Dividend Policy in ESG Firms: Corporate Governance Perspective
DOI:
https://doi.org/10.60090/kar.v7i1.1477.42-54Keywords:
dividend policy, environmental accounting, earnings quality, corporate governance, ESG firmsAbstract
Dividend policy is important for ESG companies because it clarifies how commitments to environmental, social, and governance practices influence profit distribution to shareholders and the sustainability of firm value. This study analyzes the effects of environmental accounting and earnings quality on dividend policy, with good corporate governance (board independence) as a moderating variable, using 100 observations from IDX ESG Leaders firms during 2020–2024. A quantitative panel data approach with moderated regression analysis is applied, and the analysis is conducted in EViews using a fixed-effects panel regression model. The results indicate that environmental accounting positively influences dividend policy, as firms that disclose environmental costs gain greater legitimacy and more stable cash flows. Earnings quality also has a positive effect because earnings supported by cash flows increase credibility and reduce uncertainty in dividend decisions. Board independence strengthens these relationships by enhancing oversight and constraining managerial opportunism. From a policy perspective, the findings support strengthening board independence and integrating ESG considerations into dividend and governance regulations. This study is novel in jointly examining environmental accounting, earnings quality, and board independence within an ESG focused panel, providing new evidence on how governance mechanisms link sustainability and reporting quality to dividend decisions.
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Copyright (c) 2026 Yenny Wati, Yusrizal Yusrizal, Suhardjo Suhardjo, Suyono Suyono, Nicholas Renaldo
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