AUDIT COMMITTEE CAPABILITY, INDEPENDENT COMMISSIONERS, AND FINANCIAL PERFORMANCE: DOES CORPORATE GREENWASHING IMPAIR OVERSIGHT QUALITY?

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides empirical evidence on how ESG decoupling moderates the governance-financial performance link, relevant for studies on greenwashing and corporate governance.

🏢実務担当者:Highlights the importance of ensuring sustainability disclosure credibility to maintain effective board oversight and investor trust.

🏛政策担当者:Supports the case for mandatory third-party verification of sustainability reports to mitigate greenwashing risks.

This study aims to examine the influence of independent directors and audit committee capabilities on financial performance, and to analyses the role of corporate greenwashing (ESG decoupling) as a moderating variable in this relationship. Using an explanatory quantitative approach with purposive sampling, the study sample comprises 50 listed companies in the Consumer Non-Cyclicals sector on the Indonesia Stock Exchange (IDX) over the period 2021–2025, resulting in a total of 250 firm-year observations. Secondary data, comprising financial and governance reports, were extracted from the IDX, whilst ESG scores were obtained from the Refinitiv Eikon and Bloomberg databases, which were subsequently analysed using Moderated Regression Analysis (MRA) via SPSS software. The results of the empirical testing indicate that, in part, Independent Commissioners and Audit Committee Capability have a significant positive effect on Financial Performance (Return on Assets), confirming the effectiveness of governance oversight functions in mitigating agency costs. However, the interaction model test demonstrated that corporate greenwashing significantly weakens the positive influence of independent directors and audit committee capabilities on financial performance. The gap between sustainability disclosures and high sustainability performance gives rise to a new form of non-financial information asymmetry that limits the effectiveness of audit committee oversight and reduces the scepticism of independent board members, thereby reducing the efficiency of corporate capital allocation and company profitability. The implications of this research urge regulators to establish mandatory third-party verification policies to mitigate the risk of manipulation of non-financial reporting in Indonesia.

• semanticscholar https://journal.ppmi.web.id/index.php/jakpg/article/download/2026-06-30/2603first seen 2026-08-09 06:02:03