THE EFFECT OF BOARD SIZE, INDEPENDENT COMMISSIONERS, AND REMUNERATION ON THE FINANCIAL PERFORMANCE OF MANUFACTURING COMPANIES ON THE IDX
Keywords:
board size, independent commissioners, remuneration, financial performance
Abstract
Corporate governance and financial performance are complex topics and have been widely researched and show contradictory results in the literature. The aim of this study is to examine and evaluate the influence of board size, independent commissioners and remuneration on financial performance. The research used the purposive sampling approach to collect data from 206 manufacturing corporate listed on the IDX throughout the designated period of 2021 and 2022. Financial performance in this study applying the metrics of Return on Assets (ROA) and Return on Equity (ROE) as the dependent variables. The research used a quantitative technique, using secondary data in the form of yearly reports collected from the Indonesia Stock Exchange. The data will be evaluated using the F-test, the t-test, multiple linear regression, and the coefficient of determination. The research findings indicate that: 1) the size one on the board of directors has an insignificant influence on both ROA and ROE; 2) the presence of an independent commissioners has an insignificant effect on ROA and ROE; 3) and remuneration has a significant and positive effect on both ROA and ROE. The financial performance is simultaneously affected by the board size, the presence of independent commissioners on the board, and the amount of remuneration.References
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Ruparelia, R., & Njuguna, A. (2016). Relationship between Board Remuneration and Financial Performance in the Kenyan Financial Services Industry. International Journal of Financial Research, 7(2), 247–255. https://doi.org/10.5430/ijfr.v7n2p247
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Titania, H., & Taqwa, S. (2023). Pengaruh Good Corporate Governance terhadap Kinerja Keuangan Perusahaan. JURNAL EKSPLORASI AKUNTANSI, 5(3), 1224–1238. https://doi.org/10.24036/jea.v5i3.795
Tunggal, W. S. P., & Fachrurrozie. (2014). PENGARUH ENVIRONMENTAL PERFORMANCE, ENVIRONMENTAL COST DAN CSR DISCLOSURE TERHADAP FINANCIAL PERFORMANCE. Accounting Analysis Journal, 3(3), 310–320. http://journal.unnes.ac.id/sju/index.php/aaj
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Abebe Zelalem, B., Ali Abebe, A., & Wodajo Bezabih, S. (2022). Corporate governance and financial performance in the emerging economy: The case of Ethiopian insurance companies. Cogent Economics and Finance, 10(1), 1–18. https://doi.org/10.1080/23322039.2022.2117117
Akter, S., Ali, M. H., Abedin, M. T., & Hossain, B. (2020). Directors’ remuneration and performance: Evidence from the textile sector of Bangladesh. Journal of Asian Finance, Economics and Business, 7(6), 265–275. https://doi.org/10.13106/JAFEB.2020.VOL7.NO6.265
Ali, M. B., & Shadrach Monica. (2023). Impact of Board Size and Independence on Financial Performance of Listed Deposit Money Banks in Nigeria. African Scholars Journal of Business Dev. and Management Res. (JBDMR-7), 28(7), 209–224.
Allen, J., & Roo, S. (2023). A new order Special report-Biggest ranking reshuffle in 20 years.
Bancin, K. A., & Harmain, H. (2022). Pengaruh Good Corporate Governance Terhadap Kinerja Keuangan Perusahaan Terdaftar Di BEI Tahun 2016-2020. Owner: Riset & Jurnal Akuntansi, 6(4), 3714–3723. https://doi.org/10.33395/owner.v6i4.1124
Fahmi, I. (2015). Analisis Laporan Keuangan (Cetakan kelima). CV Alfabeta.
Haryani, N. I., & Susilawati, C. (2023). PENGARUH UKURAN DEWAN KOMIASRIS, UKURAN DEWAN DIREKSI, UKURAN PERUSAHAAN, KEPEMILIKAN INSTITUSIONAL, DAN KOMISARIS INDEPENDEN TERHADAP KINERJA KEUANGAN. Jurnal of Economic, Business and Accounting, 6(2), 2425–2435.
Hediono, B. P., & Prasetyaningsih, I. (2019). PENGARUH IMPLEMENTASI GOOD CORPORATE GOVERNANCE TERHADAP KINERJA KEUANGAN PERUSAHAAN. JRMB, 14(1), 47–58.
Http: www.idx.co.id
Kemenperin. (2023, May 5). Kontribusi Dominan dan Melonjak, Industri Manufaktur Masih Pede. Kemenperin. kemenperin.go.id/artikel/24036/Kontribusi-Dominan-dan-Melonjak,-Industri-Manufaktur-Masih-Pede-
Kirana, C. A., & Novita, N. (2021). REMUNERASI DIREKSI, DISPARITAS GAJI ANTAR DIREKSI DAN KINERJA PERUSAHAAN. Jurnal Akuntansi Kontemporer, 13(2), 81–95. https://doi.org/10.33508/jako.v13i2.3077
Kyere, M., & Ausloos, M. (2021). Corporate governance and firms financial performance in the United Kingdom. International Journal of Finance and Economics, 26(2), 1871–1885. https://doi.org/10.1002/ijfe.1883
Manossoh, H. (2016). Good Corporate Governance Meningkatkan Kualitas Laporan Keuangan (I. Wulansari, Ed.; 1st ed.). PT. Norlive Kharisma Indonesia.
Meilani, A. D., Zulaikha, Z., & Sari, R. P. (2023). Corporate Governance and Banking Performance amid Covid-19 in Indonesia. Accounting Analysis Journal, 11(3), 196–205. https://doi.org/10.15294/aaj.v11i3.65812
Naik, M., Padia, N., & Callaghan, C. W. (2020). Variable executive remuneration and company performance: Insights from the Johannesburg Stock Exchange, South Africa. Acta Commercii, 20(1). https://doi.org/10.4102/ac.v20i1.790
Nuryana, Y., & Surjandari, A. S. (2019). The Effect of Good Corporate Governance Mechanism, and Earning Management on Company Financial Performance. Global Journal of Management and Business Research, 19(1), 26–39.
Pangestu, A. P., Agustia, S., & Rachman, A. (2019). Pengaruh Pemberian Remunerasi Direksi Terhadap Kinerja Keuangan Perusahaan Publik di Indonesia. SAKI: Studi Akuntansi Dan Keuangan Indonesia, 2(1), 49–77.
Puspasari, N. K., & Sujana, I. K. (2021). The Effect of Corporate Social Responsibility Disclosure and Board Remuneration on Financial Performance with the Presence of Woman in the Good Corporate Governance Structure. American Journal of Humanities and Social Sciences Research, 5(1), 637–642. www.ajhssr.com
Rahardjo, A. P., & Wuryani, E. (2021). Pengaruh Good Corporate Governance, Kepemilikan Institusional, dan Ukuran Perusahaan Terhadap Kinerja Keuangan Perusahaan (Studi Pada Perusahaan Perbankan Yang Terdaftar Di Bursa Efek Indonesia (BEI) Tahun 2016-2018). AKUNESA: Jurnal Akuntansi Unesa, 10(1). https://journal.unesa.ac.id/index.php/akunesa/
Rosiana, A., & Mahardhika, A. S. (2020). Pengaruh Good Corporate Governance dan Intellectual Capital Terhadap Kinerja Keuangan. Jurnal SIKAP: Sistem Informasi, Keuangan, Auditing Dan Perpajakan, 5(1), 76–89.
Rudiwantoro, A. (2022). PENGARUH INDEPENDENSI DEWAN KOMISARIS, UKURAN DEWAN DIREKSI, KOMITE AUDIT DAN UKURAN PERUSAHAAN TERHADAP KINERJA KEUANGAN. Jurnal Akuntansi Dan Bisnis Indonesia, 3, 41–51.
Ruparelia, R., & Njuguna, A. (2016). Relationship between Board Remuneration and Financial Performance in the Kenyan Financial Services Industry. International Journal of Financial Research, 7(2), 247–255. https://doi.org/10.5430/ijfr.v7n2p247
Sofia, N. L., & Januarti, I. (2022). Influence Of Corporate Governance On Financial Performance Of Companies. Jurnal Akuntansi, 26(3), 374–389. https://doi.org/10.24912/ja.v26i3.973
Titania, H., & Taqwa, S. (2023). Pengaruh Good Corporate Governance terhadap Kinerja Keuangan Perusahaan. JURNAL EKSPLORASI AKUNTANSI, 5(3), 1224–1238. https://doi.org/10.24036/jea.v5i3.795
Tunggal, W. S. P., & Fachrurrozie. (2014). PENGARUH ENVIRONMENTAL PERFORMANCE, ENVIRONMENTAL COST DAN CSR DISCLOSURE TERHADAP FINANCIAL PERFORMANCE. Accounting Analysis Journal, 3(3), 310–320. http://journal.unnes.ac.id/sju/index.php/aaj
Yuliyanti, A., & Cahyonowati, N. (2023). Pengaruh Dewan Direksi, Dewan Komisaris, Komisaris Independen, Komite Audit, Kepemilikan Manajerial, dan Kepemilikan Institusional Terhadap Kinerja Keuangan. Diponegoro Journal of Accounting, 12, 1–14.
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