51
D. Hypothesis
From the explanation concern with this research, hypothesis that can be formulated as follows:
1. Board Size and CSR Reporting
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. So, larger board size will have positive influence on CSR.
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. Ha1: Board size significantly affects CSR reporting.
2. Company Size and CSR Reporting
Company size can be measured with using total revenue, total units sold volume, total assets, sales, capital from company, capital
employed, turnover, number employees, company’s market value and
equity. Theoretically, larger companies tend to receive more attention from the public and are under greater public pressure to exhibit social
responsibility Cowen et al. 1987 cited in Gao and Joshi 2009:33. Larger companies can be expected to disclose more social and
environmental information to prove their corporate citizenship, thereby
52
legitimizing their existence. That is because additional disclosure may influence society’s perception about the company Neu et al. 1998 cited
in Gao and Joshi 2009:33. The study is done by Al-Haj et al. 2011, Darwis 2009, Gao and
Joshi 2009, Bachtiar and Siregar 2010, Janggu et al. 2007 and Reverte 2009 indicated that company size positively affects CSR
reporting. Ha2: Company size significantly affects CSR reporting.
3. Profitability and CSR Reporting
Profitability is intended to measure how efficiently a firm uses its assets and manages its operation. The focus in this group is on the bottom
line, net income. Profitability is a factor that makes the management free and flexible to disclose social responsibility to stakeholder. The higher
company profitability rating so the bigger the social information disclosure. In addition, according to Belkaoi and Karpik 1989 cited in
Rahman 2008:29, social care wants the company management to make the company profitable. Therefore, we may assume that the profitability
has a positive relation with company social responsibility. The result of studies of Gao and Joshi 2009, Janggu et al. 2007,
Zain Janggu 2006 cited in Al-Haj et al. 2011 and Siregar and Sitepu 2009 indicated that CSR reporting is positively related to profitability.
Ha3: Profitability significantly affects CSR reporting.
53
4. Leverage and CSR Reporting
Kategori