IDEAS home Printed from https://ideas.repec.org/a/grg/01biss/v5y2012i1p1-17.html
   My bibliography  Save this article

The Influence Of Corporate Governance Practices On The Company’S Financial Performance

Author

Listed:
  • Nuryaman

    () (University of Widyatama, Bandung, Indonesia)

Abstract

The aim of this study is to examine the effect of corporate governance practices on company's financial performance. Corporate governance practices are measured by score of corporate governance perception index (CGPI) issued by the Indonesian Institute of Corporate Governance (IICG). Financial performances in this study include operational performance and the performance of company stock. Operational performance is measured by current ratio (CR), debt to asset (DAR), return on asstes (ROA), net profit margin (NPM), return on equty (ROE). Stock performance is measured by price to book value (PBV). Statistical model used is the regression model. Study sample size was forty-three firms (43 firms), which are all included in the application of corporate governance ranking by IICG in 2007-2009, and are listed on the Indonesia Stock Exchange. The data is taken from the CGPI report and financial statements for the year 2007-2009. The results of this study indicate that the practice of corporate governance has a positive effect on company's operational performance by proxy CR, ROA, ROE and also a positive influence on stock performance by proxy PBV

Suggested Citation

  • Nuryaman, 2012. "The Influence Of Corporate Governance Practices On The Company’S Financial Performance," Journal of Global Business and Economics, Global Research Agency, vol. 5(1), pages 1-17, July.
  • Handle: RePEc:grg:01biss:v:5:y:2012:i:1:p:1-17
    as

    Download full text from publisher

    File URL: http://www.globalresearch.com.my/journal/business_v05n01/001_Article_009_JOGBE_PG001-017.pdf
    Download Restriction: no

    File URL: http://www.globalresearch.com.my/journal/business_v05n01/business_v05n01.htm
    Download Restriction: no

    References listed on IDEAS

    as
    1. Klock, Mark S. & Mansi, Sattar A. & Maxwell, William F., 2005. "Does Corporate Governance Matter to Bondholders?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(04), pages 693-719, December.
    2. Dimitropoulos, Panagiotis E. & Asteriou, Dimitrios, 2010. "The effect of board composition on the informativeness and quality of annual earnings: Empirical evidence from Greece," Research in International Business and Finance, Elsevier, vol. 24(2), pages 190-205, June.
    3. Siregar, Sylvia Veronica & Utama, Sidharta, 2008. "Type of earnings management and the effect of ownership structure, firm size, and corporate-governance practices: Evidence from Indonesia," The International Journal of Accounting, Elsevier, vol. 43(1), pages 1-27, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    corporate governance practices; financial performance;

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:grg:01biss:v:5:y:2012:i:1:p:1-17. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (editor). General contact details of provider: http://www.globalresearch.com.my/journal.htm .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.