Abstract
This study investigates the effect of the board of directors on financial performance and company capital, either directly or indirectly with the risk management in Indonesia. This study presents an empirical investigation with samples of 31 nonfinancial companies out of a total population of 48 listed on the Indonesia stock exchange for the period from 2010 and 2016. The sampling method used was purposive sampling. Methods of data analysis in this study used Structural Equation Modeling (SEM). The results of the SEM model find that there is a significant positive effect of risk management and the tenure-Chief Executive Officer (CEO) on financial performance and company capital. However, CEO duality has a significant negative effect on financial performance. The results also find that the effect of CEO duality and board size are significantly positive on financial performance through risk management. This is the first-time paper to seek to influence the effect of the board of directors, financial performance, and company capital, either directly or indirectly on risk management in Indonesia.
Published Version
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