Corporate Social Responsibility (CSR) and Good Corporate Governance (GCG) as Sustainable Governance Strategies: An Empirical Study of the Company Value within the Metal and Mineral Sub-Sector in 2018-2024

Abstract

This research aims to analyze the influence of Corporate Social Responsibility (CSR) and Good Corporate Governance (GCG) on company value in the metals and minerals sub-sector in Indonesia. This sector also presents a high level of social and environmental risk. The population of this research is the companies which operate in the metals and minerals sub-sector listed on the Indonesia Stock Exchange (IDX) for the 2018 – 2024 period. The sample is selected using purposive sampling, comprising 5 companies and 35 observations. The analysis method applied in this research is multiple regression with SPSS Version 26. The result shows that CSR has a negative and significant influence on firm value, while GCG has a positive and significant influence on firm value. Simultaneously, CSR and GCG significantly influence firm value, although there are other influential variables outside the model. This research avoid the generalization of the results by limiting the sample solely to companies within metals and minerals sub-sector. Furthermore, CSR is measured using a quantitative index that does not capture program quality, and GCG is only proxied by board size. This research contributes by putting CSR and GCG in the context of high-risk extractive industries and presenting empirical evidence from Indonesia over a seven-year period. This research improves the understanding of stakeholder and agency theory by discovering that CSR in resource industries is often perceived negatively by investors as a cost liability, while GCG is proven to be a crucial factor in maintaining sustainable investor confidence and firm value.