Optimizing Risk Management Disclosure in Indonesian Banking: The Role of Internal Governance and Governance-Compliance Quality

This study examines the effects of managerial ownership, independent commissioners, and risk monitoring committee activity on risk management disclosure, with governance-compliance quality as a moderating variable. Drawing on Agency Theory and a contingency perspective, the study analyzes 123 bank-year observations from 41 Indonesian listed banks during 2022–2024. Random-effects panel regression incorporates year effects and bank-clustered standard errors. The findings reveal that risk monitoring committee activity and governance-compliance quality positively influence risk management disclosure, whereas managerial ownership and independent commissioners show no significant effects. Governance-compliance quality does not significantly moderate these relationships, while the negative interaction involving committee activity lacks robustness. These findings extend corporate governance literature by demonstrating that active risk oversight and regulatory compliance operate as distinct, largely additive mechanisms rather than complementary governance functions. Bank managers should prioritize effective risk oversight and sustained regulatory compliance to strengthen risk disclosure transparency.