Institutional Theory Perspective in Disclosing Occupational Safety Risks in Indonesia

Abstract

Objective – This study aims to compile a weighting index for Occupational Safety Risk Disclosure in Indonesia. Design/methodology/approach – Primary data was collected through questionnaires, focus group discussions (FGDs), and interviews with practitioners, academics, and regulators regarding occupational safety risks in Indonesia. Secondary data in the form of sustainability reports from manufacturing and construction companies listed on the Indonesia Stock Exchange in 2019 and 2020 was also used. The Occupational Safety Risk Disclosure weighting index was developed based on a literature review of previous research, guidelines, and regulations related to occupational safety risks. The weighted and unweighted indexes were tested using the paired sample t-test. Results – The research resulted in a weighted index for occupational safety risk disclosure consisting of 37 items, including project risks, social risks, safety risks, and accident risks. There was a significant difference between occupational safety risk disclosure on the weighted and unweighted indices. Research limitations/implications –The researchers acknowledge the challenge of author subjectivity in measuring occupational safety risk disclosure. This sample of this study included manufacturing and construction companies registered in Indonesia, so the results cannot be generalized to unregistered companies in Indonesia or to companies in other countries or regions. Practical implications – This study suggests company managers to pay more attention to Occupational Safety Risk Disclosure. This study also suggests company managers use the weighted Occupational Safety Risk Disclosure index as a reference and standard in reporting occupational safety risks. Social implications – Considering the positive impact of Disclosure of Occupational Safety Risks, the policies of company managers and the government have a strong influence in encouraging better welfare of the workforce and society. Originality/value – This study offers an in-depth understanding of the preparation of the Work Safety Risk Disclosure weighting index in Indonesia.