Does Human Rights Disclosure Enhance Firm Value?
Keywords:
Firm value, Human rights disclosures, Independent Commissioners, Family ownership
Abstract
The objective of this research is to explain the effect of human rights disclosure, independent commissioners, and family ownership on firm value. We also analyzed descriptively human rights disclosures for three periods, which is from 2017-2019, in Indonesia. UNGP-BHR and the Indonesian State Law No. 39 of 1999 about Human Rights are used as the disclosure index checklist. This study uses 345 non-financial companies that are fully listed for three periods on the Indonesia Stock Exchange (IDX). The data used were collected from Bloomberg and Annual Report, which had been taken from the official website of IDX and the official website of the sample companies. The data analysis technique used to test our hypothesis is panel regression. The main result of this study showed that human rights disclosure and independent commissioners have a positive impact on firm value, while family ownership negatively affects firm value. We also found that each item of human rights disclosure increased during the observation period, in which the least disclosed item was related to engagement with external human rights experts to undertake human rights issues. The implication of this research is that increasing human rights disclosure provides a positive image for the investors and creditors.
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Alawi, N. A., & Belfaqih, H. M. (2019). Human resources disclosure: an exploratory study of the quality in Qatar. World Journal of Entrepreneurship, Management and Sustainable Development.
Al Farooque, O., Buachoom, W., & Sun, L. (2019). Board, audit committee, ownership and financial performance–emerging trends from Thailand. Pacific Accounting Review.
Alvarez, A. (2015). Corporate response to human resource disclosure recommendations. Social Responsibility Journal, Vol. 11 No. 2, pp. 306-323.
Asante-Darko, D., Adu Bonsu, B., Famiyeh, S., Kwarteng, A. and Goka, Y. (2018), "Governance structures, cash holdings and firm value on the Ghana Stock Exchange", Corporate Governance, Vol. 18 No. 4, pp. 671-685.
Badan Pusat Statistik. “Sakernas” available at https://mikrodata.bps.go.id/mikrodata/index.php/catalog/ SAKERNAS
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Cahaya, F. R., & Hervina, R. (2019). Do human rights issues matter? An empirical analysis of Indonesian companies’ reporting. Social Responsibility Journal, Vol. 15 No. 2, pp. 226-243.
Cahaya, F. R. Porter, S., Tower, G., & Brown, A. (2017). Coercive pressures on occupational health and safety disclosures. Journal of Accounting in Emerging Economies, Vol. 7 No. 3, pp. 318-336.
CNN Indonesia. (2020). “Berita harian potong gaji”, available at https://www.cnnindonesia.com/tag/potong-gaji
Cooper, S. (2017). Corporate social performance: A stakeholder approach. Taylor & Francis.
Darmadi, S. (2016). Ownership concentration, family control, and auditor choice: Evidence from an emerging market", Asian Review of Accounting, Vol. 24 No. 1, pp. 19-42.
Ham.go.id. 2018. “UNGP-BHR”. Available at: http://ham.go.id/download/guiding-principles-on-business-and-human-rights/
Ham.go.id. 2018. “UU Nomor 39 Tahun 1999”. Available at: http://ham.go.id/download/uu-nomor-39-tahun-1999/
Han, S., Nasih, M., & Harymawan, I. (2020). Human resource disclosures as management strategy to enhance its competitive success. Polish Journal of Management Studies, 21.
Hanifa, A. and Cahaya, F.R. (2016), "Ethical communication on society issues: a story from Indonesia", Journal of Global Responsibility, Vol. 7 No. 1, pp. 39-55.
Hatane, S.E., Supangat, S., Tarigan, J. and Jie, F. (2019), "Does internal corporate governance mechanism control firm risk? Evidence from Indonesia’s three high-risk sectors", Corporate Governance, Vol. 19 No. 6, pp. 1362-1376.
Harymawan, I., Nasih, M., Salsabilla, A., & Putra, F. K. G. (2020). External assurance on sustainability report disclosure and firm value: Evidence from Indonesia and Malaysia. Entrepreneurship and Sustainability Issues, 7(3), 1500-1512.
Jiang, C., & Fu, Q. (2019). A Win-Win outcome between corporate environmental performance and corporate value: From the perspective of the stakeholders. Sustainability, 11(3), 921.
Kamaliah. (2020), "Disclosure of corporate social responsibility (CSR) and its implications on company value as a result of the impact of corporate governance and profitability", International Journal of Law and Management, Vol. 62 No. 4, pp. 339-354.
Kao, M. F., Hodgkinson, L., & Jaafar, A. (2019). Ownership structure, board of directors and firm performance: evidence from Taiwan. Corporate Governance: The International Journal of Business in Society.
Kumala, R., & Siregar, S. V. (2020). Corporate social responsibility, family ownership and earnings management: the case of Indonesia. Social Responsibility Journal, Vol. 17 No. 1, pp. 69-86.
Laskar, N. and Gopal Maji, S. (2018), "Disclosure of corporate sustainability performance and firm performance in Asia", Asian Review of Accounting, Vol. 26 No. 4, pp. 414-443.
Li, Y., & Zhao, Z. (2017). The dynamic impact of intellectual capital on firm value: evidence from China. Applied Economics Letters, 25(1), 19-23.
Liew, C.Y. and Devi, S.S. (2020), "Family firms, banks and firm value: Evidence from Malaysia", Journal of Family Business Management, Vol. 11 No. 1, pp. 51-85.
Memili, E., Fang, H.C. & Welsh, D.H.B. (2015), "Value creation and value appropriation in innovation process in publicly-traded family firms", Management Decision, Vol. 53 No. 9, pp. 1921-1952.
Ojk.go.id. (2017). “POJK Nomor 51/POJK.03/2017”. Available at: https://www.ojk.go.id/id/kanal/perbankan/regulasi/peraturan-ojk/Pages/POJK-Penerapan-Keuangan-Berkelanjutan-bagi-Lembaga-Jasa-Keuangan,-Emiten,-dan-Perusahaan-Publik.aspx
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Purbawangsa, I.B.A., Solimun, S., Fernandes, A.A.R. and Mangesti Rahayu, S. (2019), "Corporate governance, corporate profitability toward corporate social responsibility disclosure and corporate value (comparative study in Indonesia, China and India stock exchange in 2013-2016)", Social Responsibility Journal, Vol. 16 No. 7, pp. 983-999.
Putra, F. K. G., Harymawan, I., Nasih, M., & Agustia, D. (2020). A quest to minimize the cost of debt by utilizing human resources disclosure. Polish Journal of Management Studies, 21.
Rajverma, A. K., Misra, A. K., Mohapatra, S., & Chandra, A. (2019). Impact of ownership structure and dividend on firm performance and firm risk. Managerial Finance, Vol. 45 No. 8, pp. 1041-1061.
Ramírez, A. A. R., & Romero, M. J. M. (2018). Required and obtained equity returns in privately held businesses: the impact of family nature—evidence before and after the global economic crisis. Review of Managerial Science, 12(3), 771-801.
Salem, I. H., Ayadi, S. D., & Hussainey, K. (2019). Corporate governance and risk disclosure quality: Tunisian evidence. Journal of Accounting in Emerging Economies, Vol. 9 No. 4, pp. 567-602.
Sitthipongpanich, T. (2017). Family ownership and free cash flow. International Journal of Managerial Finance, Vol. 13 No. 2, pp. 133-148.
Thenmozhi, M., & Sasidharan, A. (2020). Does board independence enhance firm value of state-owned enterprises? Evidence from India and China. European Business Review, Vol. 32 No. 5, pp. 785-800.
Uribe-Bohorquez, M. V., Martínez-Ferrero, J., & García-Sánchez, I. M. (2018). Board independence and firm performance: The moderating effect of institutional context. Journal of Business Research, 88, 28-43.
Wahab, A. (2020). The state of human rights disclosure among sustainably certified palm oil companies in Malaysia. The International Journal of Human Rights, 24(10), 1451-1474.
Wooldridge, J. M. (2016). Introductory econometrics: A modern approach. Nelson Education.
World Bank. (2020). “Ikhtisar”, available at https://www.worldbank.org/in/country/indonesia/overview
World Report. (2020). “Indonesia Events of 2019”, available at https://www.hrw.org/world-report/2020/country-chapters/indonesia#
Zulaikah, S., Larasati, D. A., & Harymawan, I. (2019). Government ownership, human resources disclosure, and firm performance: Evidence from the banking industry in Indonesia. International Journal of Innovation, Creativity and Change, 9(8), 238-264
Published
2022-08-24
How to Cite
Tjondro, E., Wijoyo, C., Indah, L. M., Chandra, Y., & Eoh, T. S. (2022). Does Human Rights Disclosure Enhance Firm Value? . International Journal of Organizational Behavior and Policy, 1(1), 27-36. https://doi.org/10.9744/ijobp.1.1.27-36
Section
Articles
Copyright (c) 2022 Elisa Tjondro, Clarissa Wijoyo, Livia Mei Indah, Yessica Chandra, Tonny Stephanus Eoh
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
