Corporate Governance and Financial Performance of Consumer Goods Industry Companies Listed on Indonesia Stock Exchange

Henny Setyo Lestari (), Bahtiar Usman, Syofriza Syofyan, Lavlimatria Esya and Hartini Hartini
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Henny Setyo Lestari: Faculty of Economic and Business, Universitas Trisakti, Management Study Program
Bahtiar Usman: Faculty of Economic and Business, Universitas Trisakti, Management Study Program
Syofriza Syofyan: Faculty of Economic and Business, Universitas Trisakti, Management Study Program
Lavlimatria Esya: Faculty of Economic and Business, Universitas Trisakti, Management Study Program
Hartini Hartini: Faculty of Economic and Business, Universitas Trisakti, Management Study Program

A chapter in Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022), 2023, pp 307-314 from Springer

Abstract: Abstract This study aims to investigate the effect of corporate governance on financial performance in consumer goods industry companies listed on the Indonesia Stock Exchange in the period 2016 -2020. The independent variables used consist of insider shareholding, board size, board independence, board meeting, and board gender diversity, and the control variables used are leverage and firm size. The dependent variable used is financial performance with measurement proxies using Tobin's Q. The study examines 31 consumer goods industry companies. The results of this study indicate that insider shareholding, independent board, board meetings, and firm size do not affect financial performance. Board size has a positive significant effect on financial performance. Board gender diversity and leverage have a negative significant effect on financial performance. Companies in the consumer goods sector are expected to reduce their share ownership by internal parties so that their internal parties will continue to focus on their primary objectives without prioritizing their interests as company shareholders.

Keywords: independent board; financial performance; board member diversity; Internal stock ownership; leverage; board meetings; board size; company size (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-350-4_29

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DOI: 10.2991/978-94-6463-350-4_29

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