The Effect of Good Corporate Governance, Leverage
and Company Profile on Risk Disclosure
Anita Elisabeth
1
, Wiwik Utami
2
{anita.elisabeth29@gmail.com
1
, wiwik.utami@mercubuana.ac.id
2
}
Universitas Mercu Buana, Jakarta, Indonesia
12
Abstract. This research aims to examine the effect of Good Corporate Governance,
leverage, and company profile on risk disclosure. Risk disclosure is the disclosure of
information relating to risks presented in a company's financial statements in
accordance with the type of risk studied. Good Corporate Governance in this research
consist of commissioners and directors 'meetings, attendance of commissioners and
directors' meetings and company size. This research is quantitative research on state-
owned companies listed on the Indonesia Stock Exchange in 2014-2018 using the entire
population in the study consisting of 20 populations and 100 observations. Multiple
regression analysis is performed to analyze the data. The results showed the presence of
board of commissioners and directors’ meetings, company size and company profile
influence on risk disclosure. While meeting frequency of board commissioners and
directors, leverage have no effect on risk disclosure.
Keywords: Good Corporate Governance, Leverage, Company Profile, Risk
Disclosures
1 Introduction
Financial information is a useful and useful record for companies in carrying out business
activities carried out every day. From these financial statements, it can be seen how healthy
the company is in carrying out its business activities. The business or business that is carried
out must contain risks both small, medium or large risks. So that there is a need for risk
disclosure. The more disclosed, the more transparent the company is. Disclosure of risk itself
is a principle implemented by the company to win the hearts of shareholders. And as an
indicator in looking at risk disclosure through financial information. Risk disclosure is a
condition in which financial statements play an active role, because risk disclosure is part of
accounting and investment practices (ICAEW, 1999 in Abraham and Cox, 2007).
Linsley and Shrives (2006) and Amran et al. (2009) categorizes risks in six types namely
financial risk, operations risk, empowerment risk, information processing and technology
risk, integrity risk, strategic risk. The measurement of risk disclosure is made by using the
total words examined in financial information. This measurement is used because it can
describe the risks of what is actually disclosed in the Financial Statements. Associated with
the disclosure of these risks, there are phenomena related to investment, namely Foreign
Direct Investment.
MICOSS 2020, September 28-29, Jakarta, Indonesia
Copyright © 2021 EAI
DOI 10.4108/eai.28-9-2020.2307512