Abstract
This study examines the effect of risk governance on bank performance of Indonesian public companies. The sample consists of 86 banking companies listed on Indonesian Stock Exchange for period 2016-2017. The accounting-based and market-based approach were used to measure the performance, while risk governance disclosure was measured by risk disclosure, number of risk committee and frequency of risk committee meetings. The results of this study find that the extent of of risk disclosure and the number of risk committee have significantly effect both on accounting-based and market-based performance. However, this study failed to suggest that the frequency of risk committee meetings affect bank performance. The findings of this study suggest that the presence of good risk governance mechanism may reduce the potential risks faced by banking companies while providing a positive impact on the performance.
Highlights
This study examines the effect of risk governance on bank performance of Indonesian public companies
The results of this study find that the extent of of risk disclosure and the number of risk committee have significantly effectboth on accounting-based and market-based performance
The findings of this study suggest that the presence of good risk governance mechanism may reduce the potential risks faced by banking companies while providing a positive impact on the performance
Summary
Dalam proses menjalankan operasi perusahaan, akan timbul masalah-masalah antara pemilik dan manajemen yang kemudian menyebabkan perbedaan kepentingan. Dalam kerangka kerja tersebut dijelaskan bahwa hubungan antara manajer dan pemegang saham harus menggunakan informasi secara efektif dan efisien, sehingga dapat meminimalisir biaya perusahaan dalam menanggung risiko dan ketimpangan informasi (Eisenhardt, 1989). Cara yang dinilai paling tepat untuk dapat melihat kinerja bank saat ini dan posisinya nanti di masa depan adalah dengan melakukan analisis rasio (Nataraja et al, 2018).Penelitian ini berfokus pada dua pengukuran kinerja bank, kinerja operasional dan kinerja pasar bank (Nahar et al, 2016). Dengan melakukan pengukuran kinerja melalui rasiorasio tersebut, dapat membantu dalam melihat keadaan internal perusahaan, membandingkan kinerja pasar bank dengan bank yang lainnya, serta dapat membantu dalam proses pengambilan keputusan (Nataraja et al, 2018)
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