Corporate social responsibility on SKI KEHATI index corporate performance: A case study

Abstract

Many companies are now increasingly aware of the importance of implementing Corporate Social Responsibility (CSR) as part of their business strategy and as the embodiment of the company's concern to society. This study specifically examines the SRI-KEHATI Index which is a new index that specifically includes issuers that have excellent performance in encouraging sustainable businesses, as well as having awareness of the environment, social and good corporate governance using an analysis technique that is regression weight in structural equation modelling used to examine the relationship between the variables. The model for this research is illustrated by the path diagram. It proves that the environment influences the company's financial performance, showing that the better the environmental performance, the respondent will respond positively through the fluctuations in the company's stock price which can improve the company's financial performance. The higher the corporate governance, the higher the corporate performance will be. Corporate Social Responsibility disclosure activities have a significant influence on the company's financial performance. The higher the social responsibility, the higher the corporate performance SRI-KEHATI. The strength of the theory of organizational legitimacy in the content of corporate social responsibility in developing countries has two elements; first, the capability to place profit maximization motives and second this makes a clearer picture of the company's motivation to increase its social responsibility.