The Effect of Good Corporate Governance and Financial Performance on Firm Value: The Moderating Role of Environmental Disclosure

Abstract

This study examines whether good corporate governance and financial performance affect firm value and whether environmental disclosure strengthens or weakens these relationships. Good corporate governance is represented by institutional ownership, the proportion of independent commissioners, and the frequency of board of commissioners' meetings, while financial performance is proxied by return on equity. Environmental disclosure is measured using a GRI 300-based disclosure index. The study uses secondary data from annual reports, sustainability reports, and financial statements of food and beverage companies listed on the Indonesia Stock Exchange during 2022-2024. Through purposive sampling, 37 companies were selected, producing 111 firm-year observations. Panel data regression and moderated regression analysis were conducted using the Fixed Effect Model in EViews 13. The findings show that institutional ownership, return on equity, and environmental disclosure have positive and significant effects on firm value. The proportion of independent commissioners and board meeting frequency do not significantly affect firm value. Environmental disclosure strengthens the effect of institutional ownership and return on equity on firm value, but it does not moderate the effects of independent commissioners and board meeting frequency. These results suggest that the market rewards substantive monitoring, profitability, and credible sustainability transparency more than formal governance structures.