The Effect of Diversity of Board of Directors and Environmental Performance on Corporate Social Responsibility (Empirical Study of Companies Registered at the Ministry of Environment in 2020)

ABSTRACT


INTRODUCTION
The Lapindo mudflow in Sidoarjo is a phenomenon that causes flooding in this general area. It is characterized by a continuous flow of hot mud that moves in one direction. The industry known as PT Lapindo Brantas is to blame for the "hot mudflow" incident in Porong, Sidoarjo. In addition to paying compensation for areas affected by the mudflow, the government is also obliged to provide compensation for areas that do not include those affected by the mudflow. [6] . Due to the high mortality rate due to irresponsible land use, regional observers and the business world are encouraged to develop a sense of corporate social responsibility (CSR). The CSR process ensures that the company's natural resources are used responsibly. This is done with the hope that the company's natural resources can be preserved in the long term due to responsible activities, which will also ensure that the fragile natural ecological balance is not disturbed in the process. [2] .

ISSN: 2808-103X
Proceedings homepage: https://conferenceproceedings.ump.ac.id/index.php/pssh/issue/view/16 33 The obligation to fully disclose CSR, information, and transparency regarding the company's operations in the annual report is fully the responsibility of the company's management. One of the effective CSR implementation techniques is to improve how corporate governance is implemented within the organization. This responsibility is often delegated to the boards of directors in Indonesian companies, which are overseen by the boards of commissioners. Due to the implementation of a two-tier system in the company, the directors and the board of commissioners are responsible for dividing the company's duties among them. The board of directors' responsibilities includes setting the company's strategic goals, providing implementation leadership, supervising business management, and reporting to shareholders on their management [8].
Diversity within the board is desirable in a firm's board structure. Diversity, such as the presence of foreign directors, gender, and tenures that have been taken, can reflect diversity that can support corporate culture in decision making. This diversity can also be demonstrated through the tenure that has been taken. According to the findings of the investigation conducted by [20], the influence of the presence of foreign directors on CSR reporting in Jordan can be seen. The findings suggest that the presence of foreign directors has a beneficial effect on CSR. The presence of for eign directors adds value to the sector due to the additional knowledge and expertise they bring to the table, which can be used in the context of corporate social responsibility (CSR). Research on the effect of CEO characteristics on CSR performance was conducted by Huang. The length of the term of office is one element that must be considered. Based on the results of his research, there is a relationship between tenure and increased CSR. Therefore, a CEO takes a very long time to build his way to the point where he is consistently successful in CSR performance. Research conducted by Fuente et navy (AL). (2017), [20], [5], [10], [21], is considered. Article by Fuente et al. (AL)., 2017 examined the effect of having women on the board of directors on the disclosure of corporate social responsibility (CSR) data in companies listed on the Madrid Impact Exchange. Because the findings show that female directors sharing knowledge bonuses and behaviors are more receptive to discussing CSR, this benefits the sharing of CSR information. Therefore, the presence of female directors has a beneficial effect on corporate social responsibility.
In addition to the qualities mentioned above, environmental performance is another measure of corporate social responsibility disclosure. According to the findings of [22], company performance can contribute to creating a positive ( green ) environment. This environmental performance report is distributed so that stakeholders can evaluate the extent to which the company complies with applicable requirements. Meanwhile, Corporate Social Duty (CSR) refers to corporations' responsibility for their actions that impact humans, communities, and the environment in which humans and communities exist. The company will disclose this information to ensure that financial information is provided and information regarding the social and environmental impacts caused by the company's activities.
This research was conducted with the general objective of explaining the effect of the diversity of the board of directors as measured by Foreign Director, Term of Office, and Gender, on organizational performance. The researchers then included one more measure, Environmental Performance, and investigated how much impact this variable had on Corporate Social Responsibility (CSR) disclosures.

Agency theory
The relationship between principal and agent can be better understood with the help of a theory known as agency theory. Investors and shareholders are participants in an industry operating as a principle, whereas management is an example of an agent. According to research by Jensen and Meckling from 1976, the ownership structure of the modern industry has a separation of ownership and control, thus forming this relationship. The contractual agreement between the two parties makes provisions for this division in the company's ownership. According to this idea, the basic concept of delegating decision-making authority to agents in charge of business operations should be followed. Therefore, shareholders or investors have the responsibility to monitor and assess. The absence of shareholder power in management operations results in a lack of knowledge about the company's internal activities carried out by management. The utilization of computer graphics is one way that can be applied to achieve balance in the distribution of information. The implementation of CG is expected to provide added value to the information provided by the organization's management so that the information provided becomes transparent and reliable.

Foreign Director at CSR
The presence of foreign directors is expected to create added value for the company because it brings more varied input, experience, and ideas. This diversity encourages companies to improve further their CSR implementation. Research on the effect of having a foreign director on CSR reporting in Jordan was conducted by [20]. Based on studies conducted regarding the impact of foreign directors on CSR, this study views the presence of foreign directors as being able to provide added value for the implementation of CSR. This study was conducted to determine the impact of the presence of foreign directors on CSR. As a result of the increased ISSN: 2808-103X  [23]; [21]; [24]. Here's the theory, considering what's been said:

H1: Foreign Director has a positive effect on CSR Term of Office towards CSR
The length of each Director's office is considered one of the most important aspects of the board of directors. The Director's term of office indicates the length of time a director has worked in the company. Research on the effect of CEO characteristics on CSR performance was conducted by Huang. The length of the term of office is one element that must be considered. As a consequence of this, his research shows that there is a beneficial impact of long-term employment on CSR. Therefore, CSR performance will improve the longer a CEO stays in that role. Based on literature research on the effect of tenure and CSR, it is said that the longer the term of office of the Director will bring added value to the implementation of CSR. This was found regardless of the length of the Director's tenure (Huang, 2013; McCarthy et al., 2017; [5]). The following are hypotheses based on the statements: H2: The term of office of the Board of Directors positively affects CSR.

Gender in CSR
Gender is one of the characteristics that has attracted the attention of many researchers. The participation of female directors is expected to result in more precise supervision of the implementation of CSR, which in turn will provide added value for the company. Therefore, the presence of female directors is expected to have a good influence on the implementation of CSR. According to the findings of the study conducted by Fuente et al. (2017), [20], [5], [10], [21]. The paper by Fuente et al., (2017) investigates the effect that the presence of women on the board of directors has on the decisions of companies listed on the Madrid influence market to publish information about their corporate social responsibility efforts. According to the findings, female directors share more experiences with each other and are more receptive to dialogue on CSR; As a result, this has a positive effect on the disclosure of information regarding CSR. Therefore, having a female director on the board has a positive impact on the company's ability to fulfill its obligations to society. Since women are recognized as being able to transmit extra abilities and carry out stricter supervision, the presence of women is believed to be able to provide added value to businesses in the CSR implementation process because women constitute about half of the world's population (Fuente et al., 2017; [5], [10]). ; [21]. Even Huang argues that female CEOs have a significant influence on the environmental performance of their companies. The following hypotheses can be formed from statements as a result of deduction: H3: Gender of female directors has a positive effect on CSR.

Environmental Performance on CSR
Environmental performance refers to the company's overall performance with the main focus on the company's efforts to protect the environment and reduce environmental consequences that directly result from the company's operations. This is in line with previous research by [25], which found a substantial relationship between environmental performance and CSR. This finding follows the research findings. The following hypotheses can be derived from the statement: H4: Environmental Performance has a positive effect on CSR.

METHODE Independent variable Foreign Director
The Board of Directors is an important component of the organization in implementing GCG [26]. The Board of Directors is responsible for overseeing all company operations in their capacity as a business employee. It is the responsibility of the Director to make choices following his authority. [7] The presence of foreign directors in the company is measured using the following formula:

Length of service
In addition, the majority of the board of directors consists of long-standing members who vary in tenure. This tenure measurement refers to previous research. Director's tenure (TENURE_DIR) is measured by using the percentage of directors who have a longer tenure divided by the total board of directors in the company.

Gender
Gender differences indicate that although there is no overall difference in effectiveness between women and men, there are some gender-related differences in behavior and skills in some situations; women play an important role in improving board effectiveness and company performance [18]. Women directors can provide a unique resource as a more diverse board can influence governance outcomes for superior organizational value and performance. Women have a feeling cognitive style that empathizes with organizational values and can provide new insights and perspectives that lead to a knowledge base, creativity, and innovation. Because it covers a wide range of points of view, diversity can help improve one's problem-solving abilities. Due to the diverse membership of the board, the board will have access to a broader perspective, which allows it to have a better understanding of the complexities of the business environment and leads to an increased ability to make decisions [19].
Women bring a more collaborative approach to leadership, which helps improve communication between managers, the board, and stakeholders, as women are typically more sensitive to crises. Women also have a more positive outlook on life. Analyzing the results of a previous study by [18] on the percentage of female directors allows one to understand female directors' cosmetology better.
= ℎ ℎ Environmental Performance [1] Environmental performance refers to how well the company is doing its part to maintain or improve the quality of its surrounding environment. The PROPER program run by the Ministry of the Environment is used to calculate the degree of environmental performance that the sample companies have achieved. Within the framework of the PROPER performance appraisal system, business ratings use the following five colors: : Gold: Very, very good score : 5 Green : Very good value score : 4 Blue : Good value score : 3 Red : Bad score : 2 Black: Very poor score : 1

Dependent variable
Corporate social responsibility [1] Corporate social responsibility (CSR), which includes the disclosure of information related to the environment in the annual report, is the dependent variable. The method used to calculate CSRI is based on a dichotomous approach. According to this method, each CSR item in the research instrument is given a value of 1 if it is disclosed and 0 if it is not disclosed [27] in [28]. The next step is to generate an overall score for each organization by adding the points earned for each item. Here is the CSRI calculation formula:

= ∑
Description: CSRIj: Corporate Social Responsibility Disclosure Index j . company nj: Number of goods for company j, nj < 78 Xij : dummy variable : 1 = if item I is disclosed; 0 = if item I is not disclosed So, 0 < CSRIj < 1

RESULT AND DISCUSS
Research Results: The number of manufacturing companies expected to be listed on the Indonesia Stock Exchange in 2020 is examined in this study. According to the sampling method's criteria, we obtained 71 companies after investigating for one year.

Descriptive Analysis
Tests based on descriptive statistical analysis. Descriptive statistics is a strategy that can provide an overview of the data. The mean, also known as the mean, standard deviation, highest value, and lowest value, all contribute to the overall picture that the data might paint.

Normality test
The normality test aims to test whether, in the regression model, the dependent variable and the independent variable are normally distributed or not. To determine the normality of the data, the data is viewed in a linear regression analysis plot (normal probability plot). If the residuals spread around the diagonal line and follow the diagonal direction and follow the direction of the diagonal line, then the regression model fulfills the assumption of normality. The normality test in this study also used the nonparametric Kolmogorov-Smirnov (KS) test. The normality test was carried out by assessing the 2-sided significance through measurements at a significance level of 5%. Data is said to be normally distributed if Asymp.Sig (2-tailed) is greater than 0.05 or 5% [29]. The following are the results of the normality test obtained as follows:  Table 3.

Multicollinearity Test
Based on the output of these coefficients, it can be seen that the TOL value (tolerance) for the variables of Foreign Directors So that the regression model formed does not occur multicollinear symptoms. Table 4.

Heteroscedasticity Test
Based on the data output above, it is known that the regression model does not have heteroscedasticity symptoms. This is because of Sig. The Foreign Director variable to the absolute residual is 0.138 > 0.05, so Sig. The variable of the term of office of the Board of Directors to the absolute residual is 0.879 > 0.05, Sig. The female Director's gender variable on the residual is 0.339 > 0.05, and Sig. Environmental Performance Variable to residual is 0.986 > 0.05 Symptoms of heteroscedasticity occur when the profitability value is smaller than the alpha value (Sig. < ). So there is no symptom of heteroscedasticity. In the output of the summary model, there is a Durbin-Watson value of 1.149. Decision-making on this assumption requires two auxiliary values from the Durbin-Watson table, namely the values of dL and dU, with K (number of independent variables) = four and n (sample size) = 71 samples.
In conclusion, if we look at the Durbin-Watson table above with n = 71 samples, K = 4, then we will get the value of dL = 1.4987 and dU = 1.7358, so the value of 4 -dU is 4 -1.7358 = 2.2642 while the value of 4 -dL is 4 -1.4987 = 2.5013. Because of the Durbin-Watson value (1.149) < dL, it can be concluded that the regression equation model has a positive autocorrelation. Table 6.

Test F Test
Based on the ANOVA or F test results, it is known that the calculated F value is 69.950 with a significance of 0.000. This shows that the regression model can predict the Corporate Social Responsibility (CSR) variable because its significance value is less than 0.05. Thus it can be concluded that the variables of Foreign Directors, Term of Office of Directors, Gender of Female Directors, and Environmental Performance affect Corporate Social Responsibility (CSR). Table 7.

Test T-Test
It can be concluded that the Sig Value: Foreign Director 0.442 > 0.050 then X1 has no effect on Y  Table 8.
From the coefficient of determination, the adjusted R square value is 0.798, which means 7.9% of the dependent variable, namely CSR, can be explained by the independent variable of foreign directors, term of office of directors, gender of female directors, environmental performance. In contrast, the remaining 92.1% can be explained by other variables outside this regression equation or other variables that are not tested.

DISCUSSION First Hypothesis Testing Results
The T-test results show that the Foreign Director variable has a regression coefficient value of 0.023, and the direction is positive, with a significance value of 0.442 > 0.05. This shows that the relationship between the two variables is significant. This indicates that non-American directors do not substantially impact corporate commitment to social responsibility. Diversity at the national level has a beneficial impact on CSR disclosure. The findings of this study are in line with the findings of research conducted by [30] and [31], who found the need for social disclosure is the result of high profits but low levels of business. Profitability will try to disclose their social activity. The findings of this study are in line with the findings of research conducted by [30] and [31]. CSR) is an activity that, on the one hand, can reduce the company's income but, on the other hand, can increase the image of a profitable company. This study's findings support [32].

Second Hypothesis Testing Results
The regression coefficient value for the variable representing the term of office of the Board of Directors was found to be -0.016, and the significance level for the negative direction was found to be 0.666, which is more than 0.05, according to the test results. This shows that the length of the term of office of the board of directors has no significant effect on the company's commitment to social responsibility. Based on the experimental findings, namely the length of service as the President Director, there is evidence that the tenure variable does not show a significant effect. There is a discrepancy between this study's findings and those of research conducted by [33]. According to the findings of Thomas and Simerly, the president director with a long tenure in the company affects the performance of corporate social responsibility (CSR). In addition, a president director with a long tenure understands stakeholders' wishes and can determine the best strategy to meet stakeholder needs. The findings of this study, however, contradict Thomas

and Simer Third Hypothesis Testing Results
Based on the test results, the female Directors' Gender variable has a regression coefficient value of -0.005, and the negative direction has a significance value of 0.946, which is greater than 0.05. This indicates that the direction is significant. This shows that the gender ratio of male and female directors has no significant effect on the level of corporate social responsibility. Disclosure of corporate social responsibility is hampered when there is gender diversity. The findings of this study are in line with the findings of [34], who found that a lack of gender diversity had a negative impact on voluntary disclosure, and , who found the same thing [14]. The findings of this study lead the researcher to conclude that gender does not play a role in the level of voluntary disclosure.

Fourth Hypothesis Testing Results
The test results show a correlation between the positive direction with a significance value of 0.00 0.05. The regression coefficient for the Environmental Performance variable was found to be 0.169. This shows that Environmental Performance has a significant effect on Corporate Social Responsibility. [Case example:] [Case example:] The regression findings show that environmental performance is related to the level of environmental disclosure provided by the mining businesses sampled for this study. This finding is corroborated by [2], who found that environmental performance has a positive and substantial effect on the disclosure of social and environmental obligations. The findings of this study are consistent with findings [2]. This finding indicates that companies do not pay attention to environmental performance when disclosing their social responsibilities, which means that companies that do not have environmental certification disclose their social responsibilities. In line with these findings, research [24] also states that environmental performance does not affect the company's CSR wider scope disclosures. This is because there is no standard regulatory framework that regulates the issue of ISSN: 2808-103X

CONCLUSIONS AND RECOMMENDATIONS
Researchers can conclude that foreign directors, tenure, and gender of female directors do not affect the company's corporate social responsibility (CSR) level. Meanwhile, Environmental Performance has a major influence on Corporate Social Responsibility. Researchers can provide suggestions for further research based on the conclusions obtained and the limitations that have been discussed in the previous section. The suggestion includes the addition of other variables that can affect Corporate Social Responsibility, such as Institutional Ownership, Managerial Ownership, and various other variables.