The effect of stakeholder pressure and corporate governance on the sustainability report quality

Abstract Purpose The purpose of this study is to examine the effects of stakeholder pressure and corporate governance on the quality of sustainability report. This study uses environment, employee, consumer and shareholder as stakeholders, while board of commissioner effectiveness and family ownership are used as corporate governance components. Design/methodology/approach This research uses multiple regression method with total observations of 123 sustainability reports of listed firms on Indonesia Stock Exchange in 2010-2014. Findings The result shows that companies which get pressure from environment and consumer have higher quality of sustainability report than other firms. Pressure from employee positively affects the quality of sustainability report. Meanwhile, pressure from shareholders has no effect on the quality of sustainability report. Board of commissioner effectiveness positively affects the quality of sustainability report, and family ownership has no effect on the quality of sustainability report. Originality/value This research reveals how various types of stakeholders and corporate governance in Indonesia react to corporate social responsibility and thus influence the quality of sustainability report, which has not been discussed by previous studies.