Good Corporate Governance Research Articles

The Influence of Financial Distress, Earnings Management, and Financial Performance on Firm Value with Good Corporate Governance as a Moderating Variable

This study examines the influence of financial distress, earnings management, and profitability on firm value, with good corporate governance (institutional ownership) as a moderating variable. Focusing on infrastructure sector companies listed on the Indonesia Stock Exchange from 2019 to 2023, this research employs Tobin's Q to measure firm value, the Altman Z-Score for financial distress, the modified Jones model for earnings management, and Return on Assets (ROA) for profitability. The findings reveal that profitability positively and significantly affects firm value, while financial distress and earnings management show no significant impact. Additionally, institutional ownership does not moderate the effects of financial distress and earnings management on firm value, though it successfully moderates the relationship between profitability and firm value. These results underscore the importance of profitability and good corporate governance in enhancing firm value, with implications for investor decision-making and corporate strategy in Indonesia’s infrastructure sector.

Effect Of Profitability and Good Corporate Governance On Firm Value With Corporate Social Responsibility As An Intervening Variable

The company was founded with a goal, one of which is to improve the welfare of its shareholders. By increasing the company's share price, the company's value in the eyes of investors will also increase. The value of a company can be seen from the Tobin'Q ratio. Companies registered in LQ 45 have quite high company value. The aim of this research is to analyze the influence of profitability and GCG on company value through CSR as an intervening variable. This research is a type of associative research with a quantitative approach. The object of this research is the LQ 45 company listed on the IDX for the 2018–2022 period. Sampling in this study used a purposive sampling method and 20 companies were found that met the sample criteria. This research uses secondary data in the form of Sustainability reports and company annual reports. This research uses the path analysis method using SPSS as an analysis tool. The results of this research show that: (1) Profitability has a positive and significant influence on company value. (2) GCG has a positive and insignificant influence on company value. (3) CSR has a significant positive influence on company value. (4) Profitability has a positive and significant influence on company value throught CSR. (5) GCG has negative and insignificant influence on company value throught CSR.

Analysis of the Effect of Good Corporate Governance Mechanisms and Financial Performance on the Disclosure of Sustainability Reports with Firm Size as a Moderating Variable in Banking Companies Listed on the Indonesia Stock Exchange 2017-2022

The purpose of this study was to test and analyze the effect of Good Corporate Governance (GCG) and others: managerial ownership, number of Board of Commissioners and Audit Committee, and Financial Performance, which included ROA and ROE on company sustainability in banking sub-sector companies listed on the Indonesia Stock Exchange. In addition, this study also aims to determine whether the firm size can be used as a moderation variable to strengthen or weaken the relationship between good corporate governance (GCG) and the financial performance of the company's sustainability. This research is a type of quantitative research with a descriptive approach. Purposive sampling techniques were used from 47 banking companies in the IDX, and 19 banks were included in the research sample within 6 years of the period. The data used are secondary data and data collection methods, accessed by accessing the IDX's 2017-2022 annual report. The results of this study show that good corporate governance (GCG) has no significant effect on sustainability. The audit committee has no significant effect on sustainability reports. Managerial ownership has a significant effect on sustainability reports, independent commissioners have no significant effect on sustainability reports, the Board of directors has no significant effect on sustainability reports, and financial performance has a significant effect on sustainability reports, where ROA and ROE have a significant effect on sustainability reports. Firm size can moderate the influence of GCG and financial performance with sustainability reports. Keywords: good corporate governance, audit committee, board of commissioners, managerial ownership, financial performance, ROA, ROE, sustainability report, and firm size

Breaking down the impenetrable wall: What are the barriers to good corporate governance practices above all?

Good corporate governance practices are essential in every organisation to ensure accountability and due diligence enhancing corporate value. However, some countries face barriers to good corporate governance practices such as poor regulatory frameworks, perceived constraints, and threats from external factors, etc. Therefore, the organisations will face consequences such as eroding shareholder confidence, declining market value and the organisation integrity. Hence, the study’s main objective is to systematically review the barriers to good corporate governance practice in the global context. This study uses a systematic literature review whereby the authors analyse 24 selected articles. Therefore, the main findings indicated ten barriers to good corporate governance practices. The ten barriers are weak regulatory framework, perceived constraints, poor quality of information, external business factors, lack of awareness, confusion of authority, lack of monitoring, board diversity, transparency and investor protection. These findings provide significant contributions in theoretical development for potential scholars and practical implications for organisations, stakeholders, investors, and corporate leaders who aim to strengthen the governance framework, improve organisational resilience and promote sustainable value creation to understand these barriers comprehensively.

The Triple Bottom Line: Prioritizing CSR, Human Capital, and GHG Reduction for Sustainable Economic Growth in Indonesia

Our study, which covered the years 2008 to 2022, aimed to create “autoregressive vectors” to investigate the interrelationships between corporate social responsibility (CSR), greenhouse gas net (GHG), human capital (HCPT), and human resources in Indonesia. We used data from the World Bank, OECD, and Bank Republic Indonesia to conduct an analysis of the correlation between these variables. Our results showed that there are significant relationships between corporate governance self-assessment (CGS), GHG, and HCPT in Indonesia. The positive correlation between GHG and CGS suggests that as GHG emissions increase, the level of corporate governance self-assessment also increases. This finding implies that companies that prioritize reducing GHG emissions tend to have better corporate governance practices. Moreover, investing in reducing GHG emissions can have a positive impact on human capital development. However, the negative correlation between HCPT and CGS implies that an increase in human capital may result in a decrease in the level of corporate governance self-assessment. This finding highlights the importance of balancing investments in human capital with maintaining good corporate governance practices to ensure sustainable economic growth. Furthermore, promoting corporate social responsibility can enhance companies’ reputation and increase their brand value, which can positively impact their CGS. Therefore, it is essential for companies to prioritize CSR practices, invest in human capital development, and reduce GHG emissions to ensure sustainable economic growth and maintain good corporate governance practices in Indonesia. Keywords: corporate social responsibility, greenhouse gas net, human capital

The Participation toward on Corporate Social Responsibilities of the guesthouse business in the Luang Prabang city Luang Prabang Province

The objectives of this research were to study the operating conditions of guesthouse business in the Luang Prabang city, to study The Participation toward on Corporate Social Responsibilities of the guesthouse business in the Luang Prabang city Luang Prabang Province and to analyze the Corporate Social Responsibilities participation influences the operation of the guesthouse business in the Luang Prabang city Luang Prabang Province. The research was conducted by using a questionnaire as an instrument for collecting data from 124 Guesthouse Entrepreneurs/executives in the Luang Prabang city, Luang Prabang Province. The Cronbach alpha reliability coefficient was 0.968. The statistics used for data analysis were frequency, percentage, mean, standard deviation, multiple regression analysis. The results found that: In terms of success in the operation of the guesthouse business, it was found that the overall the business has a high level of success consisted of marketing, internal Management, products\services and Financial Perspective. Participation toward Corporate Social Responsibilities of the guesthouse business in Luang Prabang city. Overall, the Guesthouse business had been involved in social responsibility at a higher level. With a lot of responsibility towards on Good corporate governance of the organization, the Conducting business with fairness in the organization, the corporate consumer responsibility, the Environmental carrying and the participating development in community and social. The Social responsibility in terms of environmental responsibility and the participating development in community and social had influences the financial /returns of the Guesthouse business, the participating development in community and social had influences in the Marketing of the guesthouse business, social responsibility in terms of the Conducting business with fairness in the organization and the participating development in community and social had influences in the management and Products\Services of the guesthouse business in the Luang Prabang city.

KOMITE MANAJEMEN RISIKO, EKSTERNAL TATA KELOLA DAN KINERJA PERUSAHAAN

Good corporate governance can increase the value of a company by implementing a commitment to achieve predetermined goals. One of these goals is meeting the expectations of investors, shareholders, and other stakeholders to achieve maximum profit. This study aims to provide empirical evidence regarding implementing the Risk Management Committee and its impact on company performance. Organizations, as systems, constantly interact with their environment, which is influenced by individual psychology. The study uses a sample of 100 companies listed on the Indonesia Stock Exchange out of 848 as of March 2023. The Risk Management Committee's characteristics are measured by the team leader's number of members and the leader's family affiliation with the company's management. The level of competitiveness is calculated using the Hirschman-Herfindahl index. Multiple regression tests were conducted to examine these variables. The results show that the number of risk management committees and family affiliations has a negative impact on firm value, while the level of competitiveness has a positive effect. However, only the family affiliation of the chairman of the risk management committee significantly affects firm value. The study's limitation lies in measuring the Risk Management Committee's characteristics, and further research is needed with different measurements. The results of this study can be helpful for investors when making investment decisions and for companies when presenting non-financial information.

Does corporate governance differ by sector? An analysis under good practice criteria. The case of Spain.

The aim of this paper is to analyse how the factors remuneration, supervision and board structure influence the good corporate governance of companies in the Spanish Continuous Market. This paper develops, for the first time, an index based on the recommendations defined in the Good Governance Code of Listed Companies. This paper measures remuneration, monitoring and governance structure and employs a multiple linear regression model modelling corporate governance as a latent factor. Based on this model, this research presents empirical evidence of the relationship between corporate governance and the defined variables, considering Spanish Continuous Market firms disaggregated by sector. To date, there are no studies that have taken into account the analysis for all sectors in the same country. Among the conclusions, the research finds that the larger a company is, the better the mechanisms for providing an optimal degree of governance, as is the case in the oil, energy and technology sectors. In another sense, the higher the number of proprietary directors the lower the levels of good governance, mainly in basic materials, industrial, construction and consumer goods and services companies. The empirical results also justify the inclusion of Corporate Governance-related factors in governance regulation.

Model Rekrutmen Direksi dan Komisaris yang Mandiri dan Akuntabel pada Perusahaan Perseroan dalam Kerangka Hukum BUMN di Indonesia

One of the keys to the success of a company, whether private or government owned, cannot be separated from the people who will lead the company. As is the case with BUMN directors and commissioners, they are people who struggle to bring the company to better development. Therefore, in order to find a leader, whether a director or commissioner, it will really depend on what model is used in the recruitment. With the right recruitment model, it is hoped that it can reduce or even eliminate various aspects of certain interests that can arise from the positions that will be held by company leaders (directors and commissioners). The form of recruitment must reflect a form that truly provides clear, clear boundaries regarding the rights and roles of effective, efficient and accountable clarity in accordance with the principles of good corporate governance (GCG). As a result, there is legal clarity and equality for all in conditions of economic progress.

Management Guidelines for Listed Companies on the Stock Exchange of Thailand for Moving Towards Sustainability

The United Nations introduced “Transforming our World: the 2030 Agenda for Sustainable Development” as a global action plan with 17 Sustainable Development Goals (SDGs) and 169 targets. In alignment with this agenda, the Stock Exchange of Thailand (SET) launched the Thailand Sustainability Investment Index (THSI) in 2015 to promote Environ­mental, Social, and Governance (ESG) factors. However, the number of sustainable companies has decreased, and Thailand’s economic competitiveness and foreign direct investment (FDI) have declined. This research thus aimed to develop guidelines for becoming a sustainable company using a mixed-methodology approach, including qualitative interviews, survey study, and focus group discussions. Quantitative data came from a survey of 500 sustainable companies listed on SET. The findings indicated that guidelines for SET-listed companies to achieve sustainability should consist of four latent variables, arranged in order of importance: organizational support, environmental protection, social responsibility, and corporate good governance. The most critical factor identified is the accurate and transparent reporting of financial performance. Additionally, the tested hypothesis indicated differences in market capitalization with overall aspects significantly different at the 0.05 level. These insights provide valuable strategies for businesses, policymakers, and educational institutions dedicated to advancing sustainable development and improving economic competitiveness in Thailand.

Comparative Analysis of Bank Health Levels Using the RGEC Method at PT. Bank Mandiri Tbk and PT Bank Central Asia Tbk Year 2018 - 2020

This research aims to determine the level of bank health at PT Bank Mandiri (Persero) Tbk compared to PT Bank Central Asia Tbk using the RGEC (Risk profile, Good Corporate Governance, Earnings, Capital) method for 2018-2020. This type of research uses quantitative descriptive research. The variables used by researchers are RGEC and Bank Health. The research subject is PT. Bank Mandiri (Persero) Tbk and PT. Bank Central Asia Tbk is listed on the Indonesia Stock Exchange (BEI) for 2018-2020. The object of this research is the annual report of the two banks. The data analysis method uses financial report analysis and GCG self-assessment reports for the RGEC method. The research results show that the average composite value for Bank Mandiri is 91% while BCA is 96.67%, meaning that in the RGEC analysis for assessment based on ratios (NPL, LDR, Self Assessment GCG, ROA, NIM, CAR) BCA bank has a higher level of health compared to Mandiri banks. Keywords: Bank Health, Composite Value, RGEC

Financial Performance Mediates the Influence Between Good Corporate Governance and Firm Value

Financial Performance Mediates the Influence Between Good Corporate Governance and Firm Value

Pengaruh Good Corporate Governance, Reputasi Audit, Dan Leverage Terhadap Integritas Laporan Keuangan Dengan Moderasi Kualitas Audit

This research is quantitative research which aims to analyze the influence of Good Corporate Governance, auditor reputation, and leverage on the integrity of financial reports with audit quality as a moderating variable. The research was conducted on mining sector companies listed on the Indonesia Stock Exchange (BEI) for the 2019-2023 period. The data used is secondary data with a purposive sampling method. The data testing techniques used include the classic assumption test, multiple linear regression test, and moderated regression analysis (MRA) test. The research results show that GCG and auditor reputation have no effect, while leverage has a positive effect on the integrity of financial reports. Meanwhile, audit quality is unable to moderate the influence of GCG, auditor reputation, and leverage on the integrity of financial reports. Therefore, companies need to pay attention to factors that can affect the integrity of financial reports, especially related to the company's debt level.

Governance and Risk Management in Sharia Banks and Financial Performance

General Background: The financial performance of Sharia commercial banks is crucial for Indonesia's economic growth. Specific Background: This study explores the impact of Good Corporate Governance (GCG), Internal Audit, and Risk Management on the financial performance of Sharia banks, particularly after the enactment of Law No. 21 of 2008. Knowledge Gap: Existing literature shows mixed results regarding the effects of these governance factors, indicating a need for comprehensive analysis in the context of Sharia banking. Aims: The research aims to assess how GCG, Internal Audit, and Risk Management affect financial performance from 2018 to 2021. Results: Analysis of 44 Sharia banks reveals that while Internal Audit negatively affects performance, GCG and Risk Management have significant positive impacts. Novelty: This study introduces a thorough examination of Risk Management alongside GCG and Internal Audit, enhancing the understanding of their roles in Sharia banking. Implications: Findings highlight the importance of strengthening governance frameworks in Sharia banks to improve financial performance, providing insights for investors and policymakers. Highlights: Good Corporate Governance and Risk Management significantly enhance financial performance in Sharia banks. Internal Audit shows a negative impact on the financial performance, emphasizing the need for effective implementation. The study addresses a gap in literature by examining the interplay of GCG, Internal Audit, and Risk Management in the Sharia banking sector. Keywords: Good Corporate Governance, Internal Audit, Risk Management, Financial Performance, Sharia Banks

PENGARUH CORPORATE SOCIAL RESPONSIBILITY, GOOD CORPORATE GOVERNANCE DAN DIVIDEND POLICY TERHADAP KINERJA PERBANKAN DI INDONESIA

This research aims to examine the influence of corporate social responsibility, good corporate governance (institutional ownership and board size), and dividend policy on the financial performance of banking in Indonesia Stock Exchange (IDX) during the period of 2018 to 2022. A sample of 44 was selected using purposive sampling. The analysis was conducted using E-Views, and the results indicate that corporate social responsibility, good corporate governance, and dividend policy simultaneously affect financial performance. CSR and GCG (institutional ownership and board size) do not significantly influence banking performance in Indonesia, while dividend policy has a significant negative effect on banking performance. This study provides insights for banks and investors to consider dividend policy in managing their businesses and making investment decisions.

PENGARUH GOOD CORPORATE GOVERNANCE DAN GREEN INNOVATION TERHADAP KINERJA BERKELANJUTAN PERUSAHAAN

This study aims to analyze the effect of good corporate governance and green innovation on sustainability performance. This study is classified as an associative quantitative study. The type of data used is secondary data obtained from www.idx.co.id and the company's website. The population in this study is the Sri-Kehati Company Listed on the IDX for the 2019-2023 Period. While the sample of this study was determined by the purposive sampling method so that 20 sample companies were obtained. The analysis method used is Panel Data Model Regression analysis. The results of this study indicate that good corporate governance and green innovation have an effect on sustainability performance, good corporate governance has an effect on sustainability performance, green innovation has no effect on sustainability performance.

Exploring the Relationship Between Environmental, Social, and Governance and Tax Avoidance Strategies

This study investigates how each environmental, social, and governance (ESG) dimension relates to tax avoidance in well- and poorly governed firms. The analysis uses data from 2016 to 2020 on A-share companies listed on the Shanghai and Shenzhen stock exchanges and three panel methodologies: pooled ordinary least squares, random effects, and fixed effects models. The results show that not all ESG dimensions are equally associated with tax avoidance, and the relationship between ESG and tax avoidance differs between well- and poorly governed firms. For well-governed firms, the social and governance dimensions positively correlate with tax avoidance, whereas the environmental dimension does not. For poorly governed firms, none of the three dimensions correlate with tax avoidance. These findings suggest that ESG and tax avoidance are more compatible than conflicting. Moreover, they underscore the importance of good corporate governance in enabling tax avoidance as an ESG-compatible strategy. This study addresses the debatable relationship between ESG and tax avoidance, which has significant implications for stakeholders, including managers, investors, and policymakers.

The Effect of Leverage and Political Connections on the Performance of State-Owned Enterprises

This study aims to examine the influence of leverage and political connections on the performance of state-owned enterprises (SOEs) with good corporate governance (GCG) as a moderating variable. The research uses a quantitative approach, with the population consisting of SOEs listed on the Indonesia Stock Exchange (IDX). The sample was selected using purposive sampling, resulting in 13 companies being chosen as the study's subjects. The results of the study indicate that leverage negatively affects company performance, meaning that the higher a company's debt, the lower its performance. Conversely, political connections have a positive impact on performance, suggesting that political involvement can provide advantages in enhancing a company's performance. Additionally, good corporate governance is found to positively influence company performance, reinforcing the importance of sound governance in supporting operational success. Good corporate governance also acts as a moderating variable. GCG weakens the negative relationship between leverage and company performance, while strengthening the positive impact of political connections on performance. This indicates that strong governance practices can help mitigate the adverse effects of high leverage and maximize the benefits of political connections that the company may have.

Key Factors Affecting the Value of Energy Sector Companies

The purpose of this study is to empirically test the effect of Debt-to-Equity Ratio (DER) and Return on Asset Ratio (ROA), moderated by Good Corporate Governance (GCG), on the Company's Value. This research is conducted using a quantitative approach with four variables. The independent variables are Debt to Equity Ratio (DER), Return on Assets (ROA), and Good Corporate Governance as the moderating variable, while the dependent variable is the Company's Value (Price to Book Value). The study was conducted on the Indonesia Stock Exchange during the period 2021-2023, and the data were sourced from the official Indonesia Stock Exchange website, with a population and sample consisting of 31 companies in the Energy Sector, specifically the Oil, Gas, and Coal Sub-sectors. The results of the analysis using robust regression show that the independent variable (X1) does not affect Y, with a probability value greater than alpha, while the independent variable (X2) significantly affects Y. Furthermore, the interaction between variable (X1) and the moderating variable is not able to significantly moderate the effect of variable X1 on Y, and the interaction between variable X2 and the moderating variable is also not able to significantly moderate the effect of variable X2 on Y.

The Influence of Good Corporate Governance on Financial Performance in Indonesian Islamic Banking

This study examines the impact of Good Corporate Governance (GCG) on the financial performance of Sharia banking in Indonesia Tbk. Analyzed GCG variables include the Board of Commissioners, Board of Directors, Independent Commissioners, Sharia Supervisory Board, and Audit Committee. Using a quantitative method with multiple linear regression analysis, the study employs secondary data from annual reports of Sharia banking in Indonesia Tbk. Normality tests were conducted using the One-Sample Kolmogorov-Smirnov test, while heteroscedasticity tests were performed using a scatterplot of residuals against standardized predicted values.Results indicate that none of the independent variables significantly impact financial performance, with p-values well above 0.05. Additionally, the F-test (ANOVA) shows that the independent variables collectively do not significantly impact financial performance, with an F value of 0.243 and a p-value of 0.939. The very low coefficient of determination (R²) of 0.048 suggests that the regression model explains only 4.8% of the variation in financial performance.The implementation of GCG principles at Bank Muamalat Syariah Tbk has not effectively improved financial performance. Therefore, evaluation and improvement of GCG implementation are needed, along with consideration of other factors potentially influencing financial performance. Recommended measures include enhancing the capacity of the Board of Commissioners and Board of Directors, optimizing the role of Independent Commissioners, and increasing the effectiveness of the Sharia Supervisory Board and Audit Committee to improve the bank's financial performance.