Sari Atmini

The emergence of sustainable business practices has garnered interest among stakeholders. However, the question of whether sustainability performance provides companies with a competitive advantage is still being debated in the literature. This paper aims to examine the influence of sustainability performance – namely economic sustainability performance and environmental, social, governance (ESG) – on competitive advantage, with the effectiveness of enterprise risk management (ERM) as the moderating variable. This paper used 202 firm-year observations during 2015–2022 from non-financial sector companies listed on the Indonesia Stock Exchange. To test the hypotheses, panel data regression with a one-year time-lag analysis is conducted. The findings show that economic sustainability performance has no relationship with competitive advantage, while ESG has a positive effect. Furthermore, ERM effectiveness strengthens the effect of economic sustainability and ESG on competitive advantage. Further investigation used a two-year time-lag analysis for a long-term perspective. The analysis shows that economic sustainability performance and ESG have a positive impact on competitive advantage. In contrast, ERM effectiveness has no effect on the relationship between economic sustainability performance and competitive advantage. Moreover, additional analysis incorporates the effect of COVID-19 into the main model and shows that the pandemic did not affect competitive advantage; this is consistent with the main results. The findings encourage companies to improve their risk management and sustainability initiatives. The government may also take it into account when developing rules that promote the implementation of sustainable development.

Acknowledgment
This research was supported by the Ministry of Education, Culture, Research, and Technology of the Republic of Indonesia through the Center for Higher Education Fund (BPPT) and Indonesia Endowment Funds for Education (LPDP) for providing the Indonesian Education Scholarship (BPI-Beasiswa Pendidikan Indonesia).

This study investigates the influence of the independent board of commissioners and audit committee on earnings management to achieve earning targets in Indonesian banking. The research sample was drawn from 33 banks listed on the Indonesia Stock Exchange from 2012 to 2022 to evaluate the time frame of the study and its relevance to current banking trends in Indonesia, as well as to examine the data sources used and their reliability. The data analysis method used in this study is a dummy variable regression model. The findings reveal significant insights into the motivations behind earnings management practices. Specifically, this study finds that managers engage in earnings management to meet profit targets, thereby signaling strong performance to stakeholders and potentially securing bonuses. Notably, the influence of corporate governance structures varies: while the independent board of commissioners demonstrates no significant effect on earnings management (p = –0.01), the audit committee plays a pivotal role, significantly influencing earnings management practices (p = –0.017). Moreover, the analysis uncovers that company size has a significant impact on earnings management (p = 0.002), while return on assets (ROA) does not. This study provides empirical evidence demonstrating the efficacy of audit committees in curbing managerial incentives for earnings management to meet targets. Furthermore, by quantifying the influence of corporate governance mechanisms and firm characteristics on earnings management, this study sheds light on key dynamics in the Indonesian banking industry.