Corporate Governance Mechanisms and Voluntary Disclosure in the Indonesian Banking Sector
Keywords:
Corporate Governance, Voluntary Disclosure, Indonesian Banking, Board Size, Gender Diversity, Fixed Effect Model
Abstract
This study aims to empirically examine the effect of corporate governance mechanisms—measured by board size, board independence, gender diversity, public ownership, and audit committee independence—on voluntary disclosure in the Indonesian banking sector. Grounded in Agency Theory and Resource Dependence Theory, this research responds to public and managerial gaps regarding transparency limitations amid macroeconomic pressures and governance concerns during the 2020–2024 period. Using a purposive sampling method, the study selected 40 commercial conventional banks listed on the Indonesia Stock Exchange (IDX), yielding a panel dataset of 200 observations (2020–2024). Voluntary disclosure was measured using a Disclosure Index based on GRI Standards 2016 and 2021 tailored to the banking sector. Panel data regression analysis using the Fixed Effect Model (FEM) reveals that corporate governance mechanisms and the control variable Return on Assets (ROA) simultaneously have a significant positive impact on voluntary disclosure (R2adj = 72.42%). Partially, board size, board independence, gender diversity, public ownership, and audit committee independence significantly and positively influence voluntary disclosure. Relative dominance analysis indicates that board size is the most dominant contributor (62.30%), followed by gender diversity (14.72%), audit committee independence (9.69%), board independence (7.56%), and public ownership (5.73%). These findings highlight the strategic synergy of governance organs in mitigating information asymmetry, enhancing internal oversight, and fostering market transparency in the Indonesian banking industry.
References
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Pfeffer, J., & Salancik, G. R. (1978). The External Control of Organisations: A Resource Dependence Perspective. Harper & Row.
Rana, T., Habib, A., & Hossain, M. (2022). Corporate Governance and Voluntary Disclosures in Annual Reports: Evidence from an Emerging Capital Market Following the Adoption of IFRS. International Journal of Accounting and Information Management, 30(3), 421–441.
Saha, R., & Kabra, K. C. (2020). Corporate Governance and Voluntary Disclosure: A Synthesis of Empirical Studies. Business Perspectives and Research, 8(2), 117–138. https://doi.org/10.1177/2278533719886998
Sahyoun, N., & Magnan, M. (2020). The Association Between Voluntary Disclosure in Audit Committee Reports and Banks’ Earnings Management. Managerial Auditing Journal, 35(5), 595–622. https://doi.org/10.1108/MAJ-03-2019-2215
Supriyanto, S., & Resnika, R. (2023). Determinants of voluntary disclosure: An empirical analysis of publicly listed entities in Indonesia. Jurnal Akuntansi, 13(1), 21–41. https://doi.org/10.33369/jakuntansi.13.1.21-42
Adisa, I., Abdulraheem, A., & Ahmad, R. (2022). Corporate governance characteristics and voluntary disclosure quality: Evidence from developing economies. *Corporate Governance: The International Journal of Business in Society*, 22(4), 845–864.
Al-Dhamari, R., Ismail, K. N. I. K., & Al-Gamrh, B. (2021). Board characteristics, audit committee and corporate voluntary disclosure: Evidence from emerging markets. Journal of Financial Reporting and Accounting, 19(5), 1045–1068.
Alfraih, M. M. (2020). Corporate governance mechanisms and voluntary disclosure in emerging capital markets. International Journal of Disclosure and Governance, 17(2–3), 121–138.
Ali, M. J., Ahmed, K., & Henry, D. (2022). Corporate governance and voluntary disclosure quality: International evidence. Journal of International Accounting, Auditing and Taxation, 46, 100451.
Al-Maghzom, A., Hussainey, K., Aly, D., & Hamid, F. A. (2022). Corporate governance and voluntary disclosure quality: Evidence from developing countries. Journal of Applied Accounting Research, 23(4), 705–726.
Alshirah, M. H., Rahman, A. A., Mustapa, I. R., & Rahman, M. M. (2021). Board characteristics and voluntary disclosure in emerging economies. Corporate Governance: The International Journal of Business in Society, 21(7), 1303–1322.
Appuhami, R., Perera, L., & Perera, H. (2023). Corporate governance mechanisms and voluntary disclosure practices: Evidence from Asia-Pacific firms. Asian Review of Accounting, 31(2), 214–236.
Barako, D. G., Hancock, P., & Izan, H. Y. (2021). Relationship between corporate governance attributes and voluntary disclosures in annual reports: The Kenyan experience. Corporate Governance: An International Review, 19(5), 504–518.
Cahaya, F. R., & Yoga, G. (2020). Corporate Governance and Voluntary Disclosures: A Story about Corporate Transparency from Indonesia. International Journal of Monetary Economics and Finance, 13(4), 345–363.
Chen, C. J. P., Jaggi, B., & Tsui, J. S. L. (2021). Board independence, ownership structure and voluntary disclosure: International evidence. Journal of Business Ethics, 172(3), 509–530.
Darmadi, S. (2020). Corporate Governance in Indonesia: Principles, Practices, and Challenges. Springer Nature.
Darmawan, A., Sutrisno, T., & Mardiati, E. (2020). Corporate governance mechanisms and voluntary disclosure in Indonesia. International Journal of Financial Research, 11(5), 253–266.
Global Reporting Initiative. (2016). GRI Sustainability Reporting Standards 2016. Global Reporting Initiative.
Global Reporting Initiative. (2021). GRI Universal Standards 2021. Global Reporting Initiative.
Habbash, M. (2021). Corporate governance and voluntary disclosure: Recent evidence from GCC countries. Journal of Financial Reporting and Accounting, 19(4), 779–801.
Handajani, L., Subroto, B., Sutrisno, T., & Saraswati, E. (2021). Does board diversity matter for corporate social disclosure? Evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8(1), 1023–1032.
Harventy, G. (2020). The role of corporate governance in improving voluntary disclosure. Journal of Accounting and Finance Review, 10(3), 602–613. https://doi.org/10.22219/jrak.v10i3.14273
Hashmi, M. A., Brahmana, R., & Lau, E. (2022). Corporate governance and voluntary disclosure: Evidence from emerging markets. *Corporate Governance: The International Journal of Business in Society*, 22(6), 1328–1349.
Hidayati, N., & Puspawati, D. (2024). Corporate governance mechanisms and voluntary disclosure quality: Evidence from Indonesian listed companies. Journal of Accounting and Finance Review, 14(1), 45–63.
Jain, T., & Raithatha, M. (2024). Ownership concentration, board characteristics and voluntary disclosure quality. Journal of Accounting in Emerging Economies, 14(2), 357–381.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Kusnadi, Y., Yang, Z., & Zhou, Y. (2022). Board independence and corporate disclosure quality: Evidence from Asian listed firms. Journal of Contemporary Accounting & Economics, 18(3), 100329.
Nisa, K., & Kurniawan, A. (2024). Ownership structure and voluntary disclosure: Evidence from IDX-listed companies. Journal of Finance and Banking, 28(2), 211–228.
Nobanee, H., & Ellili, N. O. D. (2022). Voluntary corporate governance disclosure and bank performance: Evidence from an emerging market. Corporate Governance: The International Journal of Business in Society, 22(4), 702–719.
Financial Services Authority. (2017). Financial Services Authority Regulation No. 51/POJK.03/2017 on the Implementation of Sustainable Finance for Financial Services Institutions, Issuers and Public Companies.
Financial Services Authority. (2021). Financial Services Authority Circular No. 16/SEOJK.04/2021 on the Form and Content of Annual Reports of Issuers or Public Companies.
Financial Services Authority. (2023). Indonesian Banking Surveillance Report (LSPI) for the Fourth Quarter of 2023.
Pangaribuan, H. (2019). An Examination of Voluntary Disclosure, Independent Board, Independent Audit Committee and Institutional Ownership: Firm Size as a Moderator. Muara Journal of Economics and Business, 2(2), 522–534. https://doi.org/10.24912/jmieb.v2i2.1820
Pfeffer, J., & Salancik, G. R. (1978). The External Control of Organisations: A Resource Dependence Perspective. Harper & Row.
Rana, T., Habib, A., & Hossain, M. (2022). Corporate Governance and Voluntary Disclosures in Annual Reports: Evidence from an Emerging Capital Market Following the Adoption of IFRS. International Journal of Accounting and Information Management, 30(3), 421–441.
Saha, R., & Kabra, K. C. (2020). Corporate Governance and Voluntary Disclosure: A Synthesis of Empirical Studies. Business Perspectives and Research, 8(2), 117–138. https://doi.org/10.1177/2278533719886998
Sahyoun, N., & Magnan, M. (2020). The Association Between Voluntary Disclosure in Audit Committee Reports and Banks’ Earnings Management. Managerial Auditing Journal, 35(5), 595–622. https://doi.org/10.1108/MAJ-03-2019-2215
Supriyanto, S., & Resnika, R. (2023). Determinants of voluntary disclosure: An empirical analysis of publicly listed entities in Indonesia. Jurnal Akuntansi, 13(1), 21–41. https://doi.org/10.33369/jakuntansi.13.1.21-42
Published
2026-08-06
How to Cite
Ghazi Al Ghiffari, S., & Yulianto, A. (2026). Corporate Governance Mechanisms and Voluntary Disclosure in the Indonesian Banking Sector. International Journal of Economics, Business and Innovation Research, 5(05), 615-632. https://doi.org/10.63922/ijebir.v5i05.5314
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