Credibility is Key: How Board Independence Translates ESG Disclosure  into Firm Value in Indonesia

Ricky Yunisar Setiawan; Novitasari Eviyanti; Alvianita Gunawan Putri; Ranita Ramadhani

doi:10.24843/EJA.2026.v36.i03.p01

Authors

Ricky Yunisar Setiawan Faculty of Economics and Business, Universitas Palangka Raya, Indonesia
Novitasari Eviyanti Faculty of Economics and Business, Politeknik Negeri Semarang, Indonesia https://orcid.org/0000-0003-3467-4858
Alvianita Gunawan Putri Faculty of Economics and Business, Politeknik Negeri Semarang, Indonesia https://orcid.org/0000-0002-5843-4560
Ranita Ramadhani Faculty of Economics and Business, Politeknik Negeri Balikpapan, Indonesia

DOI:

https://doi.org/10.24843/EJA.2026.v36.i03.p01

Keywords:

ESG Disclosure, Firm value, Board Independence, Corporate governance, Emerging market

Abstract

This study examines the impact of Environmental, Social, and Governance (ESG) disclosure on firm value and the moderating role of board independence in an emerging market. Using Moderated Regression Analysis on 675 firm year observations from non-financial companies on the Indonesia Stock Exchange (2017-2023), the results reveal that ESG disclosure positively affects firm value. Furthermore, board independence significantly amplifies this relationship. This highlights that in emerging markets like Indonesia, robust governance is essential to translate sustainability reporting into credible, tangible corporate value. The findings suggest managers should integrate ESG strategies with strong independent oversight, and investors should
evaluate governance quality to verify the credibility of a firm's sustainability initiatives.

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