CEO Characteristics, Institutional Ownership, and Unmanaged ESG Risk in IDX30 Companies

Fauzana (Department of Accounting, Faculty of Economics and Business, Universitas Dharma Andalas, Padang, Indonesia)
Murniati (Department of Accounting, Faculty of Economics and Business, Universitas Dharma Andalas, Padang, Indonesia)
Rimi Gusliana Mais (3Department of Accounting, Sekolah Tinggi Ilmu Ekonomi Indonesia, Jakarta, Indonesia)

Economics and Business Journal
Vol. 4 No. 6 (2026)

Environmental, Social, and Governance (ESG) risk ratings increasingly complement corporate sustainability disclosure by assessing material risks that remain unmanaged. This study examined whether institutional ownership, CEO tenure, and CEO educational background were associated with ESG Risk Score among IDX30 companies. Using a quantitative cross-sectional design, 28 companies in 2024 were analyzed with Ordinary Least Squares regression, controlling for firm size and Market-to-Book Value. Institutional ownership was not significantly associated with the score. CEO tenure and business-related CEO education were positively and significantly associated with ESG Risk Score, indicating higher unmanaged material ESG risk because lower scores represent better risk-management outcomes. Firm size was negatively significant, whereas Market-to-Book Value was insignificant. A sensitivity analysis using the original 29-company sample produced unchanged decisions for the three main hypotheses. The findings indicated that CEO characteristics were statistically associated with unmanaged ESG risk, while ownership concentration was not. The study underscores the importance of distinguishing externally assessed ESG risk from disclosure-based ESG measures.