Board diversity and sustainability performance in Indonesia firms
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Published:
Sep 30, 2026
Keywords:
Board gender diversity, ESG performance, Ownership concentration, Sustainability assurance
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Abstract
This study examines the effect of board gender diversity (BDG) on sustainability performance and whether ownership concentration and sustainability assurance moderate this relationship. Although prior ESG research has examined board diversity, it provides limited explanation of why Board Gender Diversity may be more or less effective under different governance conditions, particularly in emerging markets. Indonesia offers a relevant setting because listed firms commonly exhibit concentrated ownership, while ESG reporting, assurance, and stakeholder accountability are still developing. Using a quantitative approach, this study analyzes 150 firm-year observations from firms listed in the IDX ESG Leaders Index during 2020-2024, selected through purposive sampling based on the availability of complete annual and sustainability reports. Panel regression with interaction terms shows that BGD improves sustainability performance. However, this effect weakens as ownership concentration increases and strengthens when sustainability assurance is present. The study’s novelty lies in demonstrating that the effect of Board Gender Diversity is a conditional, internal ownership power constrains its effectiveness, whereas external assurance strengthens it.
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How to Cite
Raharjanti, R., Mansur, A. W., Mardinawati, M., Sarana, S., & Hidayati, U. (2026). Board diversity and sustainability performance in Indonesia firms. Indonesia Accounting Research Journal, 14(1), 64–73. Retrieved from https://journals.iarn.or.id/index.php/Accounting/article/view/669
References
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Amorelli, M. F., & García Sánchez, I. M. (2023). Leadership in Heels: Women on Boards and Sustainability in Times of COVID-19. Corporate Social Responsibility and Environmental Management, 1–24. https://doi.org/10.1002/csr.2469
Ardi, R., & Meiden, C. (2023). Sustainability Assurance, Report Credibility, and Stakeholder Trust: Evidence from Indonesian Listed Firms. Jurnal Akuntansi Multiparadigma, 14(1), 112–127. https://doi.org/10.18202/jamal.2023.04.14006
Buchetti, B., Miquel-Flores, I., Perdichizzi, S., & Reguera-Alvarado, N. (2025). A Literature Review on Corporate Governance and ESG Research: Emerging Trends and Future Directions. International Review of Financial Analysis, 97(103754). https://doi.org/10.1016/j.irfa.2024.103754
Buertey, S. (2021). Board Gender Diversity and Corporate Social Responsibility Assurance: The Moderating Effect of Ownership Concentration. Corporate Social Responsibility and Environmental Management, 28(6), 1579–1590. https://doi.org/10.1002/csr.2121
Delgado Sánchez, V. P., Zorio-Grima, A., & Merello, P. (2026). Sustainability Reporting Assurance: Knowledge, Lags, Levels, and Providers in Leading Global Companies. Journal of Innovation & Knowledge, 12(100899). https://doi.org/10.1016/j.jik.2025.100899
Dewi, A. A., Saraswati, E., Rahman, A. F., & Atmini, S. (2023). Materiality, Stakeholder Engagement Disclosure, and Corporate Governance: Critical Elements for the Quality of Sustainability Reporting. Cogent Business & Management, 10(1), 2175437. https://doi.org/10.1080/23311975.2023.2175437
Eissa, A. M., Hamdy, A., & Diab, A. (2024). Governmental Ownership, Board Gender Diversity, and ESG Performance: Evidence From an Emerging Market. Sustainability, 16(16), 6963. https://doi.org/10.3390/su16166963
Fatima, T., & Elbanna, S. (2023). Corporate Social Responsibility Implementation: A Review and a Research Agenda towards an Integrative Framework. Journal of Business Ethics, 183(1), 105–121. https://doi.org/10.1007/s10551-022-05047-8
Glass, C., Cook, A., & Ingersoll, A. R. (2016). Do Women Leaders Promote Sustainability? Analyzing the Effect of Corporate Governance Composition on Environmental Performance. Business Strategy and the Environment, 25, 495–511. https://doi.org/10.1002/bse.1879
Gunawan, J., Permatasari, P., & Tilt, C. A. (2021). The Evolution of Sustainability Reporting Practices in Indonesia. Journal of Cleaner Production, 370(133524). https://doi.org/10.1016/j.jclepro.2022.133524
Handayati, P., Tham, Y. H., Yuningsih, Y., Sun, Z., Nugroho, T. R., & Rochayatun, S. (2025). ESG Performance and Corporate Governance—The Moderating Role of the Big Four Auditors. Journal of Risk and Financial Management, 18(1), 1–19. https://doi.org/10.3390/jrfm18010031
Indyanti, N. M. D., & Zulaikha. (2017). Pengaruh Sustainability Reporting dan Sustainability Assurance terhadap Nilai Perusahaan. Jurnal Akuntansi Dan Auditing Indonesia, 21(2), 85–96. https://doi.org/10.20885/jaai.vol21.iss2.art1
Jung, Y., & Yoo, H. (2023). Environmental, Social, and Governance Activities and Firm Performance: Global Evidence and the Moderating Effect of Market Competition. Corporate Social Responsibility and Environmental Management, 1–10. https://doi.org/10.1002/csr.2518
KPMG. (2022). Survey of Sustainability Reporting 2022. https://home.kpmg/xx/en/home/insights/2022/12/sustainability-reporting-survey.html
Lavin, J. F., & Montecinos-Pearce, A. A. (2021). ESG Disclosure in an Emerging Market: An Empirical Analysis of the Influence of Board Characteristics and Ownership Structure. Sustainability, 13(19), Article 10498. https://doi.org/10.3390/su131910498
Ma, Y., Ahmad, M. I., & Torelli, R. (2024). Board Gender Diversity and ESG Disclosure: The Moderating Role of Audit Committee. Corporate Social Responsibility and Environmental Management, 31(6), 5971–5983. https://doi.org/10.1002/csr.2895
Mallidis, I., Giannarakis, G., Sariannidis, N., & Garefalakis, A. (2024). Impact of Board Gender Diversity on Environmental, Social and ESG Controversies Performance: The Moderating Role of United Nations Global Compact and ISO. Journal of Cleaner Production, 444, Article 141047. https://doi.org/10.1016/j.jclepro.2024.141047
Mehmood, A., De Luca, F., & Quach, H. (2023). Investigating How Board Gender Diversity affects Environmental, Social and Governance Performance: Evidence from The Utilities Sector. Utilities Policy, 83(101588). https://doi.org/10.1016/j.jup.2023.101588.
Michelon, G., Pilonato, S., & Ricerri, F. (2020). Creating Legitimacy for Sustainability Assurance Practices: Evidence from Sustainability Restatements. Journal of Business Ethics, 162(4), 703–720. https://doi.org/10.1007/s10551-018-3999-1
Obeng, V. A., Farooq, M. B., Miglani, S., & Jalali, F. (2025). Sustainability Assurance Quality and Board Gender Diversity: Moderating Role of Assurance Level and Provider Type on the Extent of Assurance Procedures. Journal of Accounting & Organizational Change, 21(7), 90–117. https://doi.org/10.1016/j.intaccaudtax.2023.100579
Octavio, M. F. R., Setiawan, D., Aryani, Y. A., & Arifin, T. (2025). Ownership Structure and ESG Performance: An Empirical Analysis of Indonesian Companies. Asian Journal of Accounting Research, 1–26. https://doi.org/10.1108/AJAR-10-2024-0449
Odriozola, M. D., Blanco-González, A., & Baraibar-Diez, E. (2024). The Link of ESG Performance and Board Gender Diversity in European Firms. Corporate Social Responsibility and Environmental Management, 31(6), 5656–5669. https://doi.org/10.1002/csr.2881
Shi, X., & Zhang, Q. (2023). Understanding the Mechanism of Environmental, Social, and Governance Impact on Enterprise Performance in the Context of Sustainable Development. Corporate Social Responsibility and Environmental Management, 1–17. https://doi.org/10.1002/csr.2599
Sneideriene, A., & Legenzova, R. (2025). Greenwashing Prevention in Environmental, Social, and Governance (ESG) Disclosures: A Bibliometric Analysis. Research in International Business and Finance, 74, 102720. https://doi.org/10.1016/j.ribaf.2024.102720
Srivastava, A., & Anand. (2023). ESG Performance and Firm Value: The Moderating Role of Ownership Concentration. Corporate Ownership & Control, 20(3), 169–179. https://doi.org/10.22495/cocv20i3art11.
Temiz, H., & Acar, M. (2023). Board Gender Diversity and Corporate Social Responsibility Disclosure in Different Disclosure Environments. Corporate Social Responsibility and Environmental Management, 30(5), 2247–2264. https://doi.org/10.1002/csr.2481
Yadav, P., & Prashar, A. (2022). Board Gender Diversity: Implications for Environmental, Social, and Governance Performance of Indian Firms. International Journal of Productivity and Performance Management, 72(9), 2654–2673. https://doi.org/10.1108/IJPPM-12-2021-0689.
Yan, Z., Zhang, X., & Liu, S. (2023). The Effects of Female Executives on Financial Statement Comparability. Management Decision Economics, 1–18. https://doi.org/10.1002/mde.3892
Zharfpeykan, R., & Bai, Y. (2025). Board Gender Diversity and Corporate Environmental, Social and Governance Performance: Evidence from New Zealand Listed Firms. Pacific Accounting Review, 37(2), 243–270. https://doi.org/10.1108/PAR-01-2024-0011
Zhou, G., Liu, L., & Luo, S. (2022). Sustainable Development, ESG Performance, and Company Market Value: Mediating Effect of Financial Performance. Business Strategy and the Environment, 1–17. https://doi.org/10.1002/bse.3089
Zhu, N. (2024). Addressing Environment, Social and Governance Investment: Does Board Composition Matter? Heliyon, 10(20), e39134. https://doi.org/10.1016/j.heliyon.2024.e39134
Amorelli, M. F., & García Sánchez, I. M. (2023). Leadership in Heels: Women on Boards and Sustainability in Times of COVID-19. Corporate Social Responsibility and Environmental Management, 1–24. https://doi.org/10.1002/csr.2469
Ardi, R., & Meiden, C. (2023). Sustainability Assurance, Report Credibility, and Stakeholder Trust: Evidence from Indonesian Listed Firms. Jurnal Akuntansi Multiparadigma, 14(1), 112–127. https://doi.org/10.18202/jamal.2023.04.14006
Buchetti, B., Miquel-Flores, I., Perdichizzi, S., & Reguera-Alvarado, N. (2025). A Literature Review on Corporate Governance and ESG Research: Emerging Trends and Future Directions. International Review of Financial Analysis, 97(103754). https://doi.org/10.1016/j.irfa.2024.103754
Buertey, S. (2021). Board Gender Diversity and Corporate Social Responsibility Assurance: The Moderating Effect of Ownership Concentration. Corporate Social Responsibility and Environmental Management, 28(6), 1579–1590. https://doi.org/10.1002/csr.2121
Delgado Sánchez, V. P., Zorio-Grima, A., & Merello, P. (2026). Sustainability Reporting Assurance: Knowledge, Lags, Levels, and Providers in Leading Global Companies. Journal of Innovation & Knowledge, 12(100899). https://doi.org/10.1016/j.jik.2025.100899
Dewi, A. A., Saraswati, E., Rahman, A. F., & Atmini, S. (2023). Materiality, Stakeholder Engagement Disclosure, and Corporate Governance: Critical Elements for the Quality of Sustainability Reporting. Cogent Business & Management, 10(1), 2175437. https://doi.org/10.1080/23311975.2023.2175437
Eissa, A. M., Hamdy, A., & Diab, A. (2024). Governmental Ownership, Board Gender Diversity, and ESG Performance: Evidence From an Emerging Market. Sustainability, 16(16), 6963. https://doi.org/10.3390/su16166963
Fatima, T., & Elbanna, S. (2023). Corporate Social Responsibility Implementation: A Review and a Research Agenda towards an Integrative Framework. Journal of Business Ethics, 183(1), 105–121. https://doi.org/10.1007/s10551-022-05047-8
Glass, C., Cook, A., & Ingersoll, A. R. (2016). Do Women Leaders Promote Sustainability? Analyzing the Effect of Corporate Governance Composition on Environmental Performance. Business Strategy and the Environment, 25, 495–511. https://doi.org/10.1002/bse.1879
Gunawan, J., Permatasari, P., & Tilt, C. A. (2021). The Evolution of Sustainability Reporting Practices in Indonesia. Journal of Cleaner Production, 370(133524). https://doi.org/10.1016/j.jclepro.2022.133524
Handayati, P., Tham, Y. H., Yuningsih, Y., Sun, Z., Nugroho, T. R., & Rochayatun, S. (2025). ESG Performance and Corporate Governance—The Moderating Role of the Big Four Auditors. Journal of Risk and Financial Management, 18(1), 1–19. https://doi.org/10.3390/jrfm18010031
Indyanti, N. M. D., & Zulaikha. (2017). Pengaruh Sustainability Reporting dan Sustainability Assurance terhadap Nilai Perusahaan. Jurnal Akuntansi Dan Auditing Indonesia, 21(2), 85–96. https://doi.org/10.20885/jaai.vol21.iss2.art1
Jung, Y., & Yoo, H. (2023). Environmental, Social, and Governance Activities and Firm Performance: Global Evidence and the Moderating Effect of Market Competition. Corporate Social Responsibility and Environmental Management, 1–10. https://doi.org/10.1002/csr.2518
KPMG. (2022). Survey of Sustainability Reporting 2022. https://home.kpmg/xx/en/home/insights/2022/12/sustainability-reporting-survey.html
Lavin, J. F., & Montecinos-Pearce, A. A. (2021). ESG Disclosure in an Emerging Market: An Empirical Analysis of the Influence of Board Characteristics and Ownership Structure. Sustainability, 13(19), Article 10498. https://doi.org/10.3390/su131910498
Ma, Y., Ahmad, M. I., & Torelli, R. (2024). Board Gender Diversity and ESG Disclosure: The Moderating Role of Audit Committee. Corporate Social Responsibility and Environmental Management, 31(6), 5971–5983. https://doi.org/10.1002/csr.2895
Mallidis, I., Giannarakis, G., Sariannidis, N., & Garefalakis, A. (2024). Impact of Board Gender Diversity on Environmental, Social and ESG Controversies Performance: The Moderating Role of United Nations Global Compact and ISO. Journal of Cleaner Production, 444, Article 141047. https://doi.org/10.1016/j.jclepro.2024.141047
Mehmood, A., De Luca, F., & Quach, H. (2023). Investigating How Board Gender Diversity affects Environmental, Social and Governance Performance: Evidence from The Utilities Sector. Utilities Policy, 83(101588). https://doi.org/10.1016/j.jup.2023.101588.
Michelon, G., Pilonato, S., & Ricerri, F. (2020). Creating Legitimacy for Sustainability Assurance Practices: Evidence from Sustainability Restatements. Journal of Business Ethics, 162(4), 703–720. https://doi.org/10.1007/s10551-018-3999-1
Obeng, V. A., Farooq, M. B., Miglani, S., & Jalali, F. (2025). Sustainability Assurance Quality and Board Gender Diversity: Moderating Role of Assurance Level and Provider Type on the Extent of Assurance Procedures. Journal of Accounting & Organizational Change, 21(7), 90–117. https://doi.org/10.1016/j.intaccaudtax.2023.100579
Octavio, M. F. R., Setiawan, D., Aryani, Y. A., & Arifin, T. (2025). Ownership Structure and ESG Performance: An Empirical Analysis of Indonesian Companies. Asian Journal of Accounting Research, 1–26. https://doi.org/10.1108/AJAR-10-2024-0449
Odriozola, M. D., Blanco-González, A., & Baraibar-Diez, E. (2024). The Link of ESG Performance and Board Gender Diversity in European Firms. Corporate Social Responsibility and Environmental Management, 31(6), 5656–5669. https://doi.org/10.1002/csr.2881
Shi, X., & Zhang, Q. (2023). Understanding the Mechanism of Environmental, Social, and Governance Impact on Enterprise Performance in the Context of Sustainable Development. Corporate Social Responsibility and Environmental Management, 1–17. https://doi.org/10.1002/csr.2599
Sneideriene, A., & Legenzova, R. (2025). Greenwashing Prevention in Environmental, Social, and Governance (ESG) Disclosures: A Bibliometric Analysis. Research in International Business and Finance, 74, 102720. https://doi.org/10.1016/j.ribaf.2024.102720
Srivastava, A., & Anand. (2023). ESG Performance and Firm Value: The Moderating Role of Ownership Concentration. Corporate Ownership & Control, 20(3), 169–179. https://doi.org/10.22495/cocv20i3art11.
Temiz, H., & Acar, M. (2023). Board Gender Diversity and Corporate Social Responsibility Disclosure in Different Disclosure Environments. Corporate Social Responsibility and Environmental Management, 30(5), 2247–2264. https://doi.org/10.1002/csr.2481
Yadav, P., & Prashar, A. (2022). Board Gender Diversity: Implications for Environmental, Social, and Governance Performance of Indian Firms. International Journal of Productivity and Performance Management, 72(9), 2654–2673. https://doi.org/10.1108/IJPPM-12-2021-0689.
Yan, Z., Zhang, X., & Liu, S. (2023). The Effects of Female Executives on Financial Statement Comparability. Management Decision Economics, 1–18. https://doi.org/10.1002/mde.3892
Zharfpeykan, R., & Bai, Y. (2025). Board Gender Diversity and Corporate Environmental, Social and Governance Performance: Evidence from New Zealand Listed Firms. Pacific Accounting Review, 37(2), 243–270. https://doi.org/10.1108/PAR-01-2024-0011
Zhou, G., Liu, L., & Luo, S. (2022). Sustainable Development, ESG Performance, and Company Market Value: Mediating Effect of Financial Performance. Business Strategy and the Environment, 1–17. https://doi.org/10.1002/bse.3089
Zhu, N. (2024). Addressing Environment, Social and Governance Investment: Does Board Composition Matter? Heliyon, 10(20), e39134. https://doi.org/10.1016/j.heliyon.2024.e39134
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