Corporate sustainability performance and board attributes: cross-country analysis on infrastructure and real estate companies from ASEAN countries

. Businesses have encompassed their stakeholders’ interests into a set of reporting which reflects all of their ESG related activities. Sustainability reporting is considered to bring value to firms not only concerning profitability but also the long-term sustainability. Settled amid country-level development, we purposely consider the impact of real estate and infrastructure industries and select ASEAN countries to investigate the relationship between firms’ sustainability performance and board independence, board diversity, number of meetings, and the total compensation paid. This paper strives to investigate how these board characteristics play a role in decision making to contribute to the quality of sustainability performance reflected in the reporting. We find how our dependent variable acts differently from each explanatory. First, we find that board independence dictates the quality of sustainability performance which is emphasized by how they bring key issues related to stakeholders. Second, women’s composition on the board structure does not evidently reflect the caliber of sustainability performance. Third, we find that the frequency of board meetings may include useful discussion regarding ESG matters as it positively aligns with sustainability performance. Furthermore, the compensation may not be the vital driver of directors’ ESG-related goals since the compensation may include miscellaneous objectives.


Introduction
During the last decade, the concern of sustainability in the scope of business has greatly demanded which is observed through the corporate ESG-related activity seamlessly reflected in sustainability reporting [1].In addition, the recent pandemic has greatly impacted the market and weakened the economy which triggers stakeholders, specifically investors, to demand more transparency and non-financial disclosures as a trusted parameter of corporate value.[2] Furthermore, the presence of stakeholders who feasibly gives pressure on businesses and firms as an organization in matters of the environmental and social areas in which firms are inevitably required to fulfill or satisfy their interests.[3] Engaging with the key stakeholders may help firms to get benefits and create future value creation namely reputation, public image, and market competitiveness.[4] Consequently, firms might transform their approach to no longer focus on the economic aspect only but they are also required to consider the stakeholders' existence by giving value and building relationships through corporate social responsibility [5].
Companies with distinct industries might differ in providing ESG disclosures [6].Given that fact, complex industry specifically infrastructure is one of the crucial and influential industries at the country level which has a great contribution to national development especially in economic growth and infrastructure facilities [7].Having the same nature to occupy land or public places, real estate also possesses the same attributes embedded in construction activities, therefore, a similar exposure to environmental and social interest might be reflected by these industries [8].For the reporting matter, Global Reporting Initiative (GRI) has provided for both industries, namely infrastructure and real estate, guidance for reporting disclosure which the background is to explain the concern of sustainability lies in these two industries [9].Arguably, some important features may not be mandatory or suggested by GRI to be disclosed in reporting in these industries [10].
In our research case, ASEAN countries, effectively a group of developing countries, is very crucial to boost the development of infrastructure project because it will mainly help the country's economic growth, enables supply-chain and international trade, and achieves an adequate level of infrastructure itself [11].The main driver of infrastructure development and further pushing the real estate growth, specifically in ASEAN, is the population surge and the urbanization which later on must be supported by the advancement of transportation.In addition, the trade volume, technology, communication, and primary concern from the sustainability infrastructure demand become the supporting reason for the current and possible future outlook of ASEAN development drivers in infrastructure [12].
This study, which focuses on the factors that influence sustainability performance in the infrastructure and real estate sectors, adds to the body of knowledge in a number of ways.First, the infrastructure and real estate sectors have not yet been the subject of an empirical cross-country study in an ASEAN nation while having vital environmental and socioeconomic implications for the nation.As far as the authors' knowledge goes, this study provides the first initial study for this particular sector.Second, the link among sustainability performance, board independence, board diversity, board activity, and board compensation has been investigated in the past under other domains; [13][14][15][16].
Nevertheless, inconsistent and conflicting results were found, which prompted more studies.Lastly, our study fills a gap in understanding by focusing on a particular area within the infrastructure and real estate sectors, which significantly impact the country's economy and social landscape.The scale of impacts that companies in these sectors have will be one of the main considerations on how the top management of the firms conducting the firms' operational model.
Based on the explained circumstances, we generate several research questions to align the direction of this research into more comprehensible examination.1.What is the relationship between the number of independent board member and the quality of sustainability performance on infrastructure and real estate companies in Southeast Asia? 2. What is the relationship between the degree of board diversity and the quality of sustainability performance on infrastructure and real estate companies in Southeast Asia? 3. What is the relationship between board activity and the quality of sustainability performance on infrastructure and real estate companies in Southeast Asia? 4. What is the relationship between board compensation and the quality of sustainability performance on infrastructure and real estate companies in Southeast Asia?
This study is structured as follows.An abridgment of the research's theoretical foundation and hypothesis development are presented in Section 2. Section 3 discusses the data and techniques used in the study.Section 4 consists of the findings and observations.The conclusion is presented in section 5.

Literature review and hypothesis development 2.1 Corporate sustainability performance and voluntary reporting
Firms have been regarded not only to focus on the economic aspect but also the existence of stakeholders especially when they are always in the core position for businesses' viability.Since stakeholders provide the capital and at the same function, they are sensitive to any issues that escalate from companies' activity [17], not to mention the government, activists, media, and even employees.These parties do submit an actual direct impact to a corporation as they participate in the component of the decision-making process further to increase trust and relationship between the corporation and stakeholder group [18].The term sustainable development can be applied to corporate responsibility which includes environmental, social, and financial responsibility [19].Social responsibility may include or side-by-side address the environmental disclosure in the annual reporting that is used to manage firm image with the attribute combination of management consensus and resistance to a specific public concern to the firms' activities [20].On top of that, the environmental and social disclosure that convey sustainability performance simultaneously is part of the response to stakeholders and must be in solid integration that further helps to achieve the organization's primary economic objective [21].The statement agrees with the model of the social responsibility pyramid which accounts for all the duties that a firm has to fulfil and satisfy society which further developed into social responsiveness starting from the philanthropy, ethic, legal, and the primary platform, economic aspect [22].In a theoretical concept, stakeholder theory may well fit all approaches concerning stakeholders and corporatelevel response which ethics and value creation are the main rotors to deploy strategic management to set out plans and strategy managing the stakeholders' existence [23].Stakeholder theory explains how corporate responsibility for sustainability is affected by the influence and power of external stakeholders which also emphasizes that corporate actions in response to stakeholders' affairs are explicitly a strategic action [24].Firms have different and situational motives to carry out their sustainability performance either to satisfy every related stakeholder regardless of the firm objectives, i.e., focusing on several key stakeholders to gain advantage or directly involved with the superior stakeholders by taking the mutual precedence [25].This statement, on the other hand, is in line with legitimacy theory which managers or firms may have the vision to consider society as the important party who correspondingly has a social relationship that contains unspoken or even written covenant which must be satisfied by each side to ensure the "legitimacy".Therefore, management will try their best to try to control all matters whenever there is a vital impact on the firms' sustainability [26].In addition, the legitimacy theory turns out to be strategic initiation from management especially in altering social perception when there is a presence of risk concern and at the same situation.Voluntary reporting in the area of legitimacy is a tool used by management to stress the positive picture of both environmental and social performance in sustainability reporting [27].
On the other hand, the public has always been pursuing the firms' sustainability information for all related activities such as investing, decision-making, analyzing risk, and even research.Through voluntary made reporting, firms are able to sound to all the stakeholders about the firms' information even though this information may not reflect the actual situation and smeared with doubt [28].The global standard, Global Reporting Initiative (GRI) for example, has shortcomings in terms of standard as it has the uneven scale to conduct a set of reporting lies between environmental, social, and economic aspects, and as a result, the report may not reflect the actual practice and condition of the issuing firm [29] yet the other finding shows that GRI standards are capable to increase organizations' quality of sustainability reporting since there are more reporting instruments or attributes which need to be disclosed to communicate the ESG-related activities to stakeholder [30].
Adams & McNicholas, [31] in their study, conclude several concerns in the process of sustainability reporting might have been omitted including the main essence of sustainability best practice, integration of sustainability goals, and organization strategy, unfit standard, or simply lack of experience and knowledge which all these concerns might lead to poor reporting and not reach the expected accountability level.Other researchers also argue that completeness of reporting is one of the serious concerns and unless firms point out and consult their stakeholder groups, it is punishing to determine the way to satisfy each stakeholder [32].Zamil et al. [33] also stated that firms may achieve competitive advantage through a managed monitoring system which there should be a platform and mechanism that enables efficient and effective sustainability reporting.Additionally, the ethical aspect is a vital concern that needs to be fulfilled by organizations to adhere the transparency and promote accountability through proper reporting portraying both poor or favorable situations that firms currently facing [32].In conclusion, management at the top level must have clear control and goal to enable the bottom-up function of the actual engagement between stakeholders and firms.This can be achieved through inserting a transparency information disclosure to reporting standards regardless of the standard maturity since voluntary reporting is a dynamic affair that helps institutions to reduce the cost of stakeholders' engagement [34].

Board independence -hypothesis development
The percentage of independent directors as part of the board is measured in this research.An Independent board is seen as a vital part of decision-making due to its expertise and knowledge outside the related business.Thus, a company may utilize the capability of an independent or outside board to be important support of the decision-making process [35].
Prior research shows a positive effect on the number of independent directors which reflects a higher quality of its voluntary reporting.A company with more executive directors may produce an inferior level of voluntary disclosure [36].The other research on the effect of independent board members indicates that the higher the number of independent directors on the corporate board will more likely to produce higher quality ESG reporting.The parameter of the measurement is the scale of GRI reporting attributes coverage in terms of items disclosed in the reporting [37].In a separate test, Mititean [38] explains that the independent board has an unclear effect on the environment while the independent board shows more concern for social matters.To address the social implication, another research, Adapting the stakeholder theory, another research explains how independent directors make an important role in bringing the important issues related to stakeholder in the company's decisionmaking process and conclude that higher board independence number does affect the degree of corporate social responsibility [39].These literatures mainly apply the stakeholder theory which also becomes our main concept theory in explaining voluntary reporting and sustainability performance.Thus, we develop the following hypothesis: : Board Independence is positively associated with Sustainability Performance.

Board diversity -hypothesis development
We also examine the variable of Board Diversity which explains the number of women in the board of directors.
Prior study shows no effect between the presence of women on board with the ESG disclosure.The research implies that women have insignificant effects in improving ESG disclosures [40].Other researchers also agree that female directors had neither a positive nor negative impact on voluntary reporting but it is justified that the low gender composition gap may be the reason which implies the number of women need to reach a certain level to have a significant impact [41][42].
Applying the gender socialization theory, Khatri [43] explains a positive relationship between gender diversity and sustainability performance.Other research also explains that due to the nature of women, they put more attention to stakeholders' concerns and engagement and thus provide a better sustainability reporting quality [44].The mixed findings of the effect of the presence of women directors drive us to test the following hypothesis: : Board Diversity is positively associated with Sustainability Performance.

Board activity -hypothesis development
Ju Ahmad et al. [13] defines a board meeting as a governance tool to engage all key players in a firm to plan corporate goals, manage problem and risk, and develop a strategic plan including the resolution and composition of ESG performance.Unexpectedly, their research argued the failure of directors to provide more action into ESGrelated concerns since they found no significant impact between the number of meetings and the quality of CSR disclosure.Other research also shows an insignificant correlation between the number of meetings to the performance of sustainability-related activities [16].
Laksmana [45] also argues that the matter discussed in directors' meetings may not always be about the ESG but primarily focuses on the financial aspect of the firm.It justifies the frequent number of meetings does not always lead to an increase in CSR reporting quality.
In contrast, the number of board meetings and audit committees tends to provide a better impact on corporate reporting because the number of information disclosed increases [46].Other finding shows the number of meetings along with independence, and diversity may improve the reinforcement of environmental constituent [15].Based on the literature, we argue that the effect of board meetings depends on the concern and items discussed in the meeting.Thus, to find out, we augment the total number of board meetings to be tested with sustainability performance described with the following hypothesis: : The Number of Board Meetings is positively associated with Sustainability Performance.

Board compensation -hypothesis development
Compensation is intended to be on the right angle with the company's goals.Therefore, considering social and environmental issues to be vital at the organizational level, it becomes the directors' responsibility and somehow the compensation or incentives should be prioritized by the top management performance to be included in their duty, including ESG [47].The previous literature shows a relation between compensation and ESG performance as it coherently turns the executive to keep fulfilling their responsibility, especially on ESG matters [48].
Prior research also implies that a company with compensation embedded with CSR goals oriented within will generate better social performance [49].Chouaibi et al. [50] state that bigger firms tend to insert ESG-related goals into the compensation of their executive since sustainability performance becom0065s to be more important in the presence of stakeholders.As a conclusion, we try to adapt the prior finding in our hypothesis to test whether compensation does actually determine the sustainability output quality be added as a value to the subjected firm.
: Board Compensation is positively associated with Sustainability Performance.
3 Research design and data

Data sample and selection
This study analyzes infrastructure and real estate listed companies on the Indonesia Stock Exchange (IDX), Bursa Malaysia, Singapore Stock Exchange (SGX), and Stock Exchange of Thailand (SET).Secondary data from the Bloomberg database and stock exchanges' websites is used in this research.Purposive sampling is used to filter the companies that can be used as the sample for testing the data.The choice of using purposive sampling in this study is based on the needs to analyze specific sectors of companies in Southeast Asia countries which will not be feasible for the sample to be selected under random sampling technique.Furthermore, purposive sampling is solely used as the basis to apply a set of clear criteria to the available data.The criteria of the purposive sampling used in this study are as follows: 1.The companies that publish the sustainability report from 2017 to 2021.The strongly balanced samples consist of 80 companies and 400 firm-year observations fulfill the sampling criteria.The basis for the infrastructure firm subsector is the sub-sectors under the infrastructure sector in IDX, i.e., construction, telecommunication, and utilities.Table 1 shows the number of companies from each country and sector used in this study.

Independent, dependent, and control variables
The hypotheses regarding the relationship between sustainability performance and board independence, board diversity, board activity, and board compensation in this study are tested using pooled OLS regression.The equation for the regression is as follows:

SP = + INDP + DIV + ACT + COMP + DER + (I)
As is shown in the model, the dependent variable in this study is the sustainability performance of firms which is represented by the firms' Bloomberg ESG score with a scale from 0 to 100.Bloomberg ESG score is used by taking into account the former studies that utilized the Bloomberg ESG score as the proxy for firms' sustainability performance [51].There are four independent variables used in this study that are taken from the Bloomberg database and stock exchanges' website.First, board independence is measured by the firms' percentage of independent directors.Second, the board diversity of firms is represented by the percentage of women on board within the firms.Furthermore, the number of board meetings per financial year is used as the proxy for board activity.The last independent variable is board compensation which is measured by the total boards' compensations of the firms.The regression model above is controlled by firms' leverage using the debt-toequity ratio as the proxy for the calculation.Leverage is used to control the regression as debt influences the capital structure of the firms [52] and also influences the boards due to greater financial strains [53].The summary of the explained variables is disclosed in Table 2.According to the correlation matrix for variables which is shown in the Table 4, board independence, board diversity, board activities, board compensation, and debtto-equity ratio are positively correlated to the sustainability performance measured by ESG score.Moreover, the table also shows that there are minimal correlations between the several independent variables, with meeting numbers and sustainability performance having the highest correlation at 0.4059.This guarantees that our regression analysis does not contain any multicollinearity as the correlation matrix utilizes multiple regression to statistically calibrate the correlations among the variables with a result that is not close to ±1 implying a feeble relationship [54], [55].Table 5 shows the result of the regression to test all of our hypotheses using robust standard error to ensure the absence of heteroscedasticity in the data [56].The test indicates a strongly positive impact between the percentage of independent directors on the board and the sustainability performance of observed firms.The result supports the H1 which states the firms' sustainability performance are positively corresponding with the higher proportion of independent board members as previous research also argues that more independent directors may present more ESG-related matters to the Board of Directors as the principal [57].whilst other researchers argue that independent board members affect the governance rating in a positive manner [58] which is important and matters in our research since the governance score is one of the reckoned elements in our final proxy model of the dependent variable (ESG Score) collected from Bloomberg terminal.Our finding concludes the agreement explained by the concept of stakeholder theory which addresses the presence of independent directors indicating a more thorough stakeholders' sensitive issues reflected by the reporting since outside directors have the tendency to propose more external issues regarding sustainability including environmental issues and social interest.[39], [59].This generates better planning and execution of a broad level of firms' strategy addressing ESG actions and may result in a better quality of ESG disclosure.The finding is clearly explained by prior research on how to define the relationship between the board independence and how it affects the quality of sustainable performance in a company.

Results and discussion
The test indicates no relationship between the number of women directors and sustainability performance.In this case, the result contradicts our hypothesis that a board structure with higher women representatives will result in better sustainability performance.Although it contradicts our hypothesis, it is feasible to explain how the board member diversity as the selected proxy does not dictates the quality of sustainability performance.Women directors as discussed by Torchia et al. [60], have a crucial role in intervening in board strategic duties including ESG matters.Women's presence as the minority framed in the concept of critical mass may trigger novel ideas and different perspectives as alternatives to contradict or even enhance others than the rest of the board.For this reason, the result of board strategic planning will become clearer and fix vagueness because of the various ideas available [61].Adapted to our research, we argue that a higher proportion of women directors on board will present better ESG-related activities and produce a superior report to reflect sustainability performance.Inversely, the prior finding finds a faint and negative relationship between board diversity and corporate sustainability performance which challenges our finding [40,56].On the other hand, our result confirms Ismail et al. [41] assertion that the presence of women directors on the board has unclear effects, thus, it may not define the quality of sustainability performance.Torchia et al. [60] argue using the concept of critical mass, more frequent women participation especially on the board of directors will make a difference in the decision-making process.In conclusion, these researchers argue that the number of women directors needs to reach a certain participation number to create influence in the decision-making process specifically in ESG matters.Based on this finding, we argue women directors specifically in our selected industries and countries may not achieve a certain number in terms of participation, accordingly, decision-making, ideas, and unique thoughts by women might not be sounded well on the Board.Hence the quality of sustainability reporting may not differ from the majority of male directors.
The board activities represented by the number of board meetings show a significant relationship with companies' sustainability performance.This result supports H3 which states the number of board meetings influences the sustainability performance of companies.This finding also answers the research question in regards to board activity and firms' sustainability performance.To explain the practicable relationship between these variables, we further calibrate the finding using previous literatures.Our finding aligns with the former research [62] that states the number of board meetings is significant to companies' sustainability report quality.This shows that the higher frequency of the board meeting translates to the higher sustainability performance of the company because board meetings consist of strategic level agenda including, but not limited to the sustainability policy, sustainability issue, and sustainability program within the company.A more frequent board discussion increases the firm understanding of its sustainability implementation and sustainability issue management [63].Hence, a number of board meetings have a positive relationship with companies' sustainability performance.
The board compensation variable relationship with sustainability performance is insignificant.Thus, H4 in this study is not supported.Agreeing with the previous study in regards to the relationship between boards' compensation and sustainability performance [64], the negative relationship is due to the fact that board total compensation which consists of many components, such as severance or welcome payments, share-based remuneration, retirement savings, and variable monetary rewards [65] is not solely based on the sustainability performance of the company but more on the other company's performance indicator.this test result presumably implies that board compensation in Indonesia, Malaysia, Singapore, and Thailand is not closely tied to the company's sustainability performance, and boards are rewarded for enhancing the company's performance in a non-ESG related section as the shareholders' interest is not heavily focused on the sustainability sector of the company as per now [66].Based on the explanation, we interpret the compensation paid to board and how it does not convincingly motivate the ESG-related activities to be carried out in the company.
The control variable tested in this study is the debt-toequity ratio.The result shows a positive association between debt and companies' sustainability performance which contradicts the prior research that argues that company that possesses high debt tend to render an inferior sustainability performance [67].Other finding shows no relationship at all between the companies' leverage to their sustainability performance presented in three different aspects which are social, environmental, and governance [58].A similar result was submitted by Modugu [68] in evidence from UAE.He argues that there is no significant relationship between the leverage degree to sustainability disclosure as companies with high debt may not fully report their sustainability matters or they have different ways to communicate to creditors.We argue that it is understandable that companies in ASEAN countries may utilize the resource obtained from financing activities primarily debt to invest in ESG-related actions and duties.This is also sensible and supported by the view of the market capitalization of selected companies that might not be sufficient to get funding through equity but debt [69].In addition, Magnanelli et al. [70] argue that companies' decision-makers might excessively invest in CSR performance using leverage because the cost is carried by shareholders.Ariyani et al. [71] argue that SR reporting can be utilized to gain more financing and reduce the investors' concern about the firm potential credit risk.The outline of the testings conducted in this study is shown in table 6.

Conclusion
As research on developing countries is growing in the status quo, non-financial industry-specific sectors in Southeast Asia countries are still an underdeveloped research area.This study represents the initial empirical study on the relationship among firms' sustainability performance, firms' board independence, firms' board diversity, firms' activities, and firms' board compensation in the case of a combination of specific sectors, i.e., infrastructure and real estate, in Southeast Asian countries.Our research which consists of 400 firm-year observations from the business year 2017 to 2021 shows how board independence and board activities have significant relationship with the sustainability performance of businesses in ASEAN nations, particularly in Indonesia, Malaysia, Singapore, and Thailand.This aligns with prior studies because board independence and board activity have a tight relationship with the level of ESG disclosure and ESG matters existence on board level discussion.In contrast, board diversity and board compensation do not affect the sustainability performance of firms in Southeast Asia countries.This finding is useful to businesses, shareholders, and the government to be a basis for understanding how the top management of firms plays a significant role in regard to firms' sustainability performance in developing countries' specific sectors.
As our independent variables are not narrowed to a specific aspect of the board, this study minimizes the possibility of an aspect to be overlooked.Further study may employ a more specific compensation variable, such as fixed and variable board compensation and also short and long-term board compensation to get a better understanding of how the board compensation impacted the firms' sustainability performance.Additional research using different databases and different ESG score assessors may enrich this area of research.Further study on different non-financial sectors firms may be employed to yield a more holistic understanding of how each sector differs or coincide with each other in terms of the relationship between firms' board and firms' sustainability performance.
Several restrictions apply to this study.As the findings in this study rely on the firms' data only from 2017 to 2021 and the availability of ESG data on the Bloomberg database, there is only a limited number of companies that can be employed in this study resulting in limited understanding.Moreover, the information regarding board independence, board diversity, board activities, and board compensation in this study is highly based on the firms' level of disclosure.Lastly, it is worth noting that the Bloomberg ESG score is not free from subjectivity which may affect the result of the study.

Table 1 .
Companies sample based on country and sector.

Table 3 .
Descriptive statistics for independent, dependent variables, & the control variable.Referring to Table3, it describes the comprehensive descriptive analysis of the variables used in the research.The average sustainability performance shown in the table shows that the infrastructure and real estate companies in Indonesia, Malaysia, Singapore, and Thailand is 47.26 with a maximum score of 80.95 and a minimum score of 16.77 according to the Bloomberg ESG score.The mean percentage of independent directors is 51.50% which shows that half of the companies' directors in the four countries are independent on average.The average percentage of women on board is 16.76%.The low percentage of women on board is due to the fact that some companies do not have women sitting on the board of directors as shown by the minimum value on the diversity variables.From the data during 2017-2021, nine board meetings are conducted on average with a minimum of two board meetings in a year and 28 board meetings in a year.The mean of board compensation is 855.04 in thousands of dollars and the debt-to-equity ratio is 99.34.The mean of DER shows that the sample companies have $99.34 of debt for $1 equity that the companies have.

Table 4 .
Correlation matrix for variables.

Table 6 .
Outline of test results.