The mediation effect of firm performance on the association between Two-tier Independent Boards and Green Innovation Practices: evidence from Indonesia

IF 1 Q4 MANAGEMENT

Intangible Capital Pub Date : 2024-02-20 DOI:10.3926/ic.2367

Mahsina Mahsina, N. Soewarno

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引用次数: 0

Abstract

Purpose: This research examines the role of firm performance in the effect of a two-tier independent board on green innovation practices.Design/methodology/approach: This study employs a simple mediation model-4 using the Hayes Process approach to OLS regression with the R package. The dataset uses a total 518 public companies listed on the Indonesia Stock Exchange for 2017 to 2019, having 1,554 firm-year observations. Findings: The study revealed, based on the two-tier system, the role of a composite independent board on firm performance and green innovation is positive and significant. However, individual results for both independent commissaries and directors in terms of firm performance and green innovation practices are not significant. This result implies that a composite of independent boards is essential to reduce and mitigate the failure of corporate governance.Research limitations/implications: This research only applied a sample of companies from one country which adopted two-tier system. Future research might apply as a comparative analysis of those countries group with two-tier system versus countries group with one-tier system.Practical implications: First, companies need to enhance the knowledge and expertise of both independent directors and independent commissaries to improve their roles. Second, it is important to provide support for the campaign and incentives for green innovation practices. Third, insight drawn from this study leads to the latest regulation from the Financial Services Authority (as the representative of the Indonesian government), whereby independent directors are no longer mandatory for publicly listed companies starting in December 2021 and must be evaluated because the composite independent board is an effective tool to execute green projects and to accelerate the SDG agenda in 2030.Social Implications: The social implication of this study is companies’ awareness to produce more eco-based products, which are expected by stakeholders, can be actualized. Also, public perception shows companies with green products have better performance.Originality/value: This research is the first study examining the mediating role of firm performance on the effect of a two-tier independent board on green innovation practices. Second, this study introduces the latest methodology for the simple mediation model using a Hayes-based approach in the field of accounting with an open-source software R package.

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公司业绩对两级独立董事会与绿色创新实践之间关联的中介效应：来自印度尼西亚的证据

目的：本研究探讨了企业绩效在两级独立董事会对绿色创新实践的影响中的作用：本研究采用简单中介模型-4，使用 Hayes Process 方法和 R 软件包进行 OLS 回归。数据集使用了2017年至2019年在印度尼西亚证券交易所上市的共518家上市公司，共1554个公司年观测值。研究结果研究发现，基于双层体系，复合型独立董事会对公司绩效和绿色创新的作用是正向且显著的。然而，独立小卖部和董事在企业绩效和绿色创新实践方面的个体结果并不显著。这一结果表明，复合型独立董事会对于减少和缓解公司治理失灵至关重要：研究局限性/启示：本研究仅应用了一个国家采用两级制的公司样本。未来的研究可能会对采用两级制的国家组与采用一级制的国家组进行比较分析：首先，公司需要加强独立董事和独立专员的知识和专业技能，以提高他们的作用。第二，必须为绿色创新实践活动提供支持和激励。第三，从本研究中获得的启示有助于金融服务管理局（作为印尼政府的代表）制定最新法规，规定从 2021 年 12 月起，上市公司不再强制要求独立董事，必须对其进行评估，因为复合型独立董事会是执行绿色项目和加快 2030 年可持续发展目标议程的有效工具：本研究的社会意义在于，企业生产更多生态型产品的意识可以实现，这也是利益相关者的期望。此外，在公众看来，拥有绿色产品的公司会有更好的业绩：本研究首次探讨了企业绩效对两级独立董事会对绿色创新实践影响的中介作用。其次，本研究在会计领域引入了基于 Hayes 方法的简单中介模型的最新方法，并使用了开源软件 R 包。

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来源期刊

Intangible Capital MANAGEMENT-

CiteScore

1.50

自引率

16.70%

发文量

审稿时长

33 weeks

期刊介绍： The aim of Intangible Capital is to publish theoretical and empirical articles that contribute to contrast, extend and build theories that contribute to advance our understanding of phenomena related with management, and the management of intangibles, in organizations, from the perspectives of strategic management, human resource management, psychology, education, IT, supply chain management and accounting. The scientific research in management is grounded on theories developed from perspectives taken from a diversity of social sciences. Intangible Capital is open to publish articles that, from sociology, psychology, economics and industrial organization contribute to the scientific development of management and organizational science. Intangible Capital publishes scholar articles that contribute to contrast existing theories, or to build new theoretical approaches. The contributions can adopt confirmatory (quantitative) or explanatory (mainly qualitative) methodological approaches. Theoretical essays that enhance the building or extension of theoretical approaches are also welcome. Intangible Capital selects the articles to be published with a double bind, peer review system, following the practices of good scholarly journals. Intangible Capital publishes three regular issues per year following an open access policy. On-line publication allows to reduce publishing costs, and to make more agile the process of reviewing and edition. Intangible Capital defends that open access publishing fosters the advance of scientific knowledge, making it available to everyone. Intangible Capital publishes articles in English, Spanish and Catalan.