The Effect Of Company Size, Profitability, And Company Value On Corporate Social Responsibility With Good Corporate Governance As A Moderation Variable In Banking Companies Listed On The Indonesia Stock Exchange

Feb 27, 2025 by ADMIN 212 views

The Effect of Company Size, Profitability, and Company Value on Corporate Social Responsibility with Good Corporate Governance as Moderating Variables in Banking Companies Listed on the Indonesia Stock Exchange

In today's business world, corporate social responsibility (CSR) is increasingly becoming a focal point for companies operating in various sectors, including banking. As the banking industry continues to grow and evolve, it is essential for companies to prioritize CSR to maintain a positive reputation and contribute to the well-being of society. This article aims to discuss the impact of company size, profitability, and company value on the implementation of CSR in banking companies listed on the Indonesia Stock Exchange. Furthermore, we will analyze the role of Good Corporate Governance (GCG) as a moderation variable in this relationship.

The Importance of Corporate Social Responsibility in Banking

Corporate social responsibility refers to a company's commitment to operating in a responsible and sustainable manner, taking into account the impact of its activities on the environment, society, and the economy. In the banking sector, CSR is particularly crucial, as banks play a vital role in the economy and have a significant impact on the lives of their customers and the broader community. By prioritizing CSR, banks can build trust with their stakeholders, improve their reputation, and contribute to the development of their communities.

Research Methodology

This study employs the purposive sampling method, where a sample of ten banking companies that meet specific criteria is selected for analysis during the period 2009 to 2013. The data used are secondary data obtained from the annual reports of these companies. The research design is based on a quantitative approach, using statistical analysis to examine the relationships between company size, profitability, company value, and CSR.

Research Results

Based on the results of the hypothesis test, it was found that company size, profitability (measured by Return on Assets/ROA), and company value simultaneously do not show a significant effect on CSR in banking companies listed on the Indonesia Stock Exchange. However, when tested partially, company size was proven to have a significant positive influence on CSR. Meanwhile, profitability and company value do not show a significant effect.

On the other hand, Moderated Regression Analysis (MRA) reveals that Good Corporate Governance, measured through the size of the Board of Commissioners, Board of Directors, and Audit Committee, is unable to moderate the relationship between company size, profitability (ROA), and company value against CSR.

Additional Analysis and Explanation

The findings of this study suggest that company size plays an essential role in increasing CSR. This may be due to the greater resource capacity owned by large companies, allowing them to invest more in social and environmental activities. In contrast, profitability and company value may not have a direct influence on CSR, as companies often prioritize short-term financial aspects over their social responsibility.

The role of Good Corporate Governance in this context is also noteworthy. Although it is expected that GCG can strengthen the relationship between the factors tested, the results show that good company structure and governance are not enough to improve CSR performance directly. This indicates that companies may need more than merely meet GCG standards to achieve success in CSR; they also need to develop a more comprehensive strategy that prioritizes social and environmental impacts.

Conclusion

In conclusion, this research provides valuable insights into the relationship between company size, profitability, company value, and CSR in the context of banking in Indonesia. While company size shows a positive effect on CSR, profitability and company value need to be further evaluated to understand their role more deeply. In addition, it is essential for companies to develop more effective GCG practices to maximize the positive impacts on their CSR. It is hoped that this research can serve as a reference for companies in formulating better CSR strategies in the future.

Recommendations

Based on the findings of this study, the following recommendations are made:

Prioritize CSR: Companies should prioritize CSR and integrate it into their business strategies to contribute to the well-being of society and maintain a positive reputation.
Develop effective GCG practices: Companies should develop more effective GCG practices to maximize the positive impacts on their CSR.
Invest in social and environmental activities: Large companies should invest more in social and environmental activities to leverage their resource capacity and contribute to the development of their communities.
Re-evaluate profitability and company value: Companies should re-evaluate the role of profitability and company value in CSR and develop strategies to balance short-term financial aspects with long-term social responsibility.

By implementing these recommendations, companies can improve their CSR performance, contribute to the well-being of society, and maintain a positive reputation in the banking industry.
Frequently Asked Questions (FAQs) on the Effect of Company Size, Profitability, and Company Value on Corporate Social Responsibility with Good Corporate Governance as Moderating Variables in Banking Companies Listed on the Indonesia Stock Exchange

Q1: What is the main objective of this study?

A1: The main objective of this study is to examine the effect of company size, profitability, and company value on corporate social responsibility (CSR) in banking companies listed on the Indonesia Stock Exchange, with Good Corporate Governance (GCG) as a moderation variable.

Q2: What is the significance of this study?

A2: This study is significant because it provides valuable insights into the relationship between company size, profitability, company value, and CSR in the banking industry. The findings of this study can help companies develop more effective CSR strategies and contribute to the well-being of society.

Q3: What is the research methodology used in this study?

A3: This study employs the purposive sampling method, where a sample of ten banking companies that meet specific criteria is selected for analysis during the period 2009 to 2013. The data used are secondary data obtained from the annual reports of these companies.

Q4: What are the key findings of this study?

A4: The key findings of this study are:

Company size has a significant positive influence on CSR.
Profitability and company value do not show a significant effect on CSR.
Good Corporate Governance (GCG) is unable to moderate the relationship between company size, profitability, and company value against CSR.

Q5: What are the implications of this study?

A5: The implications of this study are:

Companies should prioritize CSR and integrate it into their business strategies to contribute to the well-being of society and maintain a positive reputation.
Companies should develop more effective GCG practices to maximize the positive impacts on their CSR.
Large companies should invest more in social and environmental activities to leverage their resource capacity and contribute to the development of their communities.

Q6: What are the limitations of this study?

A6: The limitations of this study are:

The study is based on a sample of ten banking companies, which may not be representative of the entire banking industry.
The study uses secondary data, which may be subject to limitations and biases.
The study does not examine the impact of other factors, such as industry type and market conditions, on CSR.

Q7: What are the future research directions?

A7: The future research directions are:

To examine the impact of other factors, such as industry type and market conditions, on CSR.
To investigate the relationship between CSR and financial performance in the banking industry.
To develop a more comprehensive framework for CSR in the banking industry.

Q8: What are the practical implications of this study?

A8: The practical implications of this study are:

Companies should prioritize CSR and integrate it into their business strategies to contribute to the well-being of society and maintain a positive reputation.
Companies should develop more effective GCG practices to maximize the positive impacts on their CSR.
Large companies should invest more in social and environmental activities to leverage their resource capacity and contribute to the development of their communities.

Q9: What are the theoretical implications of this study?

A9: The theoretical implications of this study are:

The study contributes to the existing literature on CSR and GCG in the banking industry.
The study provides a more comprehensive understanding of the relationship between company size, profitability, company value, and CSR.
The study highlights the importance of GCG in promoting CSR in the banking industry.

Q10: What are the policy implications of this study?

A10: The policy implications of this study are:

Regulatory bodies should encourage companies to prioritize CSR and integrate it into their business strategies.
Regulatory bodies should develop more effective GCG practices to promote CSR in the banking industry.
Regulatory bodies should provide incentives for companies to invest in social and environmental activities.