When Governance Meets Technology: Can Financial Performance and ESG Create Firm Value?

Siti Nurhaliza; Rintan Nuzul Ainy

doi:10.24843/EJA.2026.v36.i07.p10

Authors

Siti Nurhaliza Faculty of Economics and Business, Universitas Ahmad Dahlan, Indonesia
Rintan Nuzul Ainy Faculty of Economics and Business, Universitas Ahmad Dahlan, Indonesia

DOI:

https://doi.org/10.24843/EJA.2026.v36.i07.p10

Keywords:

ESG, Financial Performance, Firm Value, IT Governance

Abstract

Financial performance and environmental, social, and governance (ESG) are considered in firm valuation, while the effectiveness of both may depend on information technology governance. This study examines the effects of financial performance and ESG on firm value and the moderating role of IT governance. Secondary data were obtained from annual reports and Refinitiv Eikon for mining companies listed on the Indonesia Stock Exchange during 2015–2024. A purposive sampling procedure yielded 86 observations, which were analyzed using Partial Least Squares Structural Equation Modeling. The results show that financial performance positively affects firm value, whereas ESG has a negative effect. IT governance weakens the effect of financial performance but strengthens the effect of ESG on firm value. Accordingly, investors still prioritize financial performance, while IT governance is more effective in enhancing the credibility of sustainability reporting.

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