CEO duality, digital governance, and environmental, social, governance: Innovation-driven firm value in the digital era

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Abstract

In the era of digital transformation and increasing sustainability demands, corporate governance has become a critical factor in creating company value (Uddin et al., 2021). This phenomenon is not only occurring at the global level but also in Indonesia, where companies are beginning to adopt digital corporate governance (DCG) practices and focus on environmental, social, and governance (ESG) performance as part of their business strategy (Uzliawati et al., 2023). This study investigates the impact of corporate governance structures, technological innovation, and sustainability performance on firm value among publicly listed companies in Indonesia. The analysis, employing structural equation modelling-partial least squares (SEM-PLS), is based on a sample of 120 firms spanning the period from 2020 to 2024. The findings reveal that robust governance mechanisms and digital innovation significantly enhance sustainability outcomes, which in turn positively influence firm value. These results underscore the strategic importance of aligning governance practices with innovation and ESG initiatives to drive long-term value creation. The study contributes to the literature on emerging markets by highlighting the role of integrated governance and innovation frameworks in enhancing corporate performance. Practical implications are presented for policymakers and corporate leaders seeking to enhance governance and foster sustainable digital transformation.

Keywords: CEO Duality, Digital Corporate Governance, ESG Performance, Emerging Markets, Firm Value, SEM-PLS, Sustainability, Technological Innovation

Authors’ individual contribution: Conceptualization — H.G.F., L.H., and A.P.; Methodology — M., A.I.F., and A.K.; Validation — M., A.I.F., and A.K.; Writing — Original Draft — H.G.F., A.I.F., and A.P.; Writing — Review & Editing — H.G.F., A.I.F., and L.H.; Supervision — L.H. and A.P.; Funding Acquisition — H.G.F. and A.I.F.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C38, G34, M14, O32, Q56

Received: 11.09.2025
Revised: 10.10.2025; 17.02.2026
Accepted: 03.03.2026
Published online: 05.03.2026

How to cite this paper: Febrianto, H. G., Mikrad, Fitriana, A. I., Karim, A., Hakim, L., & Priharta, H. (2026). CEO duality, digital governance, and environmental, social, governance: Innovation-driven firm value in the digital era. Corporate Governance and Sustainability Review, 10(2), 56–65. https://doi.org/10.22495/cgsrv10i2p5