Gender Diversity, Corporate Governance, Financial Performance, and corporate value: Lesson from Indonesian Public Company Before Covid-19

Yulita Setiawanta

doi:10.33633/jpeb.v7i2.6695

Authors

Yulita Setiawanta [SCOPUS ID: 57196195268] Fakultas Ekonomi dan Bisnis, Universitas Dian Nuswantoro

DOI:

https://doi.org/10.33633/jpeb.v7i2.6695

Abstract

This study attempted to uncover the role of gender in corporate leadership, corporate governance, and financial performance and its effect on creating corporate value. Companies listed on the Indonesia Stock Exchange with this research's 2009-2018 observation period. Samples were taken with strict criteria to find companies in the best food and beverage category and were obtained 50 observation data for ten years. The research considered this type of company directly related to basic human life and worthy of investment. The results showed that gender diversity and EPS could not create Corporate Value. Managerial Ownership, PBV, and DER were significantly able to develop Corporate Value. The results of this study were enjoyable to be examined from the perspective of the situation of organizational behavior and financial performance of public companies and be informed to potential investors or interested parties, especially the situation in Indonesia, the country with the fourth-largest population in the world or 3.51% of the total human population.Keywords: Gender Diversity, Managerial Ownerships, Earning per Share, Price to Book Value, Debt to Equity Ratio

Author Biography

Yulita Setiawanta, [SCOPUS ID: 57196195268] Fakultas Ekonomi dan Bisnis, Universitas Dian Nuswantoro

Google Scholar

References

Andhariani, Z. I. R. dan D. (2013). Pengaruh Keberagaman Gender terhahap Kinerja Keuangan Perusahaan dan Efisiensi Investasi. Paper Online Program Studi Ekstensi Akuntansi, Fakultas Ekonomi Universitas Indonesia.

Asante-Darko, D., Adu Bonsu, B., Famiyeh, S., Kwarteng, A., & Goka, Y. (2018). Governance structures, cash holdings and Corporate Value on the Ghana Stock Exchange. Corporate Governance (Bingley), 18(4), 671–685. https://doi.org/10.1108/CG-07-2017-0148

Astuti, E. P. (2017). Pengaruh Diversitas Dewan Direksi Terhadap Nilai Perusahaan pada Perusahaan Manufaktur yang terdaftar di Bursa Efek Indonesia periode 2008-2011. Kreatif - Jurnal Ilmiah Prodi Manajemen Universitas Pamulang, 4(2), 159–179.

Ayuba, H., Bambale, A. J., Ibrahim, M. A., & Sulaiman, S. A. (2019). Effects of Financial Performance, Capital Structure and Firm Size on Firms’ Value of Insurance Companies in Nigeria. Journal of Finance, Accounting and Management, 10(1), 57–74.

Balasubramanian, N., Black, B. S., & Khanna, V. (2010). The relation between fi rm-level corporate governance and market value : A case study of India. Emerging Markets Review, 11(4), 319–340. https://doi.org/10.1016/j.ememar.2010.05.001

Baranchuk, N., & Louis, S. (2015). Consensus in Diverse Corporate Boards. The Review of Financial Studies, 22(2), 715–747. https://doi.org/10.1093/rfs/hhn052

Bartlett, B. D. (2012). The Effect of Corporate Sustainability Reporting on Firm Valuation. CMC Senior Theses.

Bøhren, Ø., & Strøm, R. Ø. (2010). Governance and Politics : Regulating Independence and Diversity in the Board Room. Journal of Business Finance & Accounting, 37(May), 1281–1308. https://doi.org/10.1111/j.1468-5957.2010.02222.x

Bunkanwanicha, P., Gupta, J., & Rokhim, R. (2008). Debt and entrenchment : Evidence from Thailand and Indonesia. European Journal of Operational Research 185, 185, 1578–1595. https://doi.org/10.1016/j.ejor.2006.08.025

Burke, R. J. (2000). Company size, board size and numbers of women corporate directors! ronald 1. burke. Women on Corporate Boards of Directors, 157–158.

Byoun, S., Chang, K., Kim, Y. S., & Heights, H. (2011). Does Corporate Board Diversity Affect Corporate Payout Policy ?*. Hankamer School of Business at Baylor University., (April 2011).

Campbell, K., & Minguez-vera, A. (2007). Gender Diversity in the Boardroom and Firm Financial Performance. Journal of Business Ethics, 83(1), 435–451. https://doi.org/10.1007/s10551-007-9630-y

Carter, D. A., Simkins, B. J., & Simpson, W. G. (2003). Corporate Governance , Board Diversity , and Corporate Value. The Financial Review 38, 38.

Carter, D. A., Souza, F. D., Simkins, B. J., & Simpson, W. G. (2010). The Gender and Ethnic Diversity of US Boards and Board Committees and Firm. Corporate Governance: An International Review, 18(5), 396–414. https://doi.org/10.1111/j.1467-8683.2010.00809.x

Charness, G., & Gneezy, U. (2012). Journal of Economic Behavior & Organization Strong Evidence for Gender Differences in Risk Taking. Journal of Economic Behavior and Organization, 83(1), 50–58. https://doi.org/10.1016/j.jebo.2011.06.007

Cho, M.-H. (1998). Ownership structure, investment, and the corporate value: an empirical analysis. Journal of Financial Economics, 47(1), 103–121.

Cotter, D. A., Hermsen, J. M., Ovadia, S., & Vanneman, R. (2001). The Glass Ceiling Effect ". SocialForces, 80(2), 655–681.

Davies, J. R., Hillier, D., & Mccolgan, P. (2005). Ownership structure , managerial behavior and corporate value. Journal of Corporate Finance, 11, 645–660. https://doi.org/10.1016/j.jcorpfin.2004.07.001

Deegan, C., Rankin, M., & Tobin, J. (2002). An examination of the corporate social and environmental disclosures of BHP from 1983-1997: A test of legitimacy theory. Accounting, Auditing & Accountability Journal (Vol. 15). https://doi.org/10.1108/09513570210435861

Deswanto, R. B., & Siregar, S. V. (2017). The Association between environmental disclosure with financial performance, environmental performance, and Corporate Value. Social Responsibility Journal. https://doi.org/10.1108/09574090910954864

Donovan, G. O. (1999). Environmental disclosures in the annual report. https://doi.org/10.1108/09513570210435870

Erhardt, N. L., Werbel, J. D., & Shrader, C. B. (2003). Board of Director Diversity and Firm Financial Performance. Corporate Governance:An International Review, 11(2), 102–111. https://doi.org/10.1111/1467-8683.00011/full.This

Ernest Gyapong, R. M. M. and F. H. (2016). Do Women and Ethnic Minority Directors Influence Corporate Value ? Evidence from Post-Apartheid South Africa. Journal of Business Finance & Accounting, 43(April), 370–413. https://doi.org/10.1111/jbfa.12175

Fama, E. F., & Jensen, M. C. (1983). Separation of Ownership and Control. Journal of Law and Economics, 26(2), 301–325.

Francoeur, C., & Sinclair-desgagne, B. (2008). Gender Diversity in Corporate Governance and Top Management. Journal of Business Ethics, 81(1), 83–95. https://doi.org/10.1007/s10551-007-9482-5

Garay, U., & González, M. (2008). Corporate Governance and Corporate Value : The Case of Venezuela. Journal Compilation © 2008 Blackwell Publishing Ltd, 16(3), 194–209. https://doi.org/10.1111/j.1467-8683.2008.00680.x

Gillan, S. L. (2006). Recent Developments in Corporate Governance : An Overview. Journal of Corporate Finance, 12, 381–402. https://doi.org/10.1016/j.jcorpfin.2005.11.002

Gozali, L., Masrom, M., Haron, H. N., & Zagloel, T. M. (2017). Research Gap of Entrepreneurship, Innovation, Economic Development, Business Incubators Studies in Indonesia. International Journal of Economics and Financial Issues, 7(2), 243–248. https://doi.org/10.13140/RG.2.2.21310.89921

Gul, S., S., M. Razzaq, N., & Afzal, F. (2012). Agency cost, corporate governance and ownership structure (The case of Pakistan). International Journal of Business and Social Science, 3(9), 268–277.

Hafsi, T., & Turgut, Á. G. (2010). Boardroom Diversity and its Effect on Social Performance : Conceptualization and Empirical Evidence. Jurnal of Business Ethic, 1–21. https://doi.org/10.1007/s10551-012-1272-z

Hermawan, S., & Maf’ulah, A. N. (2014). Pengaruh Kinerja Keuangan terhadap nilai perusahaan dengan pengungkapan Corporate Social Responsibility sebagai variabel pemoderasi. Jurnal Dinamika Akuntansi, 6(2), 103–118.

Hillman, A. J., Jr, A. A. C., & Harris, I. C. (2002). Women and Racial Minorities in the Boardroom : How Do Directors Differ ? Journal of Management -Pergamon-Elsevier, 28(6), 747–763.

Holderness, C. G. (2003). A Survey of Blockholders and Corporate Control. Economic Policy Review -Social Science Electronic Publishing, 1–14.

HT, H. A., & Miftahurrohman. (2014). Pengaruh Struktur Kepemilikan Saham, Kebijakan eviden dan Kebijakan Hutang Terhadap Nilai Perusahaan (Studi Pada Perusahaan Yang Terdaftar di BEI). Jurnal Etikonomi, 13(2), 148–163.

Huse, M., & Hagen, I. M. (2009). Women and Employee-Elected Board Members , and Their Contributions to Board Control Tasks. Journal of Business Ethics, 89(1), 581–597. https://doi.org/10.1007/s10551-008-0018-4

Imam Ghozali, H. L. (2012). Partial Least Square “Konsep, Teknik dan Aplikasi. Badan Peneribit Universitas Diponegoro.

Indrasti, A. W., & Martini. (2014). Pengaruh Struktur Kepemilikan Saham dan Corporate Social Responsibility terhadap Nilai Perusahaan. Jurnal Akuntansi Dan Keuangan, 3(2), 115–133.

Isidro, H., & Sobral, M. (2014). The Effects of Women on Corporate Boards on Corporate Value , Financial Performance , and Ethical and Social Compliance. Springer Science+Business Media Dordrecht. https://doi.org/10.1007/s10551-014-2302-9

Jeffrey Pfeffer, G. S. (1978). The External Control of Organizations: A Resource Dependence Perspective. Harper & Row.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial

Economics, 3(4), 305–360. https://doi.org/http://dx.doi.org/10.1016/0304-405X(76)90026-X

Kartikaningrum, S. D. (2016). Pengaruh Karakteristik Dewan Direksi terhadap Kinerja Keuangan Bank Syariah di Indonesia. Paper Onlie Jurusan Perbankan Syariah Fakultas Ekonomi Dan Bisnis Institut Agama Islam Negeri Salatiga.

Karuna, C. (2009). CEO reputation and internal corporate governance. Business, (October), 1–55. https://doi.org/10.2139/ssrn.1004227

Kesner, I. F. (2014). Directors’ Characteristics and Committee Membership: An Investigation of Type, Occupation, Tenure, and Gender. The Academy of Management Journal, 31(1), 66–84.

Kusumawardani, A. (2011). Analisis pengaruh EPS,PER,ROE,FL,DER,CR,ROA pada harga saham dan dampaknya terhadap kinerja perusahaan Lq45 yang terdaftar di BEI periode 2005-2009. Paper Online Universtas Gunadarna2, 1–17.

Kuzey, C., & Uyar, A. (2017). Determinants of sustainability reporting and its impact on Corporate Value: Evidence from the emerging market of Turkey. Journal of Cleaner Production, 143, 27–39. https://doi.org/10.1016/j.jclepro.2016.12.153

Lee, M., & Hwang, H. (2012). The Interaction Effects of Corporate Value , Managerial Ownership Retention , Earnings Forecasts and Earnings Management. Business and Management Research, 1(2), 94–112. https://doi.org/10.5430/bmr.v1n2p94

Li, M. (2009). The Customer Value Strategy in the Competitiveness of Companies. International Journal of Busines and Management, 4(2), 136–141.

Lindblom, C. (1994). The implications of organizational legitimacy for corporate social performance and disclosure. In critical prespective on accounting conference. New York-USA.

Liu, Y., Wei, Z., & Xie, F. (2013). Do Women Directors Improve Firm Performance in China? Journal of Corporate Finance. https://doi.org/10.1016/j.jcorpfin.2013.11.016

Lu, Y., & Abeysekera, I. (2014). Stakeholders â€TM power , corporate characteristics , and social and environmental disclosure : evidence from China. Journal of Cleaner Production, 64(1), 426–436.

Mahmood, Z., Kouser, R., Ali, W., Ahmad, Z., & Salman, T. (2018). Does corporate governance affect sustainability disclosure? A mixed methods study. Sustainability (Switzerland), 10(1), 1–20. https://doi.org/10.3390/su10010207

Marianne Bertrand, P. M. and S. M. (2014). Ferreting Out Tunneling : An Application to Indian Business. He Quarterly Journal of Economics, 117(1), 121–148.

McConnell, D. K. D. and J. J. (2010). International Corporate Governance. The Journal of Financial and Quantitative Analysis, 38(1), 1–36.

Morck, R., Shleifer, A., & Vishny, R. W. (1988). Managerial Ownerships and market Valuation * An Empeirical Analysis. Journal of Financial

Economics, 20, 293–315.

Niccolo Gordini, E. R. (2017). Gender diversity in the Italian boardroom and firm financial performance. Management Research Review_Emerald, 40(1).

Ntim, C. G. (2013). Board diversity and organizational valuation : unravelling the effects of ethnicity and gender. Springer Science+Business Media New York 2013. https://doi.org/10.1007/s10997-013-9283-4

Nurdin, D., & Kasim, M. Y. (2017). Moderator Effect of Corporate Governance on the Relationship of Financial Performance and Dividend Policy , and Its Impact on Corporate Value in Indonesia Stock Exchange International Journal of Economics &. International Journal of Economics & Managementy Sciences, 7(1), 1–7. https://doi.org/10.4172/2162-6359.1000499

Oakley, J. G. (2000). Gender-based Barriers to Senior Management Positions : Understanding the Scarcity of Female CEOs. Journal of Business Ethics, (1994), 321–334.

Orazalin, N., Mahmood, M., & Jung Lee, K. (2016). Corporate governance, financial crises and bank performance: lessons from top Russian banks. Corporate Governance: The International Journal of Business in Society, 16(5), 798–814. https://doi.org/10.1108/CG-10-2015-0145

Pujiati, D., & Widanar, Er. (2008). Pengaruh struktur kepemilikan terhadap nilai perusahaan: keputusan keuangan sebagai variabel intervening, 1–24.

Rahma, A. (2014). Pengaruh Kepemilikan Manajerial, Kepemilikan Institusional dan Ukuran Perusahaan terhadap Keputusan Pendanaan dan Nilai Perusahaan ( Studi Kasus Pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Periode 2009-2012 ). Jurnal Bisnis Strategi, 23(2), 45–69.

Ratri, R. F., & Dewi, M. (2017). The Effect of Financial Performance and Environmental Performance on Corporate Value with Islamic Social Reporting (ISR) Disclosure as Intervening Variable in Companies Listed at Jakarta Islamic Index (JII). SHS Web of Conferences, 34(4), 12003. https://doi.org/10.1051/shsconf/20173412003

Renee B. Adams, D. F. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics Journal, 94, 291–309. https://doi.org/10.1016/j.jfineco.2008.10.007

Rose, C. (2007). Does female board representation influence firm performance ? The Danish evidence. Corporate Governance, 15(2), 404–413.

Ruan, W., & Tian, ; Gary and Shiguang Ma. (2011). Managerial Ownership and Corporate Value: Evidence from China’s Civilian-run Firms. School of Accounting and Finance University of Wollongong, NSW, 2522, (January).

Schwarz, A. (2015). Joko Widodo : A New Paradigm for Indonesian Leadership ? A USINDO Special Open Forum with Adam Schwarz Co-Founding Partner and Chief Executive Officer-Asia , Adam Schwarz ’ S RemarksExecutive Officer-Asia , Adam Schwarz ’ S Remarks, February,(The United States – Indonesia Society usindo.org).

Setiawanta, Y. (2016). Profitabilitas, likuiditas dan nilai perusahaan. Jurnal Penelitian Ekonomi Dan Bisnis, 1(2), 151–163.

Setiawanta, Y., & Purwanto, A. (2019). Stakeholder power, Sustainability Reporting, and Corporate Governance: A Case study of Manufacturing Industry at Indonesia’s Stock Exchange. Scientific Papers of The University of Pardubice Series D, 46(2), 147–158.

Smith, N., Smith, V., & Verner, M. (2006). Do women in top management affect firm performance ? A panel study of 2 , 500 Danish firms. International Journal of Productivity and Performance Management, 55(7), 569–593. https://doi.org/10.1108/17410400610702160

Sofyaningsih, S., & Hardinigsih, P. (2011). Struktur Kepemilikan, Kebijakan Deviden, Kebijakan Utang dan Nilai Perusahaan. Dinamika Keuangan Dan Perbankan, 3(1), 68–87.

Srinidhi, B. I. N., Gul, F. A., & Tsui, J. (2011). Female Directors and Earnings Quality *. Contemporary Accounting Research, 28(5), 1610–1644. https://doi.org/10.1111/j.1911-3846.2011.01071.x

Staden, C. J. Van, & Hooks, J. (2007). A comprehensive comparison of corporate environmental reporting and responsiveness, 39, 197–210. https://doi.org/10.1016/j.bar.2007.05.004

Suchman, M. C. (1995). Managing Legitimacy : Strategic and Institutional Approaches. C Academy of Management Review, 20(3), 571–610.

Sucuahi, W., & Cambarihan, J. M. (2016). Influence of profitability to the Corporate Value of diversified companies in the Philippines. Accounting and Finance Research, 5(2), 149–153. https://doi.org/10.5430/afr.v5n2p149

Sukirni, D. (2012). Kepemilikan Manajerial, Kepemilikan Institusional, Kebijakan Deviden dan Kebijakan Hutang Analisis terhadap Nilai Perusahaan. Accounting Analysis Journal, 1(2).

Tandiyo, M. A., & Stephanus, D. S. (2014). Telaah Nilai Perusahaan Berdasarkan Struktur Kepemilikan. Jurnal Akuntansi Multiparadigma, 5(1), 1–17.

Tedi Rustendi, F. J. (2008). Pengarfuh HUtang dan Kepemilikan Manajerial terhadap Nilai Perusahaan pada Perusahaan Manufaktur ( Survey pada Perusahaan Manufaktur yang Tercatat di Bursa Efek Jakarta ). Jurnal Akuntansi FE Unsili, 3(1), 411–422.

Terjesen, S., Sealy, R., & Singh, V. (2009). Women Directors on Corporate Boards : A Review and Research Agenda. Corporate Governance: An International Review, 17(3), 320–337. https://doi.org/10.1111/j.1467-8683.2009.00742.x

Tharenou, P., Latimer, S., & Conroy, D. (2014). How Do You Make It to the Top? An Examination of Influences on Women’s and Men’s Managerial Advancement. The Academy of Management Journal, 37(4), 899–931.

Tristiarini1, N., Utomo1, S. D., & Setiawanta1, Y. (2019). The Capability of Risk as a Corporate Reputation Driver to increase Market Value.

QUALITY Access to Success, 20(168), 54.

Vicki W. Kramer, Alison M. Konrad, S. E. (2006). Critical Mass on Corporate Boards : Why Three or More Women Enhance Governance Executive Summary. The Wellesley Centers for Women’s Publications Office (781 283-2510) and Also at Its Website at http://www.wcwonline.org/pubs/title.php?id=487.

Walt, N. Van Der, & Ingley, C. (2003). Board Dynamics and the Influence of Professional Background , Gender and Ethnic Diversity of Directors *. Corporate Governance, 11(3), 218–234.

Welim, M. F., & Ch.Rustiti. (2015). Pengaruh Kepemilikan Manajerial dan Kepemilikan Institusional terhadap Nilai Perusahaan (Studi empiris pada Perusahaan Perbankan yang Terdaftar di BEI). Program Studi Akuntansi Fakultas Ekonomi Universitas Atmajaya Jogjakarta, 1–14.

Williams, R. J. (2003). Women on Corporate Boards of Directors and their Influence on Corporate Philanthropy. Journal of Business Ethics, 42(1), 1–10.

Woodward, D., Edwards, P. A. M., & Birkin, F. (2001). Some Evidence on Executives’ Views of Corporate Social Responsibility. British Accounting Review, 33(1), 357–397. https://doi.org/10.1006/bare.2001.0165

Yuslirizal, A. (2018). Pengaruh Kepemilikan Manajerial, Kepemilikan Institusional, Growth, Likuiditas dan Size terhadap Nilai Perusahaan pada Industri Tekstil dan garmen di Bursa Efek Indonesia. Magister Manajemen Pasca Sarjana Universitas Tadulako Palu, 116–126.

Zuhroh, I. (2019). The Effects of Liquidity, Firm Size, and Profitability on the Corporate Value with Mediating Leverage. In The 2nd International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP) Theme: “Sustainability and Socio Economic Growth” , KNE Social Sciences, (Vol. 2, pp. 203–230). https://doi.org/10.18502/kss.v3i13.4206