ESG performance and Corporate Governance—The moderating role of the Big Four auditors

Handayati, Puji ORCID: https://orcid.org/0000-0001-5798-7502, Tham, Yeut Hong, Yuningsih, Yuni ORCID: https://orcid.org/0000-0001-8241-1337, Sun, Zhiyue, Nugroho, Tatas Ridho and Rochayatun, Sulis ORCID: https://orcid.org/0000-0001-5798-7502 (2025) ESG performance and Corporate Governance—The moderating role of the Big Four auditors. Journal of Risk and Financial Management, 18 (1). ISSN 1911-8074

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Abstract

The purpose of this study is to investigate the impact of corporate governance on ESG performance in large publicly listed firms in Indonesia from 2016 to 2023. The study adopts both stakeholder-agency theory and resource dependency theory to explore the
relationship between sustainability assurance, board governance characteristics, and the extent of ESG performance. Fixed effects regression controlling both industry and year fixed effects is used to measure the relationship between sustainability assurance, corporate
governance characteristics, and ESG performance. We find a positive significant relationship between assurance sustainability reports and ESG performance. Additionally, we also document a positive association between sustainability committees and ESG performance.
Adopting the Big Four auditors as a moderating variable, we find a positive relationship between gender-diverse boards and firms audited by the Big Four auditors and sustainability performance. This result suggests that firms with gender-diverse boards audited by the Big
Four auditors enhance sustainability performance. Additional robustness tests using GMM estimation, conducted to address endogeneity concerns, corroborated the main test results.

Item Type:	Journal Article
Keywords:	ESG; sustainability assurance; gender diversity; sustainability committee; stakeholder-agency theory
Subjects:	14 ECONOMICS > 1402 Applied Economics > 140207 Financial Economics
Divisions:	Faculty of Economics > Department of Accounting
Depositing User:	Sulis Rochayatun
Date Deposited:	15 Jul 2026 08:05

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