The link between CEO compensation, environment, social, governance disclosure on firm value is mediated by integrated reporting

Abstract

Exploring directly the influence of CEO compensation, environmental, social, and governance disclosure on firm value and exploring indirectly through integrated reporting is the aim of this research. All Asian companies that have registered accounts in the database of integrated reporting examples make up the study's population. The study observes data from 2019 to 2023. Based on the data obtained and after going through the sample selection process, a total of 225 data points were analyzed. A tool for data analysis used is WarpPLS version 7.0. The study's findings indicate that CEO compensation, environmental, social, and governance disclosure directly affect firm value. Indirectly, integrated reporting disclosure mediates the influence of environmental, social, and governance disclosures on firm value. However, integrated reporting does not mediate the effect of CEO compensation on firm value. The R-squared value for the direct effect is very low, at only 4%. The practical implications of this research highlight the importance of integrated reporting disclosure, environmental, social, and governance disclosures, and CEO compensation in influencing firm value, as disclosure enhances the company's image among stakeholders. Additionally, disclosure can serve as an indicator of the company's sustainability performance in implementing strategies or policies, including those from regulators.