Jurnal Ekonomi
Vol. 12 No. 04 (2023): Jurnal Ekonomi, 2023

ANALYSIS OF CORPORATE GOVERNANCE IN PREDICTING THE PERFORMANCE OF LQ45 COMPANIES

Frandy Melvin Walean (Faculty of Economics and Business, Universitas Klabat)
Fanny Soewignyo (Faculty of Economics and Business, Universitas Klabat)



Article Info

Publish Date
21 Nov 2023

Abstract

The aim of the research is to analyze the predictive ability of corporate governance on company performance. The research uses a sample of companies listed on the Indonesia Stock Exchange and listed consistently in the LQ 45 index from 2019 to 2021. Five hypotheses are tested using multiple regression analysis. The results of this research show that the greater the number of members of the board of directors, the higher the level of profitability as measured using the company's return on equity. Second, the greater the proportion of independent commissioners on the board of commissioners, the worse the company's performance as measured using return on equity. The results of this research show that a large number of directors has a positive impact on increasing the profitability of LQ45 Company. On the other hand, it was found that the greater number of independent commissioners on the board of commissioners had a negative impact on the company's level of profitability. These results can be of concern to the board of commissioners to pay attention to their role as commissioners. For regulators, determining the number of independent commissioners must be reconsidered if they cannot make a positive contribution to improving the company's performance.

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Journal Info

Abbrev

Ekonomi

Publisher

Subject

Economics, Econometrics & Finance

Description

Jurnal Ekonomi [p. ISSNĀ 2301-6280, e. ISSNĀ 2721-9879] is a peer-reviewed journal published Half times a year (June, and December) by SEAN Institute. Jurnal Ekonomi is intended to be the journal for publishing articles reporting the results of economics research. Jurnal Ekonomi invites manuscripts ...