This study examines the influence of board structure on sustainability reporting quality and whether financial performance moderates this relationship in an emerging market context. Using panel data from 58 firms listed on the Indonesia Stock Exchange during 2019–2023, the study employs a fixed effects panel regression model. Sustainability reporting quality is measured using a Global Reporting Initiative (GRI)-based disclosure index, while board structure is captured by board size, foreign-educated board members, and the proportion of independent commissioners. The results show that board independence has a significant nonlinear relationship with sustainability reporting quality, following an inverted U-shaped pattern. This suggests that board independence improves reporting quality up to an optimal level, after which its effectiveness declines. In contrast, the proportion of foreign-educated board members exhibits a U-shaped relationship, indicating a threshold effect in which international educational exposure initially has a negative association with reporting quality at lower levels but becomes positive once a critical proportion is reached. Financial performance, measured by return on assets, does not significantly moderate the relationship between board characteristics and sustainability reporting quality. Overall, the findings highlight that governance effectiveness is context-dependent and bounded, and that financial capacity alone does not necessarily strengthen sustainability reporting practices.
Sapsudin et al. (Sat,) studied this question.