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1 If the value Significance error rate α=0.05, then Ho is rejected.
2 If the value Significance error rate α = 0.05, then Ho is
accepted.
E. Operationalization Variable
Referring to the research hypothesis, there are five variables under study, i.e. board size, company size, profitability, leverage and CSR reporting.
According to Sekaran 2003 cited in Amin 2011:514, the four variables are measured by formulating operational definition. Defining
variable operationally involves the following steps: determine the variables, define the dimension sub-variable, and define elements indicators, and
determine the relevant measurement scale see Table 3.3.
1. Board Size
Within research of Bacthiar and Siregar 2010:244, Indonesia Country adopts a two-tier board system, board size relates to total of board
of commissioners’ and board of directors’ size. Collier and Gregory 1999 cited in Bactiar and Siregar 2010 and
Siregar and Sitepu 2009:4 argued that larger board of commisioners’ size and directors’ size will make it easier to control the CEO and the
monitoring process will be more effective. But, a very large board could limit the communication and coordination among board members and
consequently will hamper monitoring process. So, larger board size will have positive influence on CSR, but a very large board size will have
negative effect on it.
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Result of research conducted by Bachtiar and Siregar 2010, Sembiring 2005, Siregar and Sitepu 2009 indicated that board size
positively affects corporate social responsibility reporting. In this study, researcher only using board of commissioner as one
of factors related to CSR reporting in the companies’ annual reports.
2. Company Size
Company size is the independent variable which is usually used to explain disclosure variation in the company financial report. According to
Gao and Joshi 2009:39 noted that to measure the company size can be measured in a number of ways, such as total asset, capital employed,
turnover, number employees, company’s market value and equity.
The result of study of Al-Haj et al. 2011:194 that one of benchmarks to indicate whether company is big or small with see its total
asset. Result of many studies noted that company size has a positive effect on CSR reporting. This indicates that, the bigger, in terms of size a
company is, the more the company discloses its social and environmental information.
In this study, company size is measured by ratio scale and researcher use total assets as company size. The company size variable is
Size= Board Size Size= Total Board of Commissioner
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presented in the form of logarithms, because the value and its spread is large compared to other variables.
The measurement with using the formula:
3. Profitability
