The Effect of Risk Governance on Financial Performance with Moderation of Top Management Team Diversity
Kata Kunci:
Risk Governance, Profitability, Age Diversity, Gender Diversity, Corporate Governance, Risk Management, Manufacturing Sector, Indonesia Stock Exchange, Sustainability IntegrationAbstrak
This study analyzes the impact of risk governance on financial performance, specifically focusing on profitability, with the moderating role of top management team diversity in terms of age and gender. The research uses a purposive sampling method with a sample of 66 companies from the basic chemical manufacturing sector listed on the Indonesia Stock Exchange (IDX) for the period 2018-2022. Data were collected from annual reports, financial statements, and sustainability reports published by these companies, covering information on sustainability disclosure, risk management, corporate governance (CG), and elements of the risk governance framework (RGOV), which include governance at the board of directors (BOD) level, board of commissioners (BOC) level, and risk management processes. indicate that overall risk governance has a positive influence on profitability, although not statistically significant. Governance at the board of directors level has a significant positive effect on profitability, while governance at the management level and risk processes show no significant impact. Age diversity was found to have a significant positive influence on profitability, whereas gender diversity showed no significant effect. Furthermore, age and gender diversity did not moderate the relationship between risk governance and profitability. These findings are expected to provide insights into how management team diversity can improve the effectiveness of risk governance and the company's profitability
Referensi
Anis, I., Gani, L., Hermawan, A. A., & Adhariani, D. (2021). Sustainability awareness institusi perbankan di Indonesia dan implikasinya terhadap efisiensi operasional. Sustainability Awareness Institusi Perbankan Di Indonesia Dan Implikasinya Terhadap Efisiensi Operasional, Agustus, 1–29.
Anis, Idrianita and Avrilia, Vera (2024) "Analyzing the Impact of ESG Principles on Corporate Performance: Incorporating Fixed Capital Considerations into the Sustainability Balanced Scorecard” Jurnal Akuntansi dan Keuangan Indonesia: Vol. 21: Iss. 1, Article 5.
DOI: 10.21002/jaki.2024.05
Anis, I., Arsjah, R. J., Hartini, H., Tektona Agni, M., & Joseph, C. (2024). Unlocking Investment Efficiency: Exploring ESG Practices through Management Control System Dynamics. The Indonesian Journal of Accounting Research. Retrieved from https://www.ijar-iaikapd.or.id/index.php/ijar/article/view/754
Anis, I., Arsjah, R. J., & Hartini, H. (2024). The Role of Interactive Control Systems in Strengthening ESG Practices and Investment Efficiency: MCS-LOC Insights. Jurnal Akuntansi dan Keuangan Indonesia. Retrieved from https://scholarhub.ui.ac.id/jaki/vol21/iss2/2/
Ansel, A., & Torfing, J. (2022). Adaptive governance: Socio-ecological and institutional approaches. Cambridge University Press.
Arouri, M., & Pijourlet, G. (2015). CSR performance and the value of cash holdings: International evidence. https://doi.org/10.3390/su132212689
Cheuk, et al. (2018). Board diversity and its impact on sustainability performance. DOI:10.6007/IJARAFMS/v13-i2/17795
Dadaboyev, S. M. U., Paek, S., & Choi, S. (2024). Do gender, age and tenure matter when behaving unethically for organizations: Meta-analytic review on organizational identity and unethical pro-organizational behavior. Baltic Journal of Management Vol. 19 No. 1, 2024 pp. 1-18 Emerald Publishing Limited doi.org/10.1108/BJM-12-2022-0480
Dissanayanke, T., & Ajward, R. (2019). The Impact of Board Characteristics on Level of Sustainability Disclosure: Evidence from Listed Companies of Sri Lanka. Conference: 2019 International Conference On Business Innovation (ICOBI)At: NSBM Green University
Donaldson, L. (2001). The contingency theory of organizational design. Springer. https://doi.org/10.1007/0-387-34173-0_2
Dou, et al. (2023). Sustainability strategies in risk management of the chemical industry. Operations Management for Environmental Sustainability Operational Measures, Regulations and Carbon Constrained Decisions. Springer. https://doi.org/10.1007/978-3-031-37600-9
Dworkin, Terry Morehead and Schipani, Cindy A., The Role of Gender Diversity in Corporate Governance (December 1, 2018). 21 University of Pennsylvania Journal of Business Law 105 (2018), Ross School of Business Paper No. 1391, Available at SSRN: https://ssrn.com/abstract=3369660 or http://doi.org/10.2139/ssrn.3369660
Eccles, R., et al. (2012). Integrated reporting for sustainable business practices. Harvard Business Review. ISBN: 978-1-119-19996-0
Felisha, F., & Rossieta, H. (2017). Is Environmental Performance Valued by Investors? The Case of Indonesian Listed Companies. https://doi.org/10.2991/iac-17.2018.46
Financial Services Authority. (2003). Building a framework for operational risk management: The FSA’s observations. Financial Services Authority.
Hambrick, D., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review.
Jarurat, & Dampitakse, A. (2021). The Effect of Corporate Governance on the Board of Directors’ Characteristics and Sustainability Disclosure: An Empirical Study from Thailand. http://dx.doi.org/10.13106/jafeb.2021.vol8.no12.0191
Karyani, A. (2019). Risk governance and bank profitability in ASEAN-5: a comparative and empirical study. https://doi.org/10.1108/IJOEM-03-2018-0132
Kaplan, R.S., & Mikes, A. (2012). Managing Risks: A New Framework. Harvard Business Review.
Komite Nasional Kebijakan Governance. (2021). Pedoman Umum Governansi Korporat Indonesia (PUGKI).
Otoritas Jasa Keuangan. (2017). POJK No. 51/POJK.03/2017 tentang Keuangan Berkelanjutan.
Pahl-Wostl, C. (2009). A conceptual framework for analysing adaptive capacity and multi-level learning processes in resource governance regimes. https://doi.org/10.1016/j.gloenvcha.2009.06.001
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press.
Rohaida, N., et al. (2020). The Influence of Board Diversity on Environmental Disclosures and Sustainability Performance in Malaysia. https://doi.org/10.32479/ijeep.9508
Schoenmaker, D. (2017). Principles of sustainable finance. Oxford University Press.
Schaltegger,S., Windolph, SE, Harms, D., Horish, J. (2014) Corporate Sustainability in International Comparison. State of Practice, O
Sutra Tanjung, P. R. (2021). The effect of good corporate governance, profitability, and company size on sustainability report disclosure. https://doi.org/10.36713/epra8161
Uyar, A., Kilic, M., Koseoglu, M. A., & Kuzey, C. (2020). The link among board characteristics, corporate social responsibility performance, and financial performance: Evidence from the hospitality and tourism industry. Tourism Management Perspectives. https://doi.org/10.1016/j.tmp.2020.100714
Wahyudi, S. M. (2021). The Effect of Corporate Governance and Company Characteristics on Disclosure of Sustainability Report Companies. European Journal of Business and Management Research, 6(4), 94–99. https://doi.org/10.24018/ejbmr.2021.6.4.929
Wegge, J., Roth, C., Neubach, B., Schmidt, K.-H., & Kanfer, R. (2008). Age and gender diversity as determinants of performance and health in a public organization: The role of task complexity and group size. Journal of Applied Psychology, 93(6), 1301–1313. https://doi.org/10.1037/a0012680
