Does Corporate Governance Affect Market Performance as Well as Fundamental Performance? Evidence from Indonesian Manufacturing Sectors

Zunairoh Zunairoh, Liliana Inggrit Wijaya (), Bertha Silvia Sutejo, Marwin Antonius Rejeki Silalahi and Michelle Natasya Gozali
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Zunairoh Zunairoh: University of Surabaya
Liliana Inggrit Wijaya: University of Surabaya
Bertha Silvia Sutejo: University of Surabaya
Marwin Antonius Rejeki Silalahi: University of Surabaya
Michelle Natasya Gozali: University of Surabaya

A chapter in Proceedings of the 20th International Symposium on Management (INSYMA 2023), 2024, pp 125-131 from Springer

Abstract: Abstract This research aims to determine corporate governance’s impact on the firm’s financial performance (ROE and Tobin’s Q) in the manufacturing sector listed on the Indonesia Stock Exchange during 2016–2020. This research applied a quantitative approach with a sample of 615 observations from 123 manufacturing sector companies listed on the Indonesia Stock Exchange during 2016–2020. The collected data were then processed using multiple linear analysis models using the Eviews 10 program. The results show that the size of the board of commissioners and nomination and remuneration committee significantly affect the company’s financial performance based on ROE. In contrast, independent commissioners have no significant impact, and the size of the audit committee has a significant negative effect on the company’s financial performance based on ROE. While for the dependent variable Tobin’s Q, the size of board of commissioners, independent commissioners, and nomination and remuneration does not significantly affect the company’s financial performance, but the size of the audit committee has a significant and negative effect on the company performance based on Tobin’s Q.

Keywords: Board of Commissioners; Independent Commissioners; Audit Committee Size; Nomination and Remuneration Committee (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-244-6_22

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DOI: 10.2991/978-94-6463-244-6_22

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