The Role of the Independent Board of commissioners, Ownership, and Accountant Reputation on Social Disclosure: Case of Emerging Market

Nor Hadi; Adelina Citradewi; Ifada Retno Ekaningrum; Agus Triyani; Suhita Whini Setyahuni

doi:10.33633/jpeb.v10i1.11933

Authors

Nor Hadi Faculty of Economic and Business, IAIN Kudus, Central Java
Adelina Citradewi Faculty of Economic and Business, IAIN Kudus, Central Java
Ifada Retno Ekaningrum Faculty of Economic and Business, Wahid Hasyim University, Central Java
Agus Triyani Faculty of Economic and Business, Wahid Hasyim University, Central Java
Suhita Whini Setyahuni Faculty of Economics and Business, Dian Nuswantoro University, Central Java

DOI:

https://doi.org/10.33633/jpeb.v10i1.11933

Keywords:

Social responsibility, Independent Board of Directors, Public Accountant, Public Ownership Proportion, Legitimacy, Social Disclosure

Abstract

This study aimed to examine the effect of an independent board of commissioners, public accountant reputation, and public ownership proportion on social disclosure which is the purpose of the agency and legitimacy theory testing. It was carried out on the energy, manufacturing, and basic material companies listed on the Indonesian stock exchange in 2021. The sample of this study were 55 companies selected using a purposive random sampling technique. Sample were selected based on the criteria of CSR reporting availability. The ordinary least square was used to test the hypotheses. The testing result showed that public accountants and the proportion of share ownership by the public have a significant effect on social disclosure. This is due to the existence of public accountants and diversified ownership by the public increasing the supervision; as there is a quality assurance and the involvement of several parties in supervision. However, this research proved that the independent board of commissioners does not have a significant effect on social disclosure. This is because, in developing countries such as Indonesia, the role and function as well as compromising attitudes towards CEOs often take place. The distinction of this research showed that problems of agency and legitimacy theory often takes place due to permissiveness, politeness, and reluctance culture which extends to professional work matters. This study has limitations in variable measurement. Therefore, further studies should measure other variables related to the effectiveness of monitoring

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