**1. Introduction**

Sustainability is an important agenda at various levels, i.e., individuals, organizations, and nations. Organizations are doing their best to advance the 17 United Nations 2030 sustainable development goals (SDGs). One of the ways implemented by organizations is by carrying out good corporate governance practices. Corporate governance practice is highly associated with SDG No. 16, i.e., peaceful, just, and inclusive societies. In order to foster peaceful, just, and inclusive societies and to ensure sustainable development, SDG 16 outlines the crucial roles that governance and the rule of law play. This paper is developed based on Conway et al. [1], which incorporates the broader perspective of corporate governance that highlights the need to be accountable to stakeholders. This is possibly done through disclosure or reporting. Corporate governance reporting has received acceptance by scholars, with a variety of clarifications of the justification of such disclosure [1]. Corporate governance disclosure refers to how transparently an organization communicates to stakeholders its governance practices and strategies [2].

Based on the OECD general guidelines on corporate governance [3,4], corporate governance information would be communicated via platforms that are equal, timely, and accessible. Improved disclosure of corporate governance information would increase the monitoring capabilities of shareholders and the board of directors. Studies relating to corporate governance and websites found that websites are useful channels for communication with stakeholders. The research also found low levels of corporate governance practices disclosed on the company website, which might be because there is not enough oversight [1]. This indicates a lack of accountability which possibly hinders the realization

**Citation:** Susilowati, E.; Joseph, C.; Vendy, V.; Yuhertiana, I. Advancing SDG No 16 via Corporate Governance Disclosure: Evidence from Indonesian and Malaysian Fintech Companies' Websites. *Sustainability* **2022**, *14*, 13869. https://doi.org/10.3390/ su142113869

Academic Editors: Akrum Helfaya and Ahmed Aboud

Received: 22 September 2022 Accepted: 20 October 2022 Published: 25 October 2022

**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

of SDG No. 16. Various companies, including FinTech companies, implement the corporate governance disclosure.

FinTech refers to companies that combine innovative technologies with financial services [5]. FinTech investments increased globally from less than USD 10 billion annually before 2013 to USD 215 billion in 2019 before declining to about USD 122 billion in 2020. The amount invested in FinTech by the first half of 2021 was already USD 98 billion [6].

FinTech is considered one of the most important breakthroughs in the financial sector. The FinTech evolution is accelerated by the auspicious rule and information technology. FinTech promises to disrupt and transform the financial sector by improving the superiority of fiscal provisions, reducing costs, and establishing a numerous diverged and steady financial environment [5,7]. With the rapid evolution of underlying advanced tools, for example, blockchain and artificial intelligence, and their widespread application in various financial-business contexts, FinTech has emerged as a crucial force in the transformation and innovation of the financial industry [8]. In addition, websites, just like blockchain, can be used to accelerate the SDG progress [9].

Interestingly, the FinTech market has the spirit of increasing financial inclusion by reaching out to people who have difficulty accessing conventional financial institutions. The problem of FinTech in Indonesia has had an impact not only on the economic aspects of society but has transformed into a form of disruptive innovation that changes the style of people's transactions [10]. FinTech delivers support to the business sphere in reducing inadequacies in their payment scheme through mobile payments, peer-to-peer (P2P) lending, robotic investment advice, blockchain technology, artificial intelligence, and machine learning [11].

FinTech companies are developing rapid evolution in recent years and have had a significant impact on society [12]. FinTech companies have already started to close the financial enclosure disparity by ways of providing facilities to the unbanked at the base (bottom) of the pyramid, made possible by new business models and information and communication technologies (ICT) [5,12]. Research on FinTech companies is pivotal because these emerging digital financial services rely on investors' funds to establish and expand their businesses. Therefore, providing effective and accountable information by FinTech companies is crucial for the achievement of SDG No 16 by carrying out effective corporate governance practices.

FinTech is the disruption in the financial industry that aims to ease access to the financial services provider and makes an effective and efficient service delivery. However, FinTech might carry some risks that are not negligible. According to KPMG [13], the FinTech industry carries three kinds of risks: risks to consumers and investors, risks to financial services firms, and risks to financial stability.

FinTech comes with risks that may harm consumers, such as the lack of consumer understanding of the nature of FinTech and its operation. The tech-savvy people might be easy to understand, but the non-tech-savvy and older people might find difficulties in understanding the services offered by FinTech. Moreover, consumers are vulnerable to losing their data and may not know how it is used. Therefore, data privacy, security, and protection are essential for consumers because when using the FinTech solution, consumers are requested to give up their data to the FinTech provider. The unauthorized use of technology poses a threat since it is possible to track people without their consent [14]. Issues of data privacy and data security regarding consumer information and protection negatively impact individuals as well as the soundness and stability of strong institutions (SDG 16) [15].

The other risks are that the boards and senior management of FinTech firms may not have sufficient awareness and understanding of FinTech and FinTech-related risks, and may, therefore, be unable to identify, measure, manage and control these risks effectively. Responsibilities and accountabilities for FinTech and risk management may also not be sufficiently clear. FinTech developments also have increased the competitive pressures on many financial services firms. Some will struggle to survive. Forbes [16] reported that in Fintech, 2022 is becoming the year of layoffs. Through LinkedIn research and speaking

directly with companies and industry insiders, Forbes identified nine FinTech businesses that have apparently shrunk their labor forces recently without any announcement or public reporting of their downsizing. Therefore, the implementation of good corporate governance is pivotal for the FinTech industry.

The SDG's 16 goal is "Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels". To build strong institutions requires strong governance as well. The four principles of good governance are accountability, transparency, openness, and the rule of law. This study elaborates on how FinTech institutions present corporate governance disclosure. The FinTech industry was chosen because it is an industry that is experiencing rapid growth. The public responds positively to FinTech companies. The Fintech industry is considered a solution for demographic bonuses, a solution to reduce unemployment rates. The government immediately responded by preparing regulations and various policies to encourage the development of this FinTech industry. Therefore, it is important and interesting how the FinTech company's governance is, whether the FinTech company has also disclosed it on their website. There is limited research on the disclosure of governance in FinTech companies. Several studies on corporate disclosure were conducted in publicly listed companies using ASEAN CG Scorecard. Therefore, this study developed the Modified Corporate Governance Disclosure Index (MoCGOvDi) to better reflect FinTech companies' characteristics.

It is worth comparing the Indonesian and Malaysian contexts because the two nations have similarities and differences in their history and culture [17]. Besides geographical proximity, both countries are categorized as emerging economies and develop FinTech as a financial industry. Based on Singapore and Malaysia FinTech News Portal, Indonesia has 181 fintech companies, while based on Malaysia Fintech Portal, Malaysia has 201 fintech companies. However, after excluding unavailable, restricted, and duplicate websites, the authors found that Indonesia and Malaysia have 148 and 159 FinTech companies, respectively, which are included in this paper.

#### *1.1. Corporate Governance in Malaysia*

The corporate governance reformation in Malaysia has been strengthened throughout time. The 2016 Companies Act sets the regulatory framework for Malaysian corporations. Introduced in 2000, the Malaysian Code on Corporate Governance (MCCG) has been an important institutional foundation for corporate governance reform and has had a favorable impact on the corporate governance practices of corporations. The MCCG incorporates worldwide concepts and widely recognized practices of corporate governance that exceed the minimum requirements established by statute, regulation, or Bursa Malaysia Berhad (the stock exchange of Malaysia). The revision of MCCG took place in 2007, 2012, and 2017 to ensure its continued relevance and alignment with internationally recognized best practices and standards. The MCCG was modified in April 2021 to adopt a new strategy to encourage the internalization of corporate governance culture.

Bursa Malaysia Berhad's Corporate Governance Guide aims to enhance the adoption and implementation of corporate governance procedures by preparing listed issuers with useful assistance. The Guide was created to represent the latest ways of thinking and the "CARE" (C—Comprehend; A—Apply; Re—Report) principle that drives the MCCG. The Guide provides an understanding of good corporate governance practices and how such principles might be used and actualized in content instead of form to assist organizations in creating sustainable value [18].
