Presenters: Indriyani, Fitri Laela Wijayati
Affiliation: Raden Mas Said State Islamic University Surakarta
Room: 11
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, Indriyani and Fitri Laela Wijayati from Raden Mas Said State Islamic University Surakarta presented their study titled “The Effect of Board Gender Diversity on Sustainability Reporting Practices: With Profitability as a Moderating Variable (Empirical Study on Non-Financial Companies Listed on the Indonesia Stock Exchange for the Period 2020-2022).” The session, held in Room 11, explored the relationship between board gender diversity and sustainability reporting practices.
The research aimed to evaluate how gender diversity on the board of directors and the board of commissioners impacts sustainability reporting practices among non-financial companies listed on the Indonesia Stock Exchange (IDX). Using the Global Reporting Initiative (GRI) G4 Index to measure sustainability reporting with a total of 91 indicators, the study analyzed data from 65 companies for the period 2020-2022.
Key findings from the study include:
- Board of Directors: Gender diversity within the board of directors was found to have no significant effect on sustainability reporting practices. This suggests that the presence of diverse genders in the boardroom does not directly influence the extent or quality of sustainability disclosures.
- Board of Commissioners: In contrast, gender diversity on the board of commissioners had a significant impact on sustainability reporting practices. This indicates that gender diversity in this governance body positively affects how companies report on sustainability issues.
- Profitability as a Moderating Variable: Profitability was found to moderate the relationship between the gender diversity of both the board of directors and the board of commissioners on sustainability reporting practices. This means that the effect of gender diversity on sustainability reporting is influenced by the company’s profitability, suggesting that more profitable companies may leverage gender diversity to enhance their sustainability disclosures.
Indriyani and Wijayati’s research provides valuable insights into the role of gender diversity in sustainability reporting, emphasizing the significance of the board of commissioners over the board of directors in driving sustainability practices. Their findings suggest that while gender diversity on the board of directors may not impact sustainability reporting directly, it is crucial in the context of the board of commissioners and interacts with profitability in shaping reporting practices.
The study contributes to the broader discussion on corporate governance and sustainability, offering practical implications for companies aiming to improve their sustainability reporting through enhanced gender diversity and understanding the role of profitability in this dynamic.