The Influence of Good Corporate Governance on the Enterprise Risk Management Disclosure and the Implications on Firm Value

Abstract

This research has a purpose to confirm whether ERM disclosure is able to mediate the relationship between GCG and firm value. This research utilizes several theories to support this research such as the agency theory and signaling theory. The research sample totals up to 40 non-financial companies that are listed in the IDX and participate in the GCG implementation research and ranking program held by IICG from 2012 until 2016. This research utilize the simple linear regression analysis and the multiple linear regression analysis using the SPSS release version 23 application for windows in testing the hypothesis. The research results show that GCG has a positive influence on ERM disclosure, ERM disclosure has a positive influence on firm value, GCG has a positive influence on firm value, and GCG has a positive influence on firm value through ERM disclosure as the mediating variable. These results show that the ERM disclosure variable is able to partially mediate the relationship between GCG and firm value.