Corporate social responsibility mediates corporate governance index and financial performance in Indonesia

Luk Luk Fuadah, - and Anton Arisman, - and Dr. Rulyanti Susi Wardhani, S.E., M.Si., - and Anggraeni Yunita, S.E., M. Si., - (2019) Corporate social responsibility mediates corporate governance index and financial performance in Indonesia. Academy of Accounting and Financial Studies Journal, 23 (1). pp. 1-8. ISSN 1096-3685

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Abstract

The aim of this study is to investigate the impact in Indonesia between: (a) the Indonesian Index of Corporate Governance, (b) corporate social responsibility, and (c) financial performance. The sample is companies in the Indonesia Institute for Corporate Governance (IICG). This study uses secondary data from the annual reports from 2014 to 2016. Our first result shows a significant impact between corporate governance and financial performance. Our second result shows that corporate governance has a significant effect on corporate social responsibility. However, our final result shows that corporate social responsibility does not significantly affect financial performance. Regulation by the government, namely the Indonesian Index of Corporate Governance (IICG), which is currently voluntary, in the future may become compulsory. There are two limitations of this study. The first limitation is that not all companies joined Indonesian Institution for Corporate Governance (IICG). The second limitation is that corporate social responsibility apparently does not mediate between index of corporate governance and financial performance

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