Corporate governance mechanisms, corporate sustainability concerns and company financial performance : evidence from public listed Indonesian commercial banking companies

This thesis investigates the relationship between corporate governance mechanisms, corporate sustainability concerns and company financial performance for public listed of Indonesian commercial banking companies throughout the period 2007-2014. Corporate governance mechanisms are defined by the construct of the board of commissioners' (BoCs) role, executive compensation and ownership structure. Meanwhile, corporate sustainability concerns are defined by the corporate social responsibility activities, which are disclosed in the bank's published reports (i.e., annual report or sustainability report). This thesis also employs the combination of two different measures of company financial performance: company financial health and market value, measured by the Altman's Z-Score Revision Model and Tobin's Q, respectively.The thesis employs a decision-making model framework, the Throughput Model, which is developed by Rodgers (1997) to describe the relationship among those constructs by adopting the shareholder and stakeholders perspectives. Data is presented from 252 firm-year observations as an unbalanced data panel of 39 commercial banking companies publicly listed on the Indonesia Stock Exchange throughout 2007-2014. Then, Partial Least Square-Structural Equation Modelling (PLS-SEM) is used to analyse data and provide results about potential influences among those aforementioned constructs.The thesis contains seven chapters, including three chapters of empirical findings, which are presented in chapters four, five and six. For each chapter of empirical findings, the study built and tested the potential influences among the constructs in four different research models: a simultaneous and separate current period analysis, a year time-lagged analysis, a moderation effect analysis and a reverse (changing) direction of framework analysis.The first empirical finding is presented in chapter four. It addresses the issue of whether mandatory internal corporate governance mechanisms, particularly the role of board of ...