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Entrepreneurship and Sustainability Issues Open access
Journal Impact FactorTM (2022) 1.7
Journal Citation IndicatorTM (2022) 0.42
Received: 2019-07-15  |  Accepted: 2019-11-28  |  Published: 2020-03-30

Title

The effect of corporate governance structure on financial difficulties


Abstract

This study aims to examine the effect of Corporate Governance Structure (CG) and Corporate Social Responsibility (CSR) on Financial Difficulties. The contribution of this research is to explore the truth of CG goals and achieve quality CSR reporting and can provide solutions to conditions before and when companies experience financial difficulties and provide things that are considered important to anticipate the possibility of financial difficulties. CG in this study uses the size of the audit committee and independent commissioners, then CSR is measured by the quality of CSR disclosure. The data analysis method used is multiple linear regression. The results of this study are the audit committee has no effect on financial difficulties but the independent commissioner has a negative effect on financial difficulties. The contribution of the proportion of independent directors apparently contributed more to the proportion of the number of audit committees. The proportion of the audit committee is not able to minimize or even be a solutive effect on the financial difficulties of companies in Indonesia. The audit committee is a form of responsibility for compliance with government regulations only. The test results also support the influence of CSR on financial difficulties assuming that the quality of CSR disclosure has a significant negative effect on corporate financial difficulties. Disclosure and implementation of CSR activities can have an effect to minimize if in the future the company experiences financial difficulties, the guarantee of funds will remain well distributed so as to minimize the financial difficulties experienced by the company


Keywords

quality, disclosure, corporate governance, corporate social responsibility, audit committee, independent commissioner


JEL classifications

G30 , G20


URI

http://jssidoi.org/jesi/article/490


DOI


Pages

1803-1818


Funding

This research was supported by the Dana Penelitian dan Pengabdian kepada Masyarakat, which has received funding from the Faculty of Economics and Business, Universitas Brawijaya Malang, Indonesia.

This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Andayani, Wuryan
University of Brawijaya, Malang, Indonesia https://ub.ac.id
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Daud, Dalila
UiTM Cawangan Negeri Sembilan, Kuala Pilah District, Malaysia https://nsembilan.uitm.edu.my
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Journal title

Entrepreneurship and Sustainability Issues

Volume

7


Number

3


Issue date

March 2020


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

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References