Corporate Governance, CSR Disclosure, and Financial Performance: Empirical Evidence from Indonesian LQ45 Companies

Abstract

This study aims to analyze the effect of Good Corporate Governance (GCG) and Corporate Social Responsibility (CSR) on the financial performance of companies included in the LQ45 Index on the Indonesia Stock Exchange. LQ45 companies were selected because they represent firms with relatively high liquidity and market capitalization, as well as greater demands for transparency and accountability. This study employs a quantitative approach with a causal associative research design. The data consist of secondary data obtained from companies’ annual reports and sustainability reports for the 2023–2024 period. GCG is proxied by the number of directors, the number of board commissioners, the number of audit committee members, and institutional ownership, while CSR is measured based on the level of CSR disclosure. Financial performance is measured using Return on Assets (ROA). Data analysis was conducted using multiple linear regression with the assistance of SPSS, preceded by classical assumption tests and hypothesis testing. The results show that, partially, the number of directors, the number of board commissioners, the number of audit committee members, institutional ownership, and CSR disclosure do not have a significant effect on ROA. Simultaneously, GCG and CSR also have no significant effect on financial performance. These findings indicate that variations in financial performance are largely influenced by factors outside the research model. The results suggest that GCG and CSR implementation have not directly translated into improved short-term financial performance among LQ45 companies.