Analysis of ESG Disclosure, Board Diversity, and Financial Performance on Firm Value with Firm Size Moderation

Abstract

Efforts to enhance the company's value focus on ensuring its long-term viability by applying corporate governance principles outlined in Environmental, Social, and Governance (ESG) disclosures. This study aims to determine the impact of the ESG disclosure index, board diversity, and financial performance on company value, with firm size as a moderating variable, in enterprises that are publicly traded on the Indonesia Stock Exchange. Out of a total of 79 companies in the population, 67 were chosen through purposive sampling. The data utilized consists of secondary data extracted from financial reports and annual reports spanning from 2018 to 2022. Data analysis involved multiple regression analysis and moderation to assess the effects of independent variables ESG, gender diversity (GENDER), and return on equity (ROE) on the dependent variable Tobin's Q, and to examine how firm size influences these relationships. The results indicate that the ESG disclosure index, board diversity, and financial performance positively influence company value. However, the inclusion of firm size as a moderating variable weakens the influence of the ESG disclosure index and board diversity on firm value. Moreover, firm size does not alter the relationship between financial performance (ROE) and firm value.