate Law Number 40

of 2007.

The concept of the Resource Based

View explains that CSR is a sustained

competitive advantage or CSR is a means

to obtain a competitive advantage. This

theory states that when companies can

maximize resources to implement CSR, it

will have an impact on increasing the

company's competitive advantage, but the

fact on the ground that occurs is that in the

observation period 2019 to 2021, many

companies did not experience an increase

in company performance, which was

marked by a not too significant increase in

ROA during the period 2019 to 2021, which

resulted in that CSR was only carried out by

companies to meet obligations from

stakeholders so that management does not

focus too much on CSR activities to

improve company performance

b. Practical Implications

This research contributes to company

management that indeed the existence of

CSR can positively improve company

performance so that companies are

expected to have capable managers in the

hope of being able to utilize CSR as well as

possible because it is undeniable that CSR

is a burden incurred by the company but

with capable managerial decisions this will

be expected to be able to Improve

company performance in the form of long-

term investments.

c. Policy Implications

Based on the results of this study,

shows that CSR disclosure has a positive

effect on company performance, but when

moderated, it gives results that CEO

proficiency weakens the effect of CSR

disclosure on company performance.

Companies that carry out CSR obligations

aim to fulfill their obligations to

stakeholders so as not to violate CSR-

related regulations.

The disclosure of CSR made by the

company when referring to the GRI

standard which amounts to 157 items is still

below the items that have been regulated

in the GRI standard, this indicates that the

implementation of CSR by companies in

Indonesia is still uneven. The top

managerial or CEO also interprets CSR as a

burden borne by the company so that it

must carry out strategies to continue

implementing CSR but not to negatively

affect the company's performance. The

company's performance is not only

influenced by internal factors but also

influenced by external factors such as the

COVID-19 pandemic that hit the company

to experience a decrease in profitability so

carrying out its own CSR obligations which

are considered a burden still seems

Findy Rachmandika Muhammad

Sutrisno T

Muhammad Tojibussabirin

| 2091

perfunctory because CSR is not able to

provide benefits in the short term.

CONCLUSIONS

This study aims to empirically

examine the effect of CSR disclosure on

company performance and examine how

the role of CEO skills in moderating the

effect of CSR disclosure on company

performance. This study uses CSR Index to

measure CSR disclosure made by

companies while CEO proficiency is

measured using Data Envelopment

Analysis using the help of DEAP software.

The object of this study is all manufacturing

companies listed on the Indonesia Stock

Exchange for the period 2019 to 2021.

The findings in this study show that

empirically CSR disclosure is proven to be

able to affect company performance

observed in the observation period from

2019 to 2021 where the period before and

after the COVID-19 pandemic where all

companies, including manufacturing

companies, experience difficulties so

inevitably companies that are required to

fulfill their obligations to stakeholders must

participate in helping to recover the effects

One of them is the implementation of CSR.

Companies that implement CSR will

certainly gain positive legitimacy from

various sectors and stakeholders.

The company also has an

organizational structure where the CEO is

the managerial leader of the company who

has the right to intervene in any company

policy, including CSR. CEOs who consider

CSR a burden coupled with the COVID-19

pandemic where the company itself

experiences difficulties in company

performance marked by a decrease in ROA

value will make CEOs tend not to do or only

slightly implement CSR points in the GRI

standard which only functions so as not to

be subject to administrative sanctions from

the government. CSR which aims as a

forum for corporate social responsibility

will also affect the community as a

company partner in carrying out sales

The community that is a consumer of

the company will be an important

component for the company in a long-term

relationship. Consumer trust or loyalty to

the company is influenced by the value of

sharing. The pandemic that occurs will be

momentum for companies to share in CSR

programs to increase consumer loyalty and

attract investors and certainly lead to

improved company performance(Sarwar,

Abbasi, & Pervaiz, 2012).

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