ENTERPRISE RISK MANAGEMENT DISCLOSURE AS AN INTERVENING VARIABLE IN THE EFFECT OF GOOD CORPORATE GOVERNANCE IMPLEMENTATION AND FIRM SIZE ON FINANCIAL PERFORMANCE (STUDY ON BANKING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE FOR THE PERIOD 2013 – 2018

Dessie Leventa Moezaque,Apollo Daito

doi:10.38035/dijefa.v1i5.619

Abstract

This study aims to examine the effect of the Implementation of Good Corporate Governance and Firm Size on Financial Performance with Enterprise Risk Management Disclosure as an intervening variable. The analysis technique used in this study is multiple linear regression analysis, with the population of banking companies listed on the Indonesia Stock Exchange during the period 2013 to 2018. From the specified sample criteria there were 39 companies that met the criteria. The results of this study indicate that (1) GCG implementation has no significant effect on ERM Disclosure; (2) Firm Size has a positive and significant effect on ERM Disclosure: (3) The application of GCG has a positive and significant effect on Financial Performance; (4) Firm Size has a positive and significant effect on Financial Performance; (5) ERM disclosure has no significant effect on Financial Performance; (6) ERM disclosure does not mediate between the Implementation of GCG to Financial Performance; (7) The disclosure of ERM does not mediate between Firm Size and Financial Performance.

Highlights

Stakeholders assess a company's excellence through the financial performance
The results of this study indicate that (1) GCG implementation has no significant effect on Enterprise Risk Management (ERM) Disclosure; (2)
The purpose of this study is to examine (1) Does the Implementation of GCG affect the ERM Disclosure ?; (2) Does Firm Size affect ERM Disclosure ?; (3) Does the Implementation of GCG affect the Financial Performance ?; (4) Does Firm Size affect Financial Performance ?; (5) Does ERM Disclosure affect Financial Performance ?; (6) Does ERM Disclosure mediate the relationship between GCG Implementation and Financial Performance ?; (7) Does ERM Disclosure mediate the relationship between Firm Size and Financial Performance?

Summary

INTRODUCTION

Stakeholders assess a company's excellence through the financial performance. An issue regarding the financial performance occurred in Indonesia banks, there are 26 of 43 banks showed the profit decrease in the first quarter of 2019 compared by the first quarter of 2018. Earnings orientation make the companies to encourage the strategies that will be taken to obtain the high profits for the sustainability of the company. Risk management is a way to identify and manage risks that can affect the achievement of company performance. Good corporate governance can demonstrate management's ability to manage the company. Another factor identified that can affect financial performance is firm size or company size. The purpose of this study is to examine (1) Does the Implementation of GCG affect the ERM Disclosure ?; (2) Does Firm Size affect ERM Disclosure ?; (3) Does the Implementation of GCG affect the Financial Performance ?; (4) Does Firm Size affect Financial Performance ?; (5) Does ERM Disclosure affect Financial Performance ?; (6) Does ERM Disclosure mediate the relationship between GCG Implementation and Financial Performance ?; (7) Does ERM Disclosure mediate the relationship between Firm Size and Financial Performance?

LITERATURE REVIEW Agency Theory

FINDINGS AND DISCUSSION

Discussion The results of the data processing as follow

CONCLUSION AND SUGESTION