Do the Corporate Governance Framework Mechanism Affect Sustainability Reporting in Food Beverage Companies?

Abstract

This study aims to examine the influence of corporate governance mechanisms on sustainability reporting within food and beverage (F&B) companies listed on the Indonesia Stock Exchange for the 2021–2024 period. The research is motivated by increasing stakeholder demands for transparency regarding environmental, social, and governance (ESG) disclosures, as well as the significance of sustainability reporting as a form of legitimacy for a company’s internal responsibilities—reflected in its business strategy and long-term sustainability. The study utilizes secondary data obtained from companies' financial and sustainability reports. Panel data regression analysis is employed to test the impact of the independent variables—specifically corporate governance mechanisms, comprising board size, the presence of female directors, independent directors, and foreign directors—on sustainability reporting. The findings indicate that corporate governance mechanisms do not influence the level of sustainability reporting. None of the governance variables were found to have a significant effect on promoting sustainability reporting within these companies. Consequently, the implementation of corporate governance roles, particularly within the F&B sector, has yet to effectively enhance sustainability reporting.
Keywords: sustainability reporting; female, independent and foreign directors; ESC.