Corporate Governance, Corporate Social Responsibility and Financial Performance, CGPI Award in Indonesia

DOI

10.2991/aebmr.k.200915.005How to use a DOI?

Keywords

corporate governance, corporate social responsibility, financial performance, CGPI

Abstract

This study aims to determine how the influence of Corporate Governance (CG) and Corporate Social Responsibility (CSR) on the company s financial performance. The Corporate Governance Perception Index (CGPI) ranking score is used to measure the CG mechanism, seventeen goals from Sustainable Development Goals (SDGs) are used to measure CSR, and Return on Assets (ROA) are used to measure financial performance. The sample used as many as 28 companies were following CGPI program and listed in Indonesia Stock Exchange. Descriptive statistical tests, classic assumption tests and hypothesis testing are the analytical methods used in this study. The findings in this study indicate that CG has an influence on the company’s financial performance. By implementing good governance, companies tend to have higher values as well. With the Good CG, the company s performance becomes more efficient so that the company has the opportunity to generate greater profits. The next finding is that the company s financial performance is not influenced by CSR. This can be caused because in this study CSR is proxied using SDGs, where the application of SDGs as a basis for measurement in this research is still in transition so it has not yet impacted ROA because the duration of the year is still relatively new. The use of SGDs to measure CSR is a novelty of this study, while other studies usually use GRI as a measure of CSR. The relatively new SDGs implementation can be an alternative measurement for CSR which shows that the company s CSR activities are in line with the achievement of SGDs.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Felita Fabiani
AU  - Ririn Breliastiti
PY  - 2020
DA  - 2020/09/15
TI  - Corporate Governance, Corporate Social Responsibility and Financial Performance, CGPI Award in Indonesia
BT  - Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020)
PB  - Atlantis Press
SP  - 18
EP  - 22
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200915.005
DO  - 10.2991/aebmr.k.200915.005
ID  - Fabiani2020
ER  -