Enhancing Corporate Sustainable Performance: The Role of Director Quality and Corporate Strategies

Abstract

Companies in Indonesia are currently facing issues regarding the environmental impact of their operations. This is reflected in data from the Law Enforcement Division of the Ministry of Environment and Forestry, which shows an increase in complaints, inspections, and administrative sanctions related to environmental violations after the COVID-19 pandemic. This reflects a lack of corporate commitment to sustainable business practices. The objective of this research is to empirically investigate how director skills, director characteristics, and corporate strategy influence corporate sustainable performance. The research involved 235 industrial companies listed on the Indonesian Stock Exchange during 2022–2023. Secondary data were used, with purposive sampling employed for sample selection, and the data were analyzed using moderated regression analysis. The results of this study indicate that director characteristics and director skills positively influence corporate sustainability performance. However, corporate strategy moderates this relationship by weakening the effect of both director characteristics and director skills on corporate sustainability performance. Future research could involve collaborative efforts to minimize the subjectivity inherent in content analysis. Additionally, conducting studies in different time periods may help eliminate the potential influence of the COVID-19 pandemic on the results.