Independence, size and performance of the board: An emerging market research (original) (raw)
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Independent directors and ownership concentration are two important things at corporate governance that affects the firm performance. Independent Directories considered capable to improve the performance of the company as it can represent all shareholder interests, especially to the company whose ownership still concentrated. Indonesia is one of the countries where the structure company ownership is still highly concentrated and vulnerable to inter-conflict shareholders. Currently, Indonesia has a regulation on liability a public company to have at least one independent director within the ranks Board of Directors. The regulation is issued by the Indonesia Stock Exchange (IDX) on 2014. This study aims to determine the impact of the existence of the independent director on firm performance in Indonesia. This study used 370companies listed on the IDX as research samples with observation period5 years from 2012 to 2016. Using the panel data regression method, this study found that independent directors had no influential effect on firm performance. This study also found that ownership concentration has no independent board of directors who influence on firmperformance.
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This study aims to determine the effect of independent commissioner in the composition of the board of commissioner on corporate performance that measured by return on assets. The research object are Islamic banks that listed on the Indonesia Stock Exchange (BEI). In examining the effect of the composition of the independent commissioner to the ROA, the author uses panel data regression test, the process using EViews7 program. We use panel data regression because the data is a cross section and also time series. Panel data regression test results indicate that there is a negative and significant impact on the composition of the board of commissioners to the ROA, indicated by coefficient β:-3.8692 and 0.0000 probabilities. The results of the test can be concluded that the more independent board in the board of commissioners in the company, it will decrease ROA. theseconditions reinforces the opinion that the implementation of the Good Corporate Governance in Indonesia is not maximized.
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Good corporate governance, is one of the keys to the company's success to grow and be profitable in the long term while winning global business competition. One of a country's economic stability is affected by the health of the banking system. The purpose of this study is to examine the impact of governance on the performance of banking companies in Indonesia. A review of the previous literature presented in this study found that corporate governance is positively related to company performance or successful in improving company performance. The research sample contained 27 banking companies listed on the Indonesia Stock Exchange during the 2013-2018 period. Empirical results show that performance such as return on assets (ROA) and return on equity (ROE) are significantly related to banking corporate governance in Indonesia. However, earnings per share (EPS), as a measure of performance does not show significant changes as a result of corporate governance. Overall this study...
Do Board of Directors´ Characteristics Influence Firm Performance? Evidence from the Emerging Market
Journal of Management Information and Decision Sciences, 2019
This study aims to investigate the impact of board of directors' characteristics on firm performance in Jordan by focusing on the following characteristics: ownership concentration, number of board meetings, CEO duality, board size, and board independence. On the other hand, Tobin's Q was used as a proxy to measure company performance. It is believed that current study contributes significantly to the limited literature on this topic in relation to developing countries by providing evidence about the effect of corporate governance on firm performance in a developing nation. For this purpose, An empirical analysis of a dataset of all publicly traded manufacturing firms listed on the Amman Stock Exchange for the period 2011-2014 was conducted by applying least squares regression analyses. This research found that ownership concentration, board meetings, and CEO duality have a significant impact on firm performance. However, the study did not find any significant effect for board size and board independence. Moreover, firm size and firm leverage as control variables were not found to have any effect on firm performance. The findings seem to suggest that for Jordanian manufacturing firms to succeed and improve their performance, they need to have a smaller sized board, more frequent board meetings and a higher percentage of board ownership and as well as CEO duality. However, the findings also indicate that board independence does not affect firm performance.