The time horizon of corporate governance effect on firm performance: a study of Indonesia financial industry firms

Abstract

Corporate governance is still an important issue today because poor governance can be the cause of business failure. Therefore, good governance is needed to maintain business sustainability. This study aims to examine and analyze the effect of corporate governance, namely the board of commissioners, audit committee, and risk monitoring committee on the company's current and long-term performance. In addition, the corporate secretary is added as a variable that moderates the influence of the board of commissioners on firm performance. The object of research is financial firms listed on the IDX in 2017-2020. This study found that a qualified corporate secretary can positively moderate the proportion of independent commissioners on the company's current and long-term performance. Audit committee qualifications have a significant positive effect on current and long-term performance. The meeting of the risk monitoring committee has no effect on the firm's performance for the current year but has a significant positive effect on the firm's long-term performance. Considering these results, this study suggests that companies should implement good governance today because it has an impact on firm performance in the future.

Determinan Nilai Perusahaan LQ 45 dengan Ukuran Perusahaan sebagai Pemoderasi

“…Komite audit merupakan organ perusahaan yang berfungsi untuk mengawasi jalannya operasional perusahaan, dan memastikan adanya efektivitas dan efisiensi dalam mencapai tujuan perusahaan. Hal ini akan meminimalkan konflik agensi antar pihak principal dan agent, sehingga dapat mendorong peningkatan kepercayaan investor dan nilai perusahaan (Fajriah & Jumady, 2022;Gasperz et al, 2022;Indriastuti & Kartika, 2021;Kamaliah, 2020;Oktaviana et al, 2021;Rahayu & Feliana, 2022;Syura et al, 2020). Hasil penelitian (Onasis & Robin, 2016) menunjukkan rapat komite audit berpengaruh positif terhadap nilai perusahaan.…”

“…Hal ini dapat dikarenakan adanya pengawasan yang berlebihan justru akan mengganggu kinerja dan keleluasaan manajemen dalam mengelola perusahaan. Tingkat rapat yang terlalu banyak, justru akan menjadi penghambat pengambilan keputusan karena dapat muncul banyak perbedaan pendapatan saat rapat berlangsung (Rahayu & Feliana, 2022). Pengambilan keputusan yang terhambat menyebabkan manajemen terbatas dalam mengambil tindakan, sehingga hal ini tidak menjadi sinyal yang baik bagi investor.…”