Voluntary Disclosure and Debt Costs

Oct 13, 2025 by wbrum.org 45 views

The Influence of Good Corporate Governance and Voluntary Disclosure in Real Estate and Property Companies Listed on the Indonesia Stock Exchange in 2015-2017

Introduction

The real estate and property sectors have been a significant contributor to the Indonesian economy, with many companies listed on the Indonesia Stock Exchange (IDX). However, the sector has also been plagued by issues of corporate governance and transparency, which can have a significant impact on debt costs. This study aims to investigate the effect of Good Corporate Governance (GCG) and voluntary disclosure on debt costs in real estate and property sector companies listed on the IDX during the 2015 to 2017 period.

Background

Good Corporate Governance (GCG) is a mechanism that aims to increase transparency, accountability, and accountability in company management. In the context of debt costs, good application of GCG can reduce investment risk and increase investor and creditors' confidence. Voluntary disclosure, which refers to the disclosure of company information outside the required provisions, plays an important role in building trust between the company and investors. Disclosure of more transparent information can reduce the uncertainty experienced by creditors, so they tend to provide loans at lower costs.

Methodology

This study uses an associative approach with quantitative data obtained from financial statements and the annual report of the company that has been audited. The research population includes all companies in the real estate and property sectors listed on the IDX, which reached 46 companies. After going through a selection process based on certain criteria, as many as 19 companies were selected as research samples. The data analysis methods used include descriptive statistical analysis and panel data regression analysis.

Results

The results showed that overall, the Board of Commissioners was independent, managerial ownership, institutional ownership, and voluntary disclosure had an influence on debt costs. In more detail, the Board of Commissioners is independent, managerial ownership, and institutional ownership have a negative and insignificant effect on debt costs, while voluntary disclosure is proven to have a negative and significant influence on debt costs.

Analysis and Explanation

Good Corporate Governance (GCG) and Debt Costs

GCG is a mechanism that aims to increase transparency, accountability, and accountability in company management. In the context of debt costs, good application of GCG can reduce investment risk and increase investor and creditors' confidence. For example, the existence of a strong independent board of commissioners can provide guarantees to creditors that management decisions will be more responsible and benefit all stakeholders.

Voluntary Disclosure and Debt Costs

Voluntary disclosure, which refers to the disclosure of company information outside the required provisions, plays an important role in building trust between the company and investors. Disclosure of more transparent information can reduce the uncertainty experienced by creditors, so they tend to provide loans at lower costs. The results of this study support this, where voluntary disclosure is found to have a negative and significant influence on debt costs.

Managerial and Institutional Ownership

Managerial and institutional ownership functions as a counterweight in company decision making. However, in this study, both showed negative and insignificant effects on debt costs. This may be caused by a conflict of interest between management and shareholders, which can create higher risk perceptions in the eyes of creditors.

Conclusion

Overall, this research provides useful insights on how the practice of GCG and Voluntary Disclosure can affect debt costs in the real estate and property sectors. By improving the quality of GCG and disclosing more transparent information, the company is expected to reduce debt costs and increase competitiveness in the market. For investors and creditors, an understanding of this relationship can help in making better investment decisions.

Recommendations

The community and business people are expected to pay more attention to the importance of good company management in order to create a healthy and sustainable business environment. Companies in the real estate and property sectors should prioritize the implementation of GCG and voluntary disclosure to reduce debt costs and increase competitiveness. Investors and creditors should also be aware of the importance of GCG and voluntary disclosure in making investment decisions.

Limitations

This study has several limitations. Firstly, the study only focuses on the real estate and property sectors, which may not be representative of other sectors. Secondly, the study only uses quantitative data, which may not capture the qualitative aspects of GCG and voluntary disclosure. Finally, the study only examines the effect of GCG and voluntary disclosure on debt costs, which may not be the only factor affecting debt costs.

Future Research Directions

Future research can build on this study by examining the effect of GCG and voluntary disclosure on other aspects of company performance, such as profitability and market value. Additionally, future research can explore the role of other factors, such as corporate culture and leadership, in influencing GCG and voluntary disclosure.

Conclusion

In conclusion, this study provides useful insights on how the practice of GCG and Voluntary Disclosure can affect debt costs in the real estate and property sectors. By improving the quality of GCG and disclosing more transparent information, companies in the sector can reduce debt costs and increase competitiveness. The community and business people are expected to pay more attention to the importance of good company management in order to create a healthy and sustainable business environment.
Frequently Asked Questions (FAQs) on Good Corporate Governance and Voluntary Disclosure in Real Estate and Property Companies

Q: What is Good Corporate Governance (GCG)?

A: Good Corporate Governance (GCG) is a mechanism that aims to increase transparency, accountability, and accountability in company management. It involves the implementation of policies and procedures that ensure the company is managed in a responsible and sustainable manner.

Q: Why is GCG important in real estate and property companies?

A: GCG is important in real estate and property companies because it can reduce investment risk and increase investor and creditors' confidence. It can also help to improve the company's reputation and increase its competitiveness in the market.

Q: What is voluntary disclosure?

A: Voluntary disclosure refers to the disclosure of company information outside the required provisions. It involves the company providing additional information to stakeholders, such as investors and creditors, to increase transparency and build trust.

Q: Why is voluntary disclosure important in real estate and property companies?

A: Voluntary disclosure is important in real estate and property companies because it can reduce uncertainty and increase trust among stakeholders. It can also help to improve the company's reputation and increase its competitiveness in the market.

Q: What are the benefits of GCG and voluntary disclosure in real estate and property companies?

A: The benefits of GCG and voluntary disclosure in real estate and property companies include:

Reduced investment risk
Increased investor and creditors' confidence
Improved company reputation
Increased competitiveness in the market
Reduced debt costs

Q: How can companies implement GCG and voluntary disclosure?

A: Companies can implement GCG and voluntary disclosure by:

Establishing a strong and independent board of commissioners
Implementing policies and procedures that ensure transparency and accountability
Providing regular and timely disclosure of company information
Engaging with stakeholders to increase transparency and build trust

Q: What are the challenges of implementing GCG and voluntary disclosure?

A: The challenges of implementing GCG and voluntary disclosure include:

Resistance from management and employees
Lack of resources and expertise
Difficulty in balancing the need for transparency with the need for confidentiality
Difficulty in measuring the effectiveness of GCG and voluntary disclosure

Q: How can companies measure the effectiveness of GCG and voluntary disclosure?

A: Companies can measure the effectiveness of GCG and voluntary disclosure by:

Conducting regular audits and reviews
Engaging with stakeholders to gather feedback
Monitoring key performance indicators (KPIs) such as debt costs and investor confidence
Conducting surveys and focus groups to gather feedback from stakeholders

Q: What are the future directions for GCG and voluntary disclosure in real estate and property companies?

A: The future directions for GCG and voluntary disclosure in real estate and property companies include:

Increased focus on sustainability and environmental, social, and governance (ESG) issues
Increased use of technology to improve transparency and accountability
Increased engagement with stakeholders to gather feedback and improve GCG and voluntary disclosure
Increased focus on measuring the effectiveness of GCG and voluntary disclosure

Conclusion

In conclusion, GCG and voluntary disclosure are important mechanisms for real estate and property companies to reduce investment risk, increase investor and creditors' confidence, and improve their reputation and competitiveness in the market. By implementing GCG and voluntary disclosure, companies can improve their transparency and accountability, and increase their trust and confidence among stakeholders.