THE IMPACT OF CORPORATE GOVERNANCE AND SUSTAINABILITY PERFORMANCE ON FIRM VALUE: EVIDENCE FROM ENERGY SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE
DOI:
https://doi.org/10.56127/ijme.v5i1.2591Keywords:
Corporate Governance, Sustainability Performance, Firm Value, Energy SectorAbstract
This study investigates the impact of corporate governance mechanisms and sustainability performance on firm value in energy sector companies listed on the Indonesia Stock Exchange during the 2020–2024 period. Using balanced panel data and employing a Fixed Effects Model, the analysis examines the roles of board independence, board size, audit committee, institutional ownership, sustainability performance, and firm size in explaining firm value. The results show that independent commissioners have a positive and significant effect on firm value, indicating that effective board independence enhances monitoring quality and investor confidence. Other governance attributes and sustainability performance do not exhibit significant effects, suggesting that formal governance structures and sustainability initiatives are not immediately reflected in market valuation. The overall model is statistically significant and explains a moderate proportion of the variation in firm value. These findings imply that investors in the energy sector prioritize governance quality over structural compliance and short-term sustainability disclosures. The study provides empirical evidence on the relevance of corporate governance in shaping firm value within a capital-intensive and environmentally sensitive industry context.
References
Agustina, I., Aisjah, S., & Indrawati, N. K. (2016). The Role of Risk and Sustainability Management in the Effects of Corporate Governance on Firm Value. Journal of Research in Business and Management, 4(6), 14-32.
Alofaysan, H., Jarboui, S., & Binsuwadan, J. (2024). Corporate sustainability, sustainable governance, and firm value efficiency: Evidence from saudi listed companies. Sustainability, 16(13), 5436.
Alsayegh, M. F., Abdul Rahman, R., & Homayoun, S. (2022). Corporate sustainability performance and firm value through investment efficiency. Sustainability, 15(1), 305.
Amin, V., Faghani Makrani, K., & Zabihi, A. (2018). The study of the relationship between government firms, dimensions of corporate sustainability performance and firm value. Journal of Governmental Accounting, 4(2), 75-92.
Budiharjo, R. (2020). Effect of environmental performance, good corporate governance and leverage on firm value. American Journal of Humanities and Social Sciences Research (AJHSSR), 4(8), 455-464.
Haryono, U., Iskandar, R., Paminto, A., & Ulfah, Y. (2016). Sustainability performance: It’s impact on risk and value of the firm. Corporate Ownership & Control, 14(1), 278-286.
Husnaini, W., & Basuki, B. (2020). ASEAN corporate governance scorecard: sustainability reporting and firm value. The Journal of Asian Finance, Economics and Business, 7(11), 315-326.
Mendra, Y., Saitri, P. W., & Mariyatni, N. P. S. (2021). Good corporate governance, corporate social responsibility, and sustainability report to firm value. International Journal of Environmental, Sustainability, and Social Science, 2(1), 17-21.
Mukhtaruddin, M., Ubaidillah, U., Dewi, K., Hakiki, A., & Nopriyanto, N. (2019). Good corporate governance, corporate social responsibility, firm value, and financial performance as moderating variable. Indonesian Journal of Sustainability Accounting and Management, 3(1), 55â-64.
Munir, A., Khan, F. U., Usman, M., & Khuram, S. (2019). Relationship between corporate governance, corporate sustainability and financial performance. Pakistan Journal of Commerce & Social Sciences, 13(4).
Rusmanto, T., & Lisal, M. (2019). The influence of good corporate governance, financial and environmental performance towards firm value: Case of manufacturing companies in Indonesia. International Journal of Innovative Technology and Exploring Engineering, 9(1), 4610-4613.
Suhartini, D., Tjahjadi, B., & Fayanni, Y. (2024). Impact of sustainability reporting and governance on firm value: insights from the Indonesian manufacturing sector. Cogent Business & Management, 11(1), 2381087.
Wahidahwati, W., & Ardini, L. (2021). Corporate governance and environmental performance: How they affect firm value. The Journal of Asian Finance, Economics and Business, 8(2), 953-962.
Widigdo, I. (2013). Effect of corporate social performance, intellectual capital, ownership structure, and corporate governance on corporate performance and firm value (studies on companies listed in the Sri Kehati index). International Journal of Business, Economics and Law, 2(1), 87-106.
Downloads
Published
How to Cite
Issue
Section
Citation Check
License
Copyright (c) 2026 Yusuf, Danang Choirul Umam
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
