The Effect of Sales Growth and Independent Commissioner’s Supervision on Financial Performance: The Moderating Role of Corporate Social Responsibility

DOI

10.2991/aebmr.k.211124.037How to use a DOI?

Keywords

Agency theory; Corporate Social Responsibility; Financial performance; Independent commissioner; Sales growth; Stakeholder theory

Abstract

Various studies on sales growth and supervision of independent commissioners on financial performance have been carried out and based on agency theory. Agency theory explains that agents must act following the principal’s wishes. Sales growth and supervision of independent commissioners are needed to improve financial performance to meet the principal’s wishes. On the other hand, stakeholder theory explains that it is not enough for companies only to fulfill the principal’s wishes but must also pay attention to stakeholders’ interests. The company can realize its concern for stakeholders through Corporate Social Responsibility (CSR) activities. Based on these two theoretical perspectives, the researchers conducted this study to examine whether CSR activities can affect the relationship between sales growth and independent commissioner’s supervision on financial performance. The study was conducted on 59 manufacturing companies listed on the IDX (Indonesian Stock Exchange) for 2018-2020. This study uses multiple linear regression panel data. The study results prove that the higher the sales growth and the supervision of independent commissioners, the higher the financial performance. Related to the moderating role of CSR, it is proved that the increase in financial performance due to increased sales growth will weaken in companies with extensive CSR activities. Furthermore, significant CSR activities can strengthen the independent commissioner’s supervisory relationship to financial performance. The results of this study are expected to be used by the management of growing companies to be more careful in carrying out CSR activities. In addition, researchers suggest that companies with high independent commissioner supervision carry out many CSR activities.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Nadia Angelia
AU  - Devianty Kumalasari
AU  - Yulius Jogi Christiawan
PY  - 2021
DA  - 2021/11/25
TI  - The Effect of Sales Growth and Independent Commissioner’s Supervision on Financial Performance: The Moderating Role of Corporate Social Responsibility
BT  - Proceedings of the 6th International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 2021)
PB  - Atlantis Press
SP  - 247
EP  - 256
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211124.037
DO  - 10.2991/aebmr.k.211124.037
ID  - Angelia2021
ER  -