CORPORATE GOVERNANCE, CORPORATE SOCIAL RESPONSIBILITY, and FIRM RISK: THE CASE OF INDONESIAN-LISTED FIRMS

Implementation of good corporate governance and CSR need to be considered by companies in achieving more firm values. Those value depending on public interpretation, which is affecting to their stock prices. This research aims to proof linkage among corporate governance, CSR, and firm risk by theoretical and practical implications. Regarding theoretical implications, this study provides a model linking corporate governance, CSR, and firm risk. We use a sample data from 262 Indonesia listed firms and 1,252 firm year observations from 2010 to 2015. Our result show firms that adopt better corporate governance have a lower firm risk. Specifically, higher independent managerial ownership will reduce agency problem by combining their interest. Firms that spend high CSR expenses tend to have less volatile stock prices. This research conduct to provide such an information for corporate and investors to consider and analyze corporate governance and CSR in their decision making.  Keywords: Corporate Governance; Corporate social responsibility; Firm Risk; Stakeholder Theory