The Influence of Good Corporate Governance Implementation

and Corporate Social Responsibility Disclosure

on Financial Performance
(Food and Beverage Companies listed on Indonesia Stock Exchange, 2013-2015)

International Conference on
Family Business & Entrepreneurship 2018

Rilla Gantino
Endang Ruswanti
Taufiqur Rachman
 Introduction
Implementation
of GCG

To Improvement Shareholder will

Corporate Walfare continue invest
Performance to increase proift

Reduce A
symetries
Provide Assurance : Information
1. companies be able
to return loan
2. Well plan and (Solomon, 2007: 336).
control activities
 Cont…..
Listed companies Must have Good Acc
(including F&B Information system
Companies in Indonesia quality who will provide
Stock Exchange facing good information quality
comptetion

Financial statement Qualitative characteristics

of AAA :
1. AAA : Relevance, Verifiability, Freedom
from bias, quantifiability
Competition is one of
2. APB Statement 2 : relevance,
contingency variables who
understandability, Veriafiability,
need good information quality
neutrality, timelines, comparability,
completeness
 Cont…..
Listed companies Management Accounting
(including F&B Competition is one of Information System designed
Companies in contingency variables with environmental
Indonesia Stock who need good uncertainty concideration
Exchange facing information quality have impact on performance
comptetion

Chenhall & Morris, 1986; Chia, 1995; Chong

& Chong, 1997; Chong, 1998; Muslichah,
2003; Hammad & Juzoh, 2007; Jusoh, 2008;
Ritonga, 2009, Rilla, 2015, Rilla et al 2017).
 Cont…..
1. "There is one and only one of
To improve the social responsibility of
performance can be Corporate Social business - to use its resources
through increase Responsibility and engage in activities. And
sales / revenue free competition without
deception or fraud (Friedman,
1970)”.
2. Porter and Kramer (2006)
CSR Implementation have positive explains that Companies are
effect on performance : clearly understood the
HuangLin et al, 2009; importance of CSR, integrated
Simionescu and Gherghina, 2014; and CSR practices into their core
Ho et al, 2016 business strategies on a
voluntary basis.
This study to analys influence of Corporate Social Responsibility
Disclosure, Implementing Good Corporate Governance on
Performance (Food and Beverage companies listed on Indonesia
Stock Exchange in 2013-2015).

The objective of the study are as follow:

1. To determine the effect corporate responsibility
disclosure on performance
2. To determine the effect good corporate governance
implementation on performance
3. To determine the effects good corporate governance
implementation on performance moderated by
corporate social responsibility.
 Literature Review

1. Corporate Social Responsibility

a. Jutterstrom and Norbergh (2013: 5-8) :
a company's integrated responsibility for three areas: environment, working conditions
and human rights. CSR can create business opportunities for companies; CSR function
as a legitimacy-creating idea and CSR is profitable.

b. Kotler and Maon (2016: 373) explains that the results of research from Margolis
and Walsh resulted that CSR has a positive impact effect on performance.

H1 : CSR have positif impact on financial performance

 Literature Review
2. Good Corporate Governance

Solomon (2007: 336) states that corporate governance is one key element in improving
economic efficiency and growth as well as enhancing investor trust.

Corporate governance involves a set of relationships between a company's

management, its board, its shareholders and other stakeholders. It is further explained
that GCG should provide proper incentives for the board and management to pursue
objectives that are in the interest of the company and its shareholders and should
facilitate with effective monitoring.

H2 : Corporate governance have positive impact on financial

performance
 Literature Review

3. GCG, CSR on Perfomance

a. Agyemang and Ansong (2017) studied CSR at SMEs, the results showed that with
improved corporate social responsibility practices, better translated into improved
financial performance

a. Fiori et al (2007) resulted that CSR was influential but not significant to firm
performance (stock price) Cochran and Wood (1984) found that CSR related to
finance Performance.
 Literature Review

c. Fernando (2009: 310), the development of CSR reflects the growing expectation of
the community and stakeholders about the evolving role of companies in society
and the response of companies of environmental, social and economic pressures.
Through voluntary commitment to CSR, companies are hoping to send a positive
signal of their behavior to their various stakeholders (employee, shareholders,
investors, consumers, regulators, NGOs, and the government) and in so doing
make an investment in their future and help to increase profitability. One that
encourages the evolution of CSR is the transparency of business activities brought
about by the media and modern information and communication technologies

H3 : Crporate governance have positive impact on financial performance

moderated by CSR
 RESULT : F & B and R&E
Descriptive Statistic
F&B
CSR disclosure 19%, an average is 7.67%, average ROA is 16.3% and ROA
maximum is 88.5%, the average value of sales growth is 48.99% (49%) and the
maximum of sales Growth is very high, 1126% and the average value of EPS is Rp
2,931 and the maximum EPS is Rp 55,576.
R&E
amaximum CSR disclosure of 20.3% with an average of 8.24% , average ROA is
9.51% and maximum ROA is 31.6%, the average value of sales growth is 18% and the
maximum of sales growth is 298.7% and the average value of EPS is Rp 146.15 and
the maximum EPS is Rp 1199
 CSR on Performance
F&B
1. the effect of CSR on ROA is negative
and not significant
ROA= -2.64 + (-0.170)CSR
2. the effect of CSR on sales growth is
negative and not significant
Growth of Sales = -2.544 + (-0.224)CSR
3. the effect of CSR on EPS is negative and
not significant
EPS = 3.798 + (-0.570)CSR
R&E
1. the effect of CSR on ROA is
negative and significant
ROA = -2.026 + (-6.830)CSR
2. CSR on sales growth is positive and
not significant
Growth of Sales = -2.305 + 4.902CSR
3. CSR on EPS is negative and not
significant
EPS = 4.476 + (-7.508)CSR
 GCG on Performance
F&B R&E
1. GCG has a significant negative effect 1. GCG has a negative effect is not
on ROA. significant to ROA.
ROA = 1.433 + (-0.148)GCG ROA = 11.823 + (-1.212)GCG
2. GCG has a negative and insignificant 2. GCG is negative and not significant
effect influenced
Growth of Sales = 1.622 + (-0.237)GCG Growth of Sales = 1.275 + (-0.0037)GCG
3. GCG has negative and insignificant effect 3. GCG has positive and significant
on EPS effect to EPS
EPS = 3.398 + 0.143GCG
EPS = 4.739 + (-0..124)GCG
 GCG on Performance moderated by CSR
F&B R&E
1. GCG has a significant positive effect on 1. GCG has a negative effect and not
ROA significant to ROA
ROA = -15.809 + 5.512 GCGCSR ROA = 12.007 + (-18.569) GCGCSR
2. GCG has a positive effect is not significant
2. GCG has a negative and insignificant
on sales growth
effect on sales growth
Growth of Sales = 1.281 + 0.099 GCGCSR
Growth of Sales = -5.745 + (-2.423) GCGCSR
3. GCG has a positive effect is not significant
3. GCG has a positive and significant effect
to EPS
on EPS EPS = 4.020 + 3.185 GCGCSR
EPS = -40.471 + 14.055 GCGCSR
 Conclusion
• H1 : CSR have a positive impact on financial
performance. For F&B, H1 rejected but for R&E,
CSR have a prositive impact only growth of sale and
EPS .
• H2 : Corporate governance have a positive impact on
financial performance. For F&B, H2 rejected. For
R&E, corporate governance have a positive impact
on financial performance only on EPS.
• H3 : Corporate governance have a positive impact
on financial performance moderated by CSR. For
F&B sectors, H3 accepted on ROA and EPS. For R&E,
H3 accepted only on growth of sales and EPS
implementation of GCG in the F&B sector have impact on
ROA and EPS than without CSR disclosure. The industry
characteristics of the B & F sector were strongly influenced by
economic conditions. The economic condition that causes the
purchasing power of the society is reduced because the price
becomes expensive because inflation will reduce the purchasing
ability of the consumer so that the implementation of GCG
moderated by CSR disclosure does not make the sales growth
will increase. Therefore companies in the F & B sector should
not make CSR as one of the strategies to increase sales.
Implementation of GCG on R&E sector moderated by CSR
disclosure had a better effect than without CSR disclosure on
sales growth and EPS. The characteristics of the RE industry
sector are related to the provision of primary needs from
consumers, so CSR disclosure will have a positive effect on
sales growth and EPS. Economic conditions that experienced
inflation did not have a big effect on consumers' desire to buy a
house. Therefore companies in the RE sector will be highly
accepted by consumers if implementing GCG and CSR.
 THANK YOU
any question please send to rilla.gantino@esaunggul.ac.id

International Conference on
Family Business & Entrepreneurship 2018

Rilla Gantino
Endang Ruswanti
Taufiqur Rachman