Optimizing good Corporate Governance Mechanism to Improve Performance: Case in Indonesia’s Manufacturing Companies (original) (raw)
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Journal of Accounting Research, Organization and Economics, 2019
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The purpose if this study is to determine the effect of the implementation of corporate governance mechanisms, namely independent variables are considirng og the board of commissioners, managerial ownership, foreign ownership, debt financing, and audit quality. The dependent variable is company performance with control variables, which are company size and company age. The data used in this study are secondary data involving 103 companies listed on the Indonesia Stock Exchange fo rthe period 2015-2018. The dat aused in this study were analyzed using SPSS version 25. The results of this study show that: the board of commiccioners, managerial ownership, foreign ownership, debt financing and the only variable quality audit that affect the performance of company late while variable size and age of the company can not be a variable control of the performance of the company. Keywords: Coporate Governance, Board of Commissioners, Managerial Ownership, Foreign Ownership, Debt Financing, Aud...
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This study aims to examine the effect of implementing good corporate governance as measured by an independent board of commissioners, board of directors, and audit committee on financial performance measured using Return of Equity (ROE). This research uses quantitative research. The population in this study are manufacturing companies in the basic and chemical industry sectors that consistently publish financial reports on the Indonesia Stock Exchange from 2016 to 2018. Based on the purposive sampling method, a sample of 11 companies is obtained each year to obtain 33 observational data. The data in this study use warpPLS 6.0 software. The results of this study indicate that the independent board of commissioners, the board of directors affect the financial performance, while the audit committee has no effect on financial performance.
Journal of Economics, Business, and Government Challenges
This study aimed to find out the effect of Good Corporate Governance toward profitability of listed manufacturer companies in Indonesian stock exchange in 2012-2016 periods. The proxies of Good corporate governance are board of commissioners, board of directors, and audit committee. Moreover, the profitability is measured by Return On Equity (ROE). Population in this study were registered manufacturer companies in Indonesian stock exchange in 2012-2016 periods. The sampling technique is purposive sampling method. Based on this method, it is obtained 29 companies. The type of data is secondary data. The data processing uses SPSS (Statistical Package for Social Science) v.20. The data analysis technique used multiple linear regressions. The result of this study showed that partially, the Board of Commissioners and the Audit Committee have no significant effect on profitability while the Board of Directors has a significant influence on profitability. Simultaneously the Board of Comm...
Business and Economic Research, 2016
The importance of corporate governance practice is to ensure investor protection and oversight. Corporate governance is applied not only in public companies but also applied in the ordinary course of business enterprise. This study examined the characteristics of board governance as measured by the independence of the board of commissioners (independent BOD), board size, managerial ownership, board composition, the audit committee, on the implementation of corporate governance as measured through the company's financial performance measured by ROA (Return on Asset), ROE (return on Equity), and PER (Price Earning Ratio). The aim of this study was to obtain an overview of the features of board governance in public companies in Indonesia; particularly in fortifying the role of the board of commissioners in executing corporate governance. The population in this study was all of the non-financial companies listed on the Indonesia Stock Exchange (BEI) during the period from 2005 to 2013. Cross-tab analysis and regression analysis were utilized to analyze the data used in the study. The results of the cross-tab analysis indicate that the number of independent commissioners within a company is positively correlated to the number of commissioners. Furthermore, the results for cross-tab analysis between independent BOD and managerial ownership suggests that the higher the number of independent commissioners, the lower percentage of managerial stockholding in the company. In regression analysis, the variables independent BOD, board size, audit committee and managerial ownership are positively significant to company's performance measured by ROA and ROE. However, all of the previously mentioned variables are not significant to PER. Independent commissioners play a vital role, especially in regard to the financial performance measured with ROA and ROE.
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International Journal of Academic Research in Business and Social Sciences, 2020
The purpose of this study is to determine the effect of the implementation of corporate governance mechanisms, namely independent variables consisting of the board of commissioners, managerial ownership, foreign ownership and audit quality. The dependent variable is company performance a control variable, which is company size. The data used in this study are secondary data involving 103 companies listed on the Indonesia Stock Exchange for the period 2015-2018. The data used in this study were analyzed using SPSS Version 25. The results of this study show that: the board of commissioners, Ownership's managerial, foreign ownership, and quality audit only variables that affect the performance ofthe company early while the variable size of the company can not be a variable control of the performance of the company.
The goal of this study is to investigate the relationship between corporate governance practices, as indicated by the Corporate Governance Perception Index (CGPI) scores, and key performance indicators (ROA, ROE, EPS) of publicly-listed Indonesian firms. Utilizing a panel data set comprising 112 Indonesian firms across various sectors, both fixed and random effects models were employed to discern the effects of corporate governance on firm performance. The dataset spanned five years, resulting in a total of 560 observations. The findings revealed a positive and statistically significant correlation between superior governance practices and enhanced firm performance. Specifically, a one-unit increase in the CGPI Score corresponded with increases in ROA, ROE, and EPS, even after controlling for variables such as firm size and industry type. Corporate governance plays a pivotal role in influencing the financial performance of Indonesian firms. Firms adhering to higher governance standards showcased better performance metrics, underscoring the strategic importance of robust governance mechanisms in the Indonesian business landscape. The results hold significant implications for Indonesian businesses, investors, and policymakers. Effective governance practices not only serve as a beacon for potential investors but also position firms for sustained growth and stakeholder trust in an increasingly competitive and interconnected global economy.
The Influences of Corporate Governance Mechanism towards Company’s Financial Performance
Audit Financiar, 2019
The aim of this study is to find out whether the board of commissioners, board of independent commissioners, audit committee, managerial ownership, institutional ownership, or auditor type has an influence on company's financial performance. The method used is double regression analysis. The studied population is involving real estate companies which are registered in BEI (Indonesian Stock Exchange). Then, the sample itself is purposive sampling and the data type used is financial report data. The result shows that the board of commissioners and institutional ownership has significant positive influence toward financial performance; meanwhile, board of independent commissioners, audit committee, managerial ownership, and auditor type has no significant influence on financial performance.
Global Business and Management Research: An International Journal, 2013
Purpose-This research aims to examine the effect of good corporate governance implementation on corporate performance as measured by EVA. The previous research has shown that corporate performance is related to good corporate governance implementations. But it's still rarely the research that use EVA on measuring corporate performance. Design/methodology/approach-This research use manufacture companies which are listed on Indonesia Stock Exchange period 2006-2010 as the samples. Purposive Sampling was used to determine sample criteria: go public manufacturing companies in period 2006-2010 which consistently publish annual report and financial reports on the website of Indonesia Stock Exchange (IDX) or its own site; companies that have selected as the 40 companies with the largest size. Path Analysis was conducted to shows its direct and indirect effects of each path. Findings-The results of this research show that implementation of GCG can affects directly on corporate performance as measured by EVA, and also shows affect indirectly through firm size. In other words, firm size has a mediation role in the impact of good corporate governance implementation on corporate performance. Practical Implication-This study is expected to contribute in providing an overview of the implementation of GCG in Indonesia which can be used by investors and potential investors as one consideration in making investment decisions, and reinforcing previous studies regarding the relationship between GCG implementation and corporate performance. Originality/value-Seeing the controversies among previous researches in the GCG and its impact on corporate performance, this study sought to further investigate the direct effect of GCG implementation on corporate performance as measured by EVA and its indirect effect through its size.