EARNINGS QUALITY, BOARD DIVERSITY AND SUSTAINABILITY REPORTING: A STUDY OF INDONESIAN HOTEL COMPANIES

Abstract

This study examines the influence of earnings quality and board diversity on SR disclosure and its relationship towards firm performance. This quantitative study involves companies classified under the Indonesia Stock Exchange’s industrial classification of hotels, resorts, and cruise from 2021 to 2023. The study collects data through the company’s annual and sustainability reports and then analyses it using the Structural Equation Model—Partial Least Squares (SEM-PLS) method. There is a positive link between board nationality diversity and SR disclosure, further enhancing firms’ performance. However, earnings quality decreases the comprehensiveness of SR disclosure. These findings confirm that sustainability practices will boost the performance of Indonesian hotel companies if supported by diverse board members.