Disruptive innovation disclosure practices: Do board characteristics, ownership structure, and investor matter?

Indrian Supheni, Suyanto Suyanto, Tiyas Puji Utami

Abstract


Research aims: This study aims to analyze the effect of board characteristics, ownership structures, and investors on disruptive innovation disclosure in the annual reports of companies in Indonesia.
Design/Methodology/Approach: This study used 237 cross-section data from 237 companies in the manufacturing sectors. The dependent variable in this study was obtained by analyzing the content of the company's annual report. The hypothesis in this study was then tested using multiple linear regression.
Research findings: The regression test results revealed that foreign ownership affected the disclosure of disruptive innovation in manufacturing companies. Other variables, such as characteristics of the board of commissioners, members and investors, did not affect the disclosure of disruptive innovation in manufacturing companies.
Theoretical contribution/Originality: Disclosure of disruptive innovation is rarely done, but this study looks at disclosure from the stakeholder theory perspective in manufacturing companies.
Research limitation/Implication: This study was only limited to manufacturing companies. Meanwhile, other companies are expected to be studied in further research. In addition, more observation data can be added to strengthen the research results.


Keywords


Board Characteristics; Disruptive Innovation Disclosure; Investors; Ownership Structure

Full Text:

PDF

References


Abu Qa’dan, M. B., & Suwaidan, M. S. (2019). Board composition, ownership structure and corporate social responsibility disclosure: the case of Jordan. Social Responsibility Journal, 15(1), 28-46. https://doi.org/10.1108/SRJ-11-2017-0225

Adeniyi, S. I., & Adebayo, H. O. (2018). Effect of financial leverage on voluntary corporate social disclosure among listed firms on Nigerian stock exchange: a study of selected manufacturing firms. Academic Journal of Economic Studies, 4(3), 18-24.

Adner, R. (2006). Match your innovation strategy to your innovation ecosystem. Harvard Business Review, 84(4), 98.

Al Amosh, H., & Khatib, S. F. (2022). Ownership structure and environmental, social and governance performance disclosure: the moderating role of the board independence. Journal of Business and Socio-Economic Development, 2(1), 49-66. https://doi.org/10.1108/JBSED-07-2021-0094

Al-Janadi, Y., Abdul Rahman, R., & Alazzani, A. (2016). Does government ownership affect corporate governance and corporate disclosure? Evidence from Saudi Arabia. Managerial Auditing Journal, 31(8/9), 871-890. https://doi.org/10.1108/MAJ-12-2015-1287

Alhazaimeh, A., Palaniappan, R., & Almsafir, M. (2014). The impact of corporate governance and ownership structure on voluntary disclosure in annual reports among listed Jordanian companies. Procedia-Social and Behavioral Sciences, 129, 341-348. https://doi.org/10.1016/j.sbspro.2014.03.686

Arayssi, M., Jizi, M., & Tabaja, H. H. (2020). The impact of board composition on the level of ESG disclosures in GCC countries. Sustainability Accounting, Management and Policy Journal, 11(1), 137-161. https://doi.org/10.1108/SAMPJ-05-2018-0136

Chen, T., Dong, H., & Lin, C. (2020). Institutional shareholders and corporate social responsibility. Journal of financial economics, 135(2), 483-504. https://doi.org/10.1016/j.jfineco.2019.06.007

Ciampi, F. (2015). Corporate governance characteristics and default prediction modeling for small enterprises. An empirical analysis of Italian firms. Journal of Business Research, 68(5), 1012-1025. https://doi.org/10.1016/j.jbusres.2014.10.003

CNN. (2024). US revokes some export licenses for selling semiconductors to China’s Huawei. CNN Business. Retrieved 2 July from https://edition.cnn.com/2024/05/08/tech/us-export-licenses-china-huawei-hnk-intl/index.html

Fernandes, S. M., Bornia, A. C., & Nakamura, L. R. (2018). The influence of boards of directors on environmental disclosure. Management decision, 57(9), 2358-2382. https://doi.org/10.1108/MD-11-2017-1084

Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge university press. https://doi.org/10.1017/CBO9781139192675

Freeman, R. E., & Reed, D. L. (1983). Stockholders and stakeholders: A new perspective on corporate governance. California management review, 25(3), 88-106. https://doi.org/10.2307/41165018

Freudenreich, B., Lüdeke-Freund, F., & Schaltegger, S. (2020). A stakeholder theory perspective on business models: Value creation for sustainability. Journal of Business Ethics, 166(1), 3-18. https://doi.org/10.1007/s10551-019-04112-z

Ghozali, I. (2016). Aplikasi analisis multivariete dengan program IBM SPSS 23.

Javaid Lone, E., Ali, A., & Khan, I. (2016). Corporate governance and corporate social responsibility disclosure: evidence from Pakistan. Corporate Governance: The International Journal of Business in Society, 16(5), 785-797. https://doi.org/10.1108/CG-05-2016-0100

Jones, T. M., & Wicks, A. C. (1999). Letter to AMR regarding “convergent stakeholder theory”. Academy of Management Review, 24(4), 621-623. https://doi.org/10.5465/amr.1999.12600876

Juhmani, O. I. (2013). Ownership structure and corporate voluntary disclosure: Evidence from Bahrain. International Journal of Accounting and Financial Reporting, 3(2), 133. https://doi.org/10.5296/ijafr.v3i2.4088

Kathy Rao, K., Tilt, C. A., & Lester, L. H. (2012). Corporate governance and environmental reporting: an Australian study. Corporate Governance: The International Journal of Business in Society, 12(2), 143-163. https://doi.org/10.1108/14720701211214052

Khaireddine, H., Salhi, B., Aljabr, J., & Jarboui, A. (2020). Impact of board characteristics on governance, environmental and ethical disclosure. Society and Business Review, 15(3), 273-295. https://doi.org/10.1108/SBR-05-2019-0067

Khan, A., Muttakin, M. B., & Siddiqui, J. (2013). Corporate governance and corporate social responsibility disclosures: Evidence from an emerging economy. Journal of Business Ethics, 114, 207-223. https://doi.org/10.1007/s10551-012-1336-0

Kiliç, M., Kuzey, C., & Uyar, A. (2015). The impact of ownership and board structure on Corporate Social Responsibility (CSR) reporting in the Turkish banking industry. Corporate Governance, 15(3), 357-374. https://doi.org/10.1108/CG-02-2014-0022

Lagasio, V., & Cucari, N. (2019). Corporate governance and environmental social governance disclosure: A meta‐analytical review. Corporate social responsibility and environmental management, 26(4), 701-711. https://doi.org/10.1002/csr.1716

Ledoux, M. J., & Cormier, D. (2013). Market assessment of intangibles and voluntary disclosure about innovation: the incidence of IFRS. Review of Accounting and Finance, 12(3), 286-304. https://doi.org/10.1108/RAF-Apr-2012-0033

Li, Q., Ruan, W., Li, R., & Li, H. (2023). Do institutional investors’ holdings affect corporate environmental information disclosure? Evidence from China. Environment, Development and Sustainability, 25(12), 14733-14751. https://doi.org/10.1007/s10668-022-02686-9

Liu, Y., Lei, L., & Buttner, E. H. (2020). Establishing the boundary conditions for female board directors’ influence on firm performance through CSR. Journal of Business Research, 121, 112-120. https://doi.org/10.1016/j.jbusres.2020.08.026

Masum, M. H., Latiff, A. R. A., & Osman, M. N. H. (2020). Ownership structure and corporate voluntary disclosures in transition economy. The Journal of Asian Finance, Economics and Business, 7(10), 601-611. https://doi.org/10.13106/jafeb.2020.vol7.no10.601

McDaniel, L., Martin, R. D., & Maines, L. A. (2002). Evaluating financial reporting quality: The effects of financial expertise vs. financial literacy. The accounting review, 77(s-1), 139-167. https://doi.org/10.2308/accr.2002.77.s-1.139

Michelon, G. (2011). Sustainability disclosure and reputation: A comparative study. Corporate reputation review, 14, 79-96. https://doi.org/10.1057/crr.2011.10

Ntim, C. G., & Soobaroyen, T. (2013). Corporate governance and performance in socially responsible corporations: New empirical insights from a Neo‐Institutional framework. Corporate governance: an international review, 21(5), 468-494. https://doi.org/10.1111/corg.12026

Nugraheni, P., Indrasari, A., & Hamzah, N. (2022). The impact of ownership structure on CSR disclosure: Evidence from Indonesia. Journal of Accounting and Investment, 23(2), 229-243. https://doi.org/10.18196/jai.v23i2.14633

Nur Probohudono, A., Tower, G., & Rusmin, R. (2013). Risk disclosure during the global financial crisis. Social Responsibility Journal, 9(1), 124-137. https://doi.org/10.1108/17471111311307859

Oanh, T. T. K., Hien, D. T. T., Anh, H. T. P., & Ha, D. T. T. (2021). Ownership structure and firm performance: empirical study in Vietnamese stock exchange. Data Science for Financial Econometrics, 353-367. https://doi.org/10.1007/978-3-030-48853-6_25

Rahayu, R., & Djuminah, D. (2022). Does the Board of Commissioners’ Characteristics Relevant to the Sustainable Finance Disclosure in Indonesian Banks? Journal of Accounting and Investment, 23(2), 209-228. https://doi.org/10.18196/jai.v23i2.14163

Rahindayati, N. M., Ramantha, I. W., & Rasmini, N. K. (2015). Pengaruh Diversitas Pengurus Pada Luas Pengungkapan Corporate Social Responsibility Perusahaan Sektor Keuangan. E-Jurnal Ekonomi Dan Bisnis Universitas Udayana, 4(5), 312-330.

Rustam, A., Wang, Y., & Zameer, H. (2019). Does foreign ownership affect corporate sustainability disclosure in Pakistan? A sequential mixed methods approach. Environmental Science and Pollution Research, 26(30), 31178-31197. https://doi.org/10.1007/s11356-019-06250-3

Saini, N., & Singhania, M. (2019). Performance relevance of environmental and social disclosures: The role of foreign ownership. Benchmarking: An International Journal, 26(6), 1845-1873. https://doi.org/10.1108/BIJ-04-2018-0114

Sandström, C., Berglund, H., & Magnusson, M. (2014). Symmetric assumptions in the theory of disruptive innovation: Theoretical and managerial implications. Creativity and Innovation Management, 23(4), 472-483. https://doi.org/10.1111/caim.12092

Schipper, K. (1981). Discussion of voluntary corporate disclosure: The case of interim reporting. Journal of accounting research, 85-88. https://doi.org/10.2307/2490986

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. john wiley & sons.

Sharif, M., & Rashid, K. (2014). Corporate governance and corporate social responsibility (CSR) reporting: an empirical evidence from commercial banks (CB) of Pakistan. Quality & Quantity, 48, 2501-2521. https://doi.org/10.1007/s11135-013-9903-8

Suhardjanto, D., Probohudono, A. N., & Supheni, I. (2021). Pengungkapan Inovasi Disruptif Industri Perbankan Indonesia. EKUITAS (Jurnal Ekonomi Dan Keuangan), 5(3), 283-299. https://doi.org/10.24034/j25485024.y2021.v5.i3.4997

Supheni, I., Suhardjanto, D., & Probohudono, A. N. (2023). Disruptive Innovation Disclosure Practices and Application of Stakeholder Theory. In Macroeconomic Risk and Growth in the Southeast Asian Countries: Insight from SEA (Vol. 33, pp. 41-51). Emerald Publishing Limited. https://doi.org/10.1108/S1571-03862023000033B003

Tian, Y., & Chen, J. (2009). Concept of voluntary information disclosure and a review of relevant studies. International Journal of Economics and Finance, 1(2), 55-59. https://doi.org/10.5539/ijef.v1n2p55

Van Puyvelde, S., Caers, R., Du Bois, C., & Jegers, M. (2012). The governance of nonprofit organizations: Integrating agency theory with stakeholder and stewardship theories. Nonprofit and voluntary sector quarterly, 41(3), 431-451. https://doi.org/10.1177/0899764011409757

Verbeek, M. (2017). A guide to modern econometrics. John Wiley & Sons.

Wanda, M. M. (2023). PT. Nestle Indonesia: Perencanaan dan Pengembangan Sumber Daya Manusia di Era Society 5.0 Studi Kasus Peran Perencanaan Sumber Daya Manusia. Research Gate.




DOI: https://doi.org/10.18196/jai.v25i3.23018

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Office:
Ruang Jurnal Fakultas Ekonomi dan Bisnis UMY
Gedung Ki Bagus Hadikusuma (E4) Lantai 2, Kampus Terpadu Universitas Muhammadiyah Yogyakarta,
Jalan Brawijaya (Lingkar Selatan), Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta, Indonesia, 55183
Website: journal.umy.ac.id/index.php/ai - E-mail: jai@umy.ac.id

Journal of Accounting and Investment is licensed under Creative Commons Attribution Attribution-NonCommercial-NoDerivatives 4.0 International License

View My Stats