Corporate governance, corporate social responsibility and corporate risk: Evidence on Indonesia

Document Type : Original Article


University of Riau, Indonesia


This research aims to test the influence of corporate governance and disclosure of social responsibility on corporate risk. The research was conducted on primary and secondary industrial companies listed on the Indonesia Stock Exchange (IDX) using data from 2014 to 2020. Data analysis will be done by quantitative data analysis with regression analysis using panel data. The results show that corporate governance and corporate social responsibility have a significant effect on company risk. The results are expected to be an additional reference to academics and researchers, about governance, disclosure of corporate social responsibility and its relationship to corporate risk, as well as an additional reference for capital market supervisors and regulators around corporate management.


Main Subjects

Almaskati, N., Bird, R., & Lu, Y. (2020). Corporate governance, institutions, markets, and social factors. Research in International Business and Finance, 51.
Archbold, S.M. S. I. S. (2016). Corporate Governance: The international journal of business in society. "Boards Attributes That Increase Firm Risk - Evidence from the UK", Corporate Governance: The International Journal of Business in Society, 16(2).
Asghar, A., Sajjad, S., Shahzad, A., & Matemilola, B. T. (2020). Role of discretionary earning management in corporate governance-value and corporate governance-risk relationships. Corporate  Governance  (Bingley), 20(4), 561–581.
Chairunesia, W., Sutra, P. R., & Wahyudi, S.M. (2018). The Influence of Good Corporate Governance and Financial Distress on Profit Management in Indonesian Companies Included in the ASEAN Corporate Governance Scorecard. Journal of Profita, 11(2), 232.
Chakraborty, A., Gao, L., & Sheikh, S. (2019). Corporate governance and risk in cross-listed and Canadian only companies. Management Decision, 57(10), 2740–2757.
CRMS Indonesia. (2019). National Risk Management Survey 2019. Center for Risk Management Studies Indonesia.
Cui, J., Jo, H., & Na, H. (2017). Corporate Social Responsibility, Religion, and Firm Risk. Asia-Pacific Journal of   Financial    Studies, 46(2), 305–340.
Fang, J. H. H.-X. (2016). Too High a Price: The Human Rights Cost of the Indonesian Military's Economic Activities", Vol. 18 No. 5C, Human Right Watch, pp. "Board Size, Ownership Concentration and Future Firm Risk", Chinese Management Studies, 10(4).
Hatane, S. E., Supangat, S., Tarigan, J., & Jie, F. (2019). Does internal corporate governance mechanism control firm risk? Evidence from Indonesia's three high-risk sectors. Corporate Governance (Bingley), 19(6), 1362–1376.
Khandelwal, C., Kumar, S., Madhavan, V., & Pandey, N. (2020). Do board characteristics impact corporate risk disclosures? The Indian experience. Journal of Business Research, 121, 103–111.
Napitupulu, I. H., Situngkir, A., Basuki, F. H., & Nugroho, W. (2020). Optimizing good Corporate Governance Mechanism to Improve Performance: Case in Indonesia's Manufacturing   Companies. Global Business Review, 46.
Ott, C. (2020). The risks of mergers and acquisitions—Analyzing the incentives for risk reporting in Item 1A of 10-K filings. Journal of Business Research, 106(February 2018), 158–181.
Ozdemir, O., Erkmen, E., & Kim, M. (2020). Corporate social responsibility and idiosyncratic risk in the restaurant industry: does brand diversification matter? International Journal of Contemporary Hospitality Management, 32(9), 2925–2946.
Pascal, Nguyen., & Nguyen, A. (2015). The effect of corporate social responsibility on firm risk. Social Responsibility Journal, 11(2), 324–339. 0093.
Rehman, Z. u., Khan, A., & Rahman, A. (2020). Corporate social responsibility's influence on firm risk and firm performance: the mediating role of firm reputation. Corporate Social Responsibility and Environmental Management, 27(6), 2991–3005.
Zhang, C., Cheong, K.C., & Rasiah, R. (2018). Board independence, state ownership and stock return volatility during Chinese state enterprise reform. Corporate Governance (Bingley), 18(2), 220–232.