PENGARUH CORPORATE GOVERNANCE TERHADAP KINERJA KEUANGAN PERUSAHAAN PERBANKAN DI INDONESIA

Abstrak

The purpose of this study is to investigate the effect of corporate governance on financial performance. The agency theory is applied to understand the phenomena. The agency theory contended that if a company practice a good corporate governance, the agency cost will be reduced and finally, the company performance improves. This study use company listed in banking sector for period of 2017 to2018. Final sample of this study use company is fourteen company or fourteen company-years. Corporate governance variable is measured by CG index with fifteen items. Meanwhile performance proxy is return on asset (ROA) and return on equity (ROE). However, this study also uses three control variables: company age, company size and company leverage. Multivariate analysis is used to analyses data (panel data analysis). The results show that there is no positive relationship between corporate governance with return on assets and return on equity. It indicates that the implementation of good corporate governance does not affect the financial performance of banking companies listed on the IDX. Therefore, the research phenomena can be explained by agency theory or another word, this study does not contribute to the agency theory.

Keyword: Corporate Governance, Financial Performance