STAKEHOLDER PRESSURE AND BOARD COMPOSITION, THEIR INFLUENCE ON SUSTAINABILITY REPORT QUALITY

Abstract

This study investigates the impact of stakeholder pressure and board characteristics on sustainability reporting quality among Indonesian companies listed on the Indonesia Stock Exchange from 2016 to 2020. Utilizing a sample of 30 companies over a 5-year period, we employ linear regression analysis to examine the relationship between board size, board education, shareholder pressure, creditor pressure, and sustainability report quality. Our findings reveal that while board size does not significantly affect sustainability report quality, board education exerts a positive and significant influence, aligning with Upper Echelons Theory. Moreover, shareholder pressure positively correlates with report quality, indicating investors' interest in non-financial disclosures. Conversely, creditor pressure does not significantly impact report quality, suggesting prioritization of debt repayment over CSR disclosures. These results emphasize the importance of informed board leadership and stakeholder engagement in driving high-quality sustainability reporting, shedding light on avenues for future research to explore industry-specific dynamics and delve deeper into board composition characteristics.