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Does Corporate Governance Affect Market Performance as Well as Fundamental Performance? Evidence from Indonesian Manufacturing Sectors

In: Proceedings of the 20th International Symposium on Management (INSYMA 2023)

Author

Listed:
  • Zunairoh Zunairoh

    (University of Surabaya)

  • Liliana Inggrit Wijaya

    (University of Surabaya)

  • Bertha Silvia Sutejo

    (University of Surabaya)

  • Marwin Antonius Rejeki Silalahi

    (University of Surabaya)

  • Michelle Natasya Gozali

    (University of Surabaya)

Abstract

This research aims to determine corporate governance’s impact on the firm’s financial performance (ROE and Tobin’s Q) in the manufacturing sector listed on the Indonesia Stock Exchange during 2016–2020. This research applied a quantitative approach with a sample of 615 observations from 123 manufacturing sector companies listed on the Indonesia Stock Exchange during 2016–2020. The collected data were then processed using multiple linear analysis models using the Eviews 10 program. The results show that the size of the board of commissioners and nomination and remuneration committee significantly affect the company’s financial performance based on ROE. In contrast, independent commissioners have no significant impact, and the size of the audit committee has a significant negative effect on the company’s financial performance based on ROE. While for the dependent variable Tobin’s Q, the size of board of commissioners, independent commissioners, and nomination and remuneration does not significantly affect the company’s financial performance, but the size of the audit committee has a significant and negative effect on the company performance based on Tobin’s Q.

Suggested Citation

  • Zunairoh Zunairoh & Liliana Inggrit Wijaya & Bertha Silvia Sutejo & Marwin Antonius Rejeki Silalahi & Michelle Natasya Gozali, 2024. "Does Corporate Governance Affect Market Performance as Well as Fundamental Performance? Evidence from Indonesian Manufacturing Sectors," Advances in Economics, Business and Management Research, in: Werner Ria Murhadi & Dudi Anandya & Noviaty Kresna Darmasetiawan & Juliani Dyah Trisnawati & Putu An (ed.), Proceedings of the 20th International Symposium on Management (INSYMA 2023), pages 125-131, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-244-6_22
    DOI: 10.2991/978-94-6463-244-6_22
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