THE EFFECT OF GOOD CORPORATE GOVERNANCE ON SUSTAINABILITY REPORT DISCLOSURE: EVIDENCE FROM ESG STAR LISTED COMPANIES

Abstract

Introduction: Sustainability Report disclosure has become an important instrument for corporate accountability in communicating economic, social, and environmental performance to stakeholders. This study aims to examine the influence of Good Corporate Governance, represented by the board of directors, audit committee, and independent board of commissioners, on Sustainability Report disclosure among companies included in the ESG Star Listed Companies. Methods: This research employed a quantitative approach with an associative research design. Secondary data were collected from companies’ annual reports and Sustainability Reports using purposive sampling. The data were analyzed using multiple linear regression with the assistance of IBM SPSS Statistics software, preceded by descriptive statistical analysis and classical assumption tests. Hypothesis testing used partial tests, simultaneous tests, and coefficient of determination analysis.Results: The findings reveal that the board of directors has no significant effect on Sustainability Report disclosure. In contrast, the audit committee and the independent board of commissioners have positive and significant effects on Sustainability Report disclosure. These findings indicate that corporate monitoring mechanisms play a more substantial role than strategic decision-making functions in improving the transparency of sustainability reporting. The study concludes that the effectiveness of Good Corporate Governance in improving Sustainability Report disclosure is particularly influenced by the audit committee and the independent board of commissioners. Therefore, companies are encouraged to strengthen the effectiveness and oversight functions of their audit committees and independent boards of commissioners to enhance the quality and transparency of Sustainability Report disclosure. Keywords: Board of Directors; Audit Committee; Independent Board of Commissioners; Sustainability Report.