Globalization and Governance: Firm-Level Drivers of Sustainability Reporting Standards

Abstract

Globalization has transformed corporate dynamics by expanding competition and accountability across nations. The integration of global capital markets has intensified cross-border investments, demanding greater transparency and harmonized sustainability disclosures. This study aims to analyze the effects of foreign ownership, foreign board representation, and dual listing on the adoption of sustainability reporting standards, as well as to examine the moderating role of the audit committee. A quantitative causal–explanatory approach was applied using panel data from 186 firm-year observations of companies listed on the Indonesia Stock Exchange (2022–2024) that adopted the GRI Standards 2021 framework. The results show that dual listing significantly improves sustainability reporting quality, while foreign ownership and foreign board become significant only after considering the moderating effect of the audit committee. The findings indicate that audit committee activity strengthens monitoring effectiveness and aligns disclosure practices with international expectations. This study concludes that sustainability reporting quality is shaped by the interaction between external globalization factors and strong internal governance, offering practical implications for regulators and firms to enhance governance transparency and accountability