The impact of CEO compensation and governance disclosure on firm value moderated by integrated reporting

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Abstract

Firm value can increase market confidence, not only for current performance but also for the company’s prospects in the future (Fama, 1978). To prove empirically the effect of chief executive officer (CEO) compensation and governance disclosure on firm value moderated by integrated reporting (IR) is the aim of this study. The study population is Asian companies registered in the Integrated Reporting database examples. Based on the specified sample criteria, 135 secondary data were obtained from 2019–2021. The analysis tool used to process the data is WarpPLS 7.0. This study gives the result that firm value is influenced by governance disclosure and IR moderates the effect of governance disclosure on firm value, while CEO compensation has no effect on firm value. The practical implications of this study are to confirm the importance of corporate governance disclosure, the role of IR in increasing the value of companies, and its impact on investment decisions. In addition, this study is also useful for regulators in relation to the preparation of corporate financial reporting policies so that they are transparent and accountable.

Keywords: Integrated Reporting, CEO Compensation, Governance Disclosures, Firm Values

Authors’ individual contributions: Conceptualization — S.D.U.; Methodology — Z.M.; Software — Z.M.; Validation — S.D.U.; Formal Analysis — S.D.U.; Investigation — Z.M.; Resources — Z. M.; Data Curation — Z.M.; Writing — Original Draft — Z.M.; Writing — Review & Editing — S.D.U.; Visualization — Z.M.; Supervision — S.D.U.; Project Administration — Z.M.; Funding Acquisition — S.D.U.

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

JEL Classification: G32, G34, G41

Received: 12.06.2023
Accepted: 12.07.2024
Published online: 17.07.2024

How to cite this paper: Utomo, S. D., & Machmuddah, Z. (2024). The impact of CEO compensation and governance disclosure on firm value moderated by integrated reporting. Corporate Board: Role, Duties and Composition, 20(2), 27–33. https://doi.org/10.22495/cbv20i2art3