The Role of Women on Boards as A Mechanism to Improve Carbon Emission Disclosure and Firm Value

Abstract

This study investigates the role of women on boards as a mechanism to improve carbon emission disclosure, as a mediating effect influence on firm value. The population includes 122 nonfinancial companies listed on the Indonesia Stock Exchange from 2015 to 2019. The results of path analysis reveal that women on boards have a positive and significant effect on carbon emission disclosure, a positive but insignificant effect on firm value, and that carbon emission disclosure is pivotal in mediating women on boards and firm value. This study provides insights that persuade companies to maintain relationships with stakeholders by implementing environmental awareness and disclosing sustainability reports. Carbon emission disclosure as part of the sustainability report is a form of good corporate action in maintaining the balance of living systems on earth.
 Keywords: women on boards, carbon emissions disclosure, firm value

Public Ownership and Firm Value: Mediation Role of Carbon Emissions Disclosure

“…The firm value used is measured by using Tobin's Q modified by (Gaio and Raposo, 2011) in the form of Simple Q because of the difficulty in estimating the market value of debt and replacement costs. The use of this measuring instrument has been used by several previous studies, including (Kelvin et al, 2017;Daromes et al, 2021). Tobin's Q calculation formula is: = value of Tobin's Q for firm i in year t BVAi,t = book value of total assets for company i in year t MVEi,t = market value of equity for firm i in year t BVEi,t = book value of equity for company i in year t Public ownership is the proportion of shares owned by the general public or outsiders.…”

“…Investors and other stakeholders increasingly need meaningful and transparent disclosure of GHG emissions and the management of associated risks (Solomon et al, 2011;Hartmann et al, 2013;Cheung et al, 2016). However, previous research related to the disclosure of carbon emissions only focused on the role of the board of directors and aspects of company characteristics; (Haque, 2017;Luo et al, 2012, Faisal et al, 2018Hollindale et al, 2019;Monica et al, 2021;Nuber and Velte, 2021). In contrast to the research by (Monica et al, 2021), this research focuses on the argument of how public ownership can encourage the disclosure of carbon emissions which in turn has an impact on firm value.…”

Disclosure sustainability reporting and corporate governance business performance: how it impacts on market performance

“…Market performance is related to stock prices so that later it can determine the value of a company. There are several ways that can be used to measure the market performance of a company, where one of the indicators that can provide the best information is the Tobin's Q ratio (Monica, et al, 2021). Tobin's Q is an indicator to measure company performance, which can show a management performance in managing company assets.…”

“…Market performance is very important because there is a target to be achieved by business management, namely the desire for market confidence to increase towards the company's current performance and the company's prospects in the future. Increased market performance indicates that there is an achievement that can improve the welfare of the owners (Monica et al, 2021). Market performance indicates the company's performance which is described by the stock price which is formed from the demand and supply of the capital market which confirms the evaluation from the public of the company's performance (Daromes & Jao, 2020).…”

“…Information that must also be disclosed by the company's management in order to attract investors' interest in addition to business performance is the sustainability report (Monica, 2021). This is because there are many demands from the community regarding corporate responsibility for the positive and negative impacts on the economic, social and environmental aspects, so it is necessary to change the pattern of sustainability that involves integration between the three aspects of development in running a business and company with an orientation to the triple bottom concept.…”