IFRS Sustainability Standards Implementation Readiness: Does Board of Directors Matters?

Sustainability disclosure remains a dynamic and expanding area of research, particularly in light of the recent issuance of international sustainability standards, IFRS S1 and IFRS S2. This study investigates the effect of board size on a company’s readiness to implement sustainability disclosure in accordance with IFRS S1 and IFRS S2. Furthermore, it examines whether the presence of independent directors moderates the relationship between board size and readiness for sustainability disclosure under these standards. The research sample consists of non-financial companies listed on the Indonesian Stock Exchange during the years 2022 and 2023, totaling 652 firm-year observations. The analysis employs Moderated Regression Analysis (MRA). The findings reveal that board size has a significant effect on the readiness to implement sustainability disclosure standards. However, independent directors do not moderate the relationship between board size and sustainability disclosure readiness based on IFRS S1 and IFRS S2. This study contributes to the sustainability reporting literature by providing empirical evidence on the relationship between board characteristics and a company’s readiness to implement the newly introduced global sustainability disclosure standards, IFRS S1 and IFRS S2. This study advances the understanding of how governance structures may influence the adoption of these standards, particularly in emerging markets such as Indonesia.