The Role of Female and Millennial Directors on the Environmental Performance of Indonesian SOEs
Abstract
The Indonesian Ministry of SOEs seeks to increase the proportion of female and millennial directors on the SOE board of directors to improve the environmental performance of SOE. This study aims to obtain empirical evidence of female and millennial directors' influence on the environmental performance of SOE. The results indicate that female directors have a negative effect on environmental performance. The proportion of female directors is only a political reason to meet the quota requirements for women directors on the SOE board of directors. They only practice tokenism without having management power over the environment. Conversely, millennial directors have a positive impact on environmental performance. Robustness testing shows the same results as the primary research model and proves that this study's findings are robust. This research has implications for The Ministry of SOEs to increase millennial directors' representation to improve SOE corporate governance and obtain high environmental performance.
Keywords: female directors, millennial directors, environmental performance
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References
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Sogari, G., et al. (2017). Millennial generation and environmental sustainability: The role of social media in the consumer purchasing behavior for wine. Sustainability, 9(10), 1911.
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Aigbedo, H. (2021). An empirical analysis of the effect of financial performance on environmental performance of companies in global supply chains. Journal of Cleaner Production, 278, 121741.
Alamsyah, I. E. (2020). Bio Farma Raih Anugerah PROPER Emas Ke-5. Retrieved from https://republika.co.id/berita/qlessk349/bio-farma-raih-anugrah-proper-emas-ke-5
Alazzani, A., et al. (2017). Impact of gender diversity on social and environmental performance: evidence from Malaysia. Corporate Governance: The International Journal of Business in Society.
Ali, M. French, E. (2019). Age diversity management and organisational outcomes: The role of diversity perspectives. Human Resource Management Journal, 29(2), 287-307.
Banjarnahor, D. (2020). Pembangkit PLN Raih 5 PROPER Emas dan 16 PROPER Hijau di 2019. Retrieved from https://www.cnbcindonesia.com/news/20200108185651-4-128682/pembangkit-pln-raih-5-proper-emas-dan-16-proper-hijau-di-2019
Beji, R., et al. (2020). Board diversity and corporate social responsibility: Empirical evidence from France. Journal of business ethics, 1-23.
Bhagat, S. Bolton, B. (2019). Corporate governance and firm performance: The sequel. Journal of Corporate Finance, 58, 142-168.
Cancela, B. L., et al. (2020). The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment. International Journal of Accounting & Information Management.
Chariri, A., et al. (2017). Firm characteristics, audit committee, and environmental performance: Insights from Indonesian companies. International Journal of Energy Economics and Policy, 7(6), 19-26.
Cho, C. K., et al. (2019). Managerial attributes, consumer proximity, and corporate environmental performance. Corporate Social Responsibility and Environmental Management, 26(1), 159-169.
Cohen, A., et al. (2020). A statistical analysis of critical quality tools and companies’ performance. Journal of Cleaner Production, 255, 120221.
Colvin, R. M., et al. (2020). Power, perspective, and privilege: The challenge of translating stakeholder theory from business management to environmental and natural resource management. Journal of Environmental Management, 271, 110974. doi:https://doi.org/10.1016/j.jenvman.2020.110974
Cuadrado‐Ballesteros, B., et al. (2017). Board structure to enhance social responsibility development: A qualitative comparative analysis of US companies. Corporate Social Responsibility and Environmental Management, 24(6), 524-542.
Cucari, N., et al. (2018). Diversity of board of directors and environmental social governance: Evidence from Italian listed companies. Corporate Social Responsibility and Environmental Management, 25(3), 250-266.
Elmagrhi, M. H., et al. (2019). A study of environmental policies and regulations, governance structures, and environmental performance: The role of female directors. Business Strategy and the Environment, 28(1), 206-220.
Fauzan, M. R. (2021). Mantap Guys, Erick Thohir Inginkan 15% Kursi Direksi BUMN untuk Generasi Millenial. Retrieved from https://www.wartaekonomi.co.id/read323161/mantap-guys-erick-thohir-inginkan-15-kursi-direksi-bumn-untuk-generasi-millenial
Fernandez‐Feijoo, B., et al. (2014). Women on boards: Do they affect sustainability reporting? Corporate Social Responsibility and Environmental Management, 21(6), 351-364.
Freeman. (1984). Strategic management: A stakeholder perspective. Englewood Cliffs, NJ: Prentice Hall.
García Martín, C. J. Herrero, B. (2020). Do board characteristics affect environmental performance? A study of EU firms. Corporate Social Responsibility and Environmental Management, 27(1), 74-94.
Gregory, R. P. (2022). ESG scores and the response of the S&P 1500 to monetary and fiscal policy during the Covid-19 pandemic. International Review of Economics & Finance, 78, 446-456. doi:https://doi.org/10.1016/j.iref.2021.12.013
Hambrick, D. C. (2007). Upper echelons theory: An update. In: Academy of Management Briarcliff Manor, NY 10510.
Hambrick, D. C. Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of management review, 9(2), 193-206.
Harymawan, I., et al. (2020). How does the presidential election period affect the performance of the state-owned enterprise in Indonesia? Cogent Business & Management, 7(1), 1750330.
Hörisch, J., et al. (2020). Integrating stakeholder theory and sustainability accounting: A conceptual synthesis. Journal of Cleaner Production, 275, 124097. doi:https://doi.org/10.1016/j.jclepro.2020.124097
Hussain, N., et al. (2018). Corporate governance and sustainability performance: Analysis of triple bottom line performance. Journal of business ethics, 149(2), 411-432.
Idris, M. (2021). Erick Thohir Minta 15 Persen Direksi BUMN Dijabat Perempuan. Retrieved from https://money.kompas.com/read/2021/01/17/084248826/erick-thohir-minta-15-persen-direksi-bumn-dijabat-perempuan?page=all
Jahn, J. Brühl, R. (2018). How Friedman's View on Individual Freedom Relates to Stakeholder Theory and Social Contract Theory. Journal of business ethics, 153(1), 41-52.
Jiang, X. Akbar, A. (2018). Does increased representation of female executives improve corporate environmental investment? Evidence from China. Sustainability, 10(12), 4750.
Kang, J. (2017). Unobservable CEO characteristics and CEO compensation as correlated determinants of CSP. Business & Society, 56(3), 419-453.
Konadu, R., et al. (2022). Board gender diversity, environmental innovation and corporate carbon emissions. Technological Forecasting and Social Change, 174, 121279. doi:https://doi.org/10.1016/j.techfore.2021.121279
Li, D., et al. (2019). Relationship between Chief Executive Officer characteristics and corporate environmental information disclosure in Thailand. Frontiers of Engineering Management, 6(4), 564-574.
Liao, L., et al. (2015). Gender diversity, board independence, environmental committee and greenhouse gas disclosure. The British Accounting Review, 47(4), 409-424.
Lin, W.-L., et al. (2019). Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector. Journal of Cleaner Production, 229, 974-988. doi:https://doi.org/10.1016/j.jclepro.2019.04.214
Low, D. C., et al. (2015). Board gender diversity and firm performance: Empirical evidence from Hong Kong, South Korea, Malaysia and Singapore. Pacific-Basin Finance Journal, 35, 381-401.
Lucas, R., et al. (2021). Female directors and acquisitions: Australian evidence. Pacific-Basin Finance Journal, 68, 101600. doi:https://doi.org/10.1016/j.pacfin.2021.101600
McGuinness, P. B., et al. (2017). CSR performance in China: The role of board gender and foreign ownership. Journal of Corporate Finance, 42, 7299.
Media Indonesia. (2020). Bio Farma Meraih Anugerah PROPER Emas untuk yang Kelima Kali. Retrieved from https://mediaindonesia.com/humaniora/369389/bio-farma-meraih-anugerah-proper-emas-untuk-yang-kelima-kali
Ministry of Environment and Forestry of the Republic of Indonesia. (2021). Retrieved from https://proper.menlhk.go.id/
Oware, K. M., et al. (2022). Female and environmental disclosure of family and non-family firms. Evidence from India. Management Research Review, 45(6), 760-780. doi:10.1108/MRR-05-2021-0376
Shah, M. U. Guild, P. D. (2022). Stakeholder engagement strategy of technology firms: A review and applied view of stakeholder theory. Technovation, 114, 102460. doi:https://doi.org/10.1016/j.technovation.2022.102460
Shahab, Y., et al. (2020). Chief executive officer attributes, sustainable performance, environmental performance, and environmental reporting: New insights from upper echelons perspective. Business Strategy and the Environment, 29(1), 1-16.
Sogari, G., et al. (2017). Millennial generation and environmental sustainability: The role of social media in the consumer purchasing behavior for wine. Sustainability, 9(10), 1911.
Tran, N. Pham, B. (2020). The influence of CEO characteristics on corporate environmental performance of SMEs: Evidence from Vietnamese SMEs. Management Science Letters, 10(8), 1671-1682.
Williams, G. (2020). Management millennialism: Designing the new generation of employee. Work, Employment and Society, 34(3), 371-387.
Wu, Q., et al. (2022). Corporate social responsibility and board gender diversity: a meta-analysis. Management Research Review, 45(7), 956-983. doi:10.1108/MRR-03-2021-0236
Published
2022-07-27
How to Cite
WARDHANI, Dian Kusuma; PURWINANTI, Eiffeliena Nur'aini; PRIANDI, Muhammad.
The Role of Female and Millennial Directors on the Environmental Performance of Indonesian SOEs.
Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 17, n. 2, p. 362-375, july 2022.
ISSN 2303-1018.
Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/85664>. Date accessed: 23 apr. 2024.
doi: https://doi.org/10.24843/JIAB.2022.v17.i02.p12.
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Section
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