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Sustainability Reporting Disclosure in Islamic Corporates: Do Human Governance, Corporate Governance, and IT Usage Matter?

Author

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  • Idris Gautama So

    (Management Department, Binus Business School, Bina Nusantara University, Jakarta 11480, Indonesia)

  • Hasnah Haron

    (Faculty of Economics and Muamalat, Universiti Sains Malaysia, Nilai 11800, Malaysia)

  • Anderes Gui

    (Information Systems Study Programme, School of Information Systems, Bina Nusantara University, Jakarta 11480, Indonesia)

  • Elfindah Princes

    (Information Systems Management Department, BINUS Graduate Programme, Bina Nusantara University, Jakarta 11480, Indonesia)

  • Synthia Atas Sari

    (Management Department, Binus Business School, Bina Nusantara University, Jakarta 11480, Indonesia)

Abstract

In developing countries, particularly South Asia, there is scarce research on corporate governance and sustainability reporting disclosure. This study considers several insightful theories, including Stakeholder Theory, Agency Theory, and the TOE Framework, to understand the relationships and drivers of sustainability reporting. The study examines Indonesian Islamic corporates using data from the ISSI (Indonesia Shariah Stock Index). We gathered annual reports and sustainability reports from the ISSI database for the year 2019. The study investigates how human governance (HG), Islamic corporate governance (ICG), and information technology usage (ITU) are related to sustainability reporting disclosure (SR). The findings showed that the sustainability reporting disclosure was significantly influenced by human governance and Islamic corporate governance with firm size and leverage. Furthermore, the research showed that profitability was not significantly related to sustainability reporting disclosure, that Islamic corporate governance had a significant negative influence on SR, and that IT usage was only significant when human governance was not present. Finally, the results showed that human governance is the main driver of sustainability reporting disclosure. Therefore, we conclude that human governance is the best predictor for sustainability reporting disclosure.

Suggested Citation

  • Idris Gautama So & Hasnah Haron & Anderes Gui & Elfindah Princes & Synthia Atas Sari, 2021. "Sustainability Reporting Disclosure in Islamic Corporates: Do Human Governance, Corporate Governance, and IT Usage Matter?," Sustainability, MDPI, vol. 13(23), pages 1-23, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:23:p:13023-:d:687186
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