ENHANCING CORPORATE PERFORMANCE THROUGH STRATEGIC SDG DISCLOSURE: THE MODERATING ROLE OF BOARD ENGAGEMENT AND GENDER DIVERSITY

Sulis Rochayatun; Dyah Febriantina Istiqomah; Novi Lailiyul Wafiroh; Fadlil Abdani

Authors

Sulis Rochayatun Faculty of Economics, Accounting Study Program, Malang, East Java, Indonesia
Dyah Febriantina Istiqomah Faculty of Economics, Accounting Study Program, Malang, East Java, Indonesia
Novi Lailiyul Wafiroh Faculty of Economics, Accounting Study Program, Malang, East Java, Indonesia
Fadlil Abdani Faculty of Economics, Accounting Study Program, Malang, East Java, Indonesia

Keywords:

SDGs Disclosure, Number of Board Meetings, Board Gender Diversity, Corporate Performance

Abstract

This study aims to analyze the effect of Sustainable Development Goals (SDGs) disclosure on firm performance, by considering the moderating role of board involvement (frequency of meetings) and gender diversity on the board. Based on Stakeholder Theory and Agency Theory, commitment to SDGs is seen as a corporate strategy in meeting stakeholder expectations and creating long-term value for the company. The study used a sample of 80 companies contained in the IDX80 index during the period 2016-2023, with a total of 640 observations. Company performance is proxied by Tobin's Q, while commitment to SDGs is measured based on disclosure of 17 SDGs indicators. Data was collected usingdocumentation techniques sourced from sustainability reports and financial reports obtained from each company's website. Empirical results show that SDGs disclosure has a positive and significant effect on company performance. In addition, the frequency of board meetings and gender diversity are shown to strengthen the relationship. A high numberof meetings reflects an active and strategic level of oversight of SDG implementation, while the presence of women on the board of directors increases sensitivity and attention to social and environmental issues at the core of the SDGs. Improved implementation of the SDGs can therefore enhance corporate reputation, reduce regulatory risk, and strengthen stakeholder relationships, thereby contributing to better financial performance. This research contributes to the corporate sustainability literature by demonstrating the importance of corporate governance mechanisms in supporting the effective implementation of the SDGs. The practical implications of the findings underscore the importance of integrating good corporate governance practices into corporate sustainability strategies to generate sustainable reputational and financial benefits. Companies are advised to improve the quality of SDGs disclosures andbuild inclusive and active boards of directors as a form of strategic commitment to sustainable development.

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