Board Characteristics and Financial Performance of Companies from the Agency Theory Perspective
DOI:
https://doi.org/10.57185/joss.v3i2.292Keywords:
Firm Financial Performance, Director Size, Frequency of Director Meeting, Female Director, Independent CommissionerAbstract
This study aims to examine the director size, frequency of director meeting, female director, and independent commissioner on the firm financial performance. The population in this study are companies listed in the LQ45 index for the 2017-2020 period. In this study, purposive sampling selected 27 companies as a sample, with the number of observations as many as 108 observations. This study uses an analytical method that analyzes regression with a fixed-effect model approach and hypothesis testing. The results show that director size positively and significantly affected the firm financial performance. The female director negatively and significantly affected the firm financial performance, the frequency of director meeting and independent commissioner has no significant negative effect on the company's financial performance, while leverage and growth as control variables has no significant positive effect on the firm financial performance. Investors are advised to pay more attention to factors such as director size and female directors to be taken into consideration before investing. This study suggests that future researchers can use other proxies in measuring the firm financial performance, both from a financial perspective such as ROE and a market value perspective such as Tobin's Q. Further researchers are also advised to examine other factors related to the board characteristics.
References
Adams, R. B., & Ferreira, D. (2009). Women in the Boardroom and Impact on Governance and Performance. Journal of Financial Economics, 94(2), 291–309. Doi:10.1016/j.jfineco.2008.10.007
Agustina, D., & Ardiansari, A. (2018). Pengaruh Good Corporate Governance terhadap Kinerja Keuangan Perusahaan. Management Analysis Journal.
Ahmad, M., Raja Kamaruzaman, R. N. S., Hamdan, H., & Annuar, H. A. (2019). Women Directors and Firm Performance: Malaysian Evidence Post Policy Announcement. Journal of Economic and Administrative Sciences, 36(2), 96–109. Doi:10.1108/jeas-04-2017-0022
Ahmadi, A., Nakaa, N., & Bouri, A. (2018). Chief Executive Officer Attributes, Board Structures, Gender Diversity and Firm Performance French CAC 40 Listed Firms. Research in International Business and Finance, 44(December 2016), 218–226. Doi:10.1016/j.ribaf.2017.07.083
Al-Amin, N., & Rosyadi, S. (2018). Corporate Governance dan Kinerja Keuangan pada BUMN yang Terdaftar di BEI. Journal of Management and Business, 1(2), 151–164.
Al-Matari, E. M. (2020). Do Characteristics of the Board of Directors and Top Executives an Effect on Corporate Performance the Financial Sector? Evidence Using Stock. Corporate Governance (Bingley), 20(1), 16–43. Doi:10.1108/CG-11-2018-0358
Al Farooque, O., Buachoom, W., & Sun, L. (2020). Board, Audit Committee, Ownership and Financial Performance – Emerging Trends from Thailand. Pacific Accounting Review, 32(1), 54–81. Doi:10.1108/PAR-10-2018-0079
Apriliani, M. T., & Dewayanto, T. (2018). Pengaruh Tata Kelola Perusahaan dan Ukuran Perusahaan terhadap Kinerja Keuangan Perusahaan. Diponegoro Journal of Accounting, 7(1), 1–10.
Assenga, M. P., Aly, D., & Hussainey, K. (2018). The Impact of Board Characteristics on the Financial Performance of Tanzanian Firms. Corporate Governance (Bingley), 18(6), 1089–1106. Doi:10.1108/CG-09-2016-0174
Azis, A., & Hartono, U. (2017). Pengaruh Good Corporate Governance, Struktur Modal, dan Leverage terhadap Kinerja Keuangan Perusahaan pada Sektor Pertambangan yang Terdaftar di Bursa Efek Indonesia Tahun 2011-2015. Jurnal Ilmu Manajemen, 5(3), 1–13.
Brahma, S., Nwafor, C., & Boateng, A. (2020). Board Gender Diversity and Firm Performance?: The UK Evidence. International Journal of Finance & Economics by John Wiley & Sons Ltd., 26(4), 1–16. Doi:10.1002/ijfe.2089
Buchdadi, A. D., Ulupui, I. G. K. A., Dalimunthe, S., Pamungkas, B. G., & Fauziyyah, Y. (2019). Board of Director Meeting and Firm Performance. Academy of Accounting and Financial Studies Journal, 23(2), 1–7.
Devilia, & Prasetyo, A. B. (2021). Pengaruh Corporate Governance terhadap Kinerja Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia. Diponegoro Journal of Accounting, 10(2). Doi:10.25105/jmpj.v6i0.511
Duppati, G. R., Scrimgeour, F., & Sune, A. (2019). Relevance of Corporate Boards in Driving Performance in the Period Covers Financial Crisis. Corporate Governance (Bingley), 19(2), 321–338. Doi:10.1108/CG-11-2016-0204
Ghozali, I., & Ratmono, D. (2013). Analisis Multivariat dan Ekonometrika: Teori, Konsep, dan Aplikasi dengan Eviews 8. Semarang: Badan Penerbit Universitas Diponegoro.
Ghozali, I., & Ratmono, D. (2017). Analisis Multivariat dan Ekonometrika: Teori, Konsep, dan Aplikasi dengan Eviews 10. Semarang: Badan Penerbit Universitas Diponegoro.
Gulzar, I., Haque, S. M. I., & Khan, T. (2020). Corporate Governance and Firm Performance in Indian Textile Companies: Evidence from NSE 500. Indian Journal of Corporate Governance, 13(2), 210–226. Doi:10.1177/0974686220966809
Hadiprajitno, P. B., & Krisnauli. (2014). Pengaruh Mekanisme Tata Kelola Perusahaan dan Struktur Kepemilikan terhadap Agency Cost (Studi Empiris pada Perusahaan Manufaktur yang terdaftar di BEI Tahun 2010-2012). Diponegoro Journal of Accounting, 3(2), 1–13.
Hansen. (2017). Pengaruh Good Corporate Governance dan Return on Asset terhadap Nilai Perusahaan pada Sub Sektor Makanan dan Minuman yang Terdaftar di BEI. Jurnal FinAcc, 2(1), 200–213.
Indonesia Stock Exchange. (2022).
Iswadi. (2016). Kinerja Perusahaan Berkaitan dengan Diversitas Gender dalam Dewan Direksi. Jurnal Ekonomi dan Bisnis, 16(01), 1–5.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3. Doi:10.1016/0304-405X(76)90026-X
Kakanda, M. M., Salim, B., & Chandren, S. (2016). Review of the Relationship between Board Attributes and Firm Performance. Asian Journal of Finance & Accounting, 8(1), 168. Doi:10.5296/ajfa.v8i1.9319
Kao, M. F., Hodgkinson, L., & Jaafar, A. (2018). Ownership Structure, Board of Directors and Firm Performance: Evidence from Taiwan. Corporate Governance (Bingley), 19(1), 189–216. Doi:10.1108/CG-04-2018-0144
Kiptoo, I. K., Kariuki, S. N., & Ocharo, K. N. (2021). Corporate Governance and Financial Performance of Insurance Firms in Kenya. Cogent Business and Management, 8(1). Doi:10.1080/23311975.2021.1938350
Kumalasari, E., & Wijayanto, A. (2020). The Role of Capital Structure Mediation on the Relationship the Corporate Governance and Firm Performance. Management Analysis Journal, 1–24.
Lestari, R. A., & Putri, V. W. (2021). Gender Diversity, Board Composition, Intellectual Capital and Effect on Firm Performance. Management Analysis Journal, 4(1). Doi:10.15294/maj.v10i1.45522
Maftukhah, I. (2013). Kepemilikan Manajerial, Kepemilikan Institusional, dan Kinerja Keuangan sebagai Penentu Struktur Modal Perusahaan. Jurnal Dinamika Manajemen, 4(1), 69–81. Doi:10.15294/jdm.v4i1
Mahardika, E. P., & Riyadi, S. (2018). Pengaruh Intellectual Capital dan Good Corporate Governance terhadap Profitabilitas Bank BUMN. Perbanas Review, 3(1).
Malik, M. S., & Makhdoom, D. D. (2016). Does Corporate Governance Beget Firm Performance in Fortune Global 500 Companies? Corporate Governance (Bingley), 16(4), 747–764. Doi:10.1108/CG-12-2015-0156
Manmeet Kaur & Madhu Vij. (2017). Board Characteristics and Firm Performance: Evidence from Banking Industry in India. Asian Journal of Accounting and Governance, 8(1), 39–53. Doi:10.17576/AJAG-2017-08-04
Manurung, Y. C. M., Tjitrohartoko, F., & Yulius Jogi Christiawan. (2020). Proporsi Dewan Direksi Wanita dan Pengaruhnya terhadap Profitabilitas Perusahaan Sektor Jasa. Business Accounting Review, 8(2), 195-214.
Mardiyati, U. (2016). Pengaruh Frekuensi Rapat Dewan Direktur dan Jumlah Direktur Perempuan terhadap Kinerja Perbankan. EKUITAS (Jurnal Ekonomi dan Keuangan), 20(2), 172–187. Doi:10.24034/j25485024.y2016.v20.i2.51
Masitoh, N. S., & Hidayah, N. (2018). Pengaruh Penerapan Good Corporate Governance terhadap Kinerja Perusahaan (Studi Empirik pada Perusahaan Perbankan di BEI Tahun 2014 – 2016). TEKUN: Jurnal Telaah Akuntansi dan Bisnis, 9(1), 49–59. Doi:10.22441/tekun.v8i1.2596
Maulana, I. (2020). Analisis Pengaruh Dewan Komisaris Independen, Kepemilikan Manajerial dan Kepemilikan Institusional terhadap Kinerja Perusahaan Jasa Keuangan di Indonesia. Jurnal REKSA: Rekayasa Keuangan, Syariah dan Audit, 7(1), 11. Doi:10.12928/j.reksa.v7i1.2455
Meidiawati, K., & Mildawati, T. (2016). Pengaruh Size, Growth, Profitabilitas, Struktur Modal, Kebijakan Dividen terhadap Nilai Perusahaan. Jurnal Ilmu dan Riset Akuntansi, 5(2), 1–16
Mulyadi, R. (2016). Pengaruh Corporate Governance terhadap Kinerja Keuangan. Jurnal Akuntansi, 3(1), 59–74. Doi:10.4324/9781315832661
Oktavianto, Y. (2014). Penerapan Good Corporate Governance Untuk Meningkatkan Kinerja Perusahaan (Studi Pada PT. HM Sampoerna,Tbk yang Listing di BEI Periode 2010-2012). Jurnal Administrasi Bisnis S1 Universitas Brawijaya, 9(2), 81680.
Pahlawan, D., Purnomo, H., & Murniati, W. (2018). Analisis Pengaruh Penerapan Good Corporate Governance terhadap Kinerja Perusahaan (Studi pada Perusahaan Manufaktur yang terdaftar di BEI Periode 2014-2016). Jurnal Riset Akuntansi, 1(1), 68–77.
Palaniappan, G. (2017). Determinants of Corporate Financial Performance Relating to Board Characteristics of Corporate Governance in Indian Manufacturing Industry: An Empirical Study. European Journal of Management and Business Economics, 26(1), 67–85. Doi:10.1108/EJMBE-07-2017-005
Papangkorn, S., Chatjuthamard, P., Jiraporn, P., & Chueykamhang, S. (2021). Female Directors and Firm Performance: Evidence from the Great Recession. International Review of Finance, 21(2), 598–610. Doi:10.1111/irfi.12275
Peraturan Otoritas Jasa Keuangan Nomor 33/ POJK.04/2014 Pasal 2 ayat 1 tentang Direksi dan Dewan Komisaris Emiten atau Perusahaan Publik
Prasetio, E., & Rinova, R. (2021). Pengaruh Corporate Governance terhadap Kinerja Keuangan Perusahaan Sektor Trade, Service and Investment. Jurnal Disrupsi Bisnis, 4(2), 129. Doi:10.32493/drb.v4i2.9433
Priatna, H. (2016). Pengukuran Kinerja Perusahaan dengan Rasio Profitabilitas. Jurnal Ilmiah Akuntansi, 7(2), 44–53. http://ejournal.unibba.ac.id/index.php/AKURAT
Puni, A., & Anlesinya, A. (2020). Corporate Governance Mechanisms and Firm Performance in a Developing Country. International Journal of Law and Management, 62(2), 147–169. Doi:10.1108/IJLMA-03-2019-0076
Putri, R. K., & Muid, D. (2017). Pengaruh Good Corporate Governance terhadap Kinerja Perusahaan. Jurnal ASET (Akuntansi Riset), 6(3), 1–9.
Queiri, A., Madbouly, A., Reyad, S., & Dwaikat, N. (2021). Corporate Governance, Ownership Structure and Firms’ Financial Performance: Insights Muscat Securities Market (MSM30). Journal of Financial Reporting and Accounting, 19(4), 640–665. Doi:10.1108/JFRA-05-2020-0130
Rahadi, F., & Octavera, S. (2020). Pengaruh Frekuensi Rapat dan Partisipasi Dewan Direksi terhadap Nilai Perusahaan. Jurnal Ekonomi dan Bisnis Dharma Andalas, 22(1), 63–72.
Ratnaningsih, R., & Alawiyah, T. (2018). Analisis Kinerja Keuangan dengan Menggunakan Rasio Profitabilitas dan Rasio Aktivitas pada PT Bata Tbk. JIMFE (Jurnal Ilmiah Manajemen Fakultas Ekonomi), 3(2), 14–27. Doi:10.34203/jimfe.v3i2.643
Roudaki, J. (2018). Corporate Governance Structures and Firm Performance in Large Agriculture Companies in New Zealand. Corporate Governance (Bingley), 18(5), 987–1006. Doi:10.1108/CG-07-2018-0241
Sandy, F. N., Mawardi, W., & Mas’ud, F. (2020). Analisis Pengaruh Tingkat Kehadiran Rapat, Ukuran Komite Audit, Reputasi Audit, Konsentrasi Kepemilikan dan Kepemilikan Manajerial terhadap Nilai Perusahaan dengan Ukuran Perusahaan dan Leverage sebagai Variabel Kontrol (Studi Empiris pada Perusahaan yang Terdaftar dalam Index LQ45 di BEI Periode 2014-2018). Diponegoro Journal of Economics, 9, 105–122.
Saputri, B. E., & Khoiruddin, M. (2019). Kinerja Keuangan Perusahaan yang Terdaftar di Jakarta Islamic Index Periode 2014-2017. Management Analysis Journal, 1–18.
Setyawati, I., & Amelia, R. (2018). The Role of Current Ratio, Operating Cash Flow and Inflation Rate in Predicting Financial Distress: Indonesia Stock Exchange. Jurnal Dinamika Manajemen, 9(2), 140–148. Doi:10.15294/jdm.v9i2.14195
Shettima, U., & Dzolkarnaini, N. (2018). Board Characteristics and Microfinance Institutions’ Performance: Panel Data Evidence from Nigeria. Journal of Accounting in Emerging Economies, 8(3), 369–386. Doi:10.1108/JAEE-01-2017-0006
Sitompul, H. F., & Muslih, M. (2020). Pengaruh Tata Kelola Perusahaan, Remunerasi Direksi, dan Ukuran Perusahaan terhadap Kinerja Perusahaan dimoderasi oleh Komite Audit pada Bumn Bidang Keuangan Non Publik. Jurnal Kewirausahaan, Akuntansi, dan Manajemen Tri Bisnis, 2(2), 141–159.
Situmorang, C. V., & Simanjuntak, A. (2019). Pengaruh Good Corporate Governance terhadap Kinerja Keuangan Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia. Jurnal Akuntansi dan Bisnis?: Jurnal Program Studi Akuntansi, 5(2), 160. Doi:10.31289/jab.v5i2.2694
Sobhan, R. (2021). Board Characteristics and Firm Performance: Evidence from the Listed Non-Banking Financial Institutions of Bangladesh. International Journal of Management, Accounting & Economics, 8(1), 25–41. Doi:10.5281/zenodo.4589504
Suaidah, Y. M., & Setyoningrum, O. A. (2021). Kinerja Keuangan dan Mekanisme Good Corporate Governance pada Perusahaan Farmasi. JAD: Jurnal Riset Akuntansi dan Keuangan Dewantara, 4(2), 95–104.
Sukandar, P. P., & Rahardja. (2014). Pengaruh Ukuran Dewan Direksi dan Dewan Komisaris serta Ukuran Perusahaan terhadap Kinerja Keuangan Perusahaan (Studi Empiris pada Perusahaan Manufaktur Sektor Consumer Good yang Terdaftar di BEI Tahun 2010-2012). Diponegoro Journal of Accounting, 3(3), 1–7. http://ejournal-s1.undip.ac.id/index.php/accounting%0AVolume
Ting, I. W. K., Wang, W. K., Lu, W. M., & Chen, Y. J. (2021). Do Female Directors Impact on Corporate Performance? Review of Managerial Science, 15(3), 611–631. Doi:10.1007/s11846-019-00351-6
Vu, M. C., Phan, T. T., & Le, N. T. (2018). Relationship Board Ownership Structure and Firm Financial Performance in Transitional Economy: The Case of Vietnam. Research in International Business and Finance, 45, 512–528. Doi:10.1016/j.ribaf.2017.09.002
Wardoyo, & Veronica, T. M. (2013). Pengaruh Good Corporate Governance, Corporate Social Responsibility & Kinerja Keuangan terhadap Nilai Perusahaan. Jurnal Dinamika Manajemen, 4(2), 132–149. Doi:10.15294/jdm.v4i2
Wicaksana, K. A. B. (2010). Dampak Diversitas Kebangsaan Anggota Dewan Komisaris dan Direksi pada Kinerja Pasar Perusahaan. Jurnal Dinamika Manajemen, 1(2), 137–143. http://journal.unnes.ac.id/nju/index.php/jdm
Wicaksono, A., & Ardiansari, A. (2018). Pengaruh Good Corporate Governance terhadap Profitabilitas Perusahaan. Management Analysis Journal, 1–15.
Wijayanti, S., & Mutmainah, S. (2012). Pengaruh Penerapan Corporate Governance Perbankan yang Terdaftar di Bursa Efek Indonesia. Diponegoro Journal of Accounting, 1(2), 1–15.
Wijayanto, A. (2010). Analisis Pengaruh ROA, EPS, Financial Leverage, Proceed terhadap Initial Return. Jurnal Dinamika Manajemen, 1(1), 68–78. http://journal.unnes.ac.id/nju/index.php/jdm
Wulansari, R., & Irwanto, A. (2018). Pengaruh Good Corporate Governance terhadap Profitabilitas. Jurnal Ekonomi dan Bisnis Airlangga, 28(1), 57–73. Doi:10.20473/jeba.V28I12018.5815
Yakob, N. A., & Hasan, N. A. (2021). Exploring the Interaction Effects of Board Meetings on Information Disclosure and Financial Performance in Public Listed Companies. Economies, 9(4). Doi:10.3390/economies9040139
Yopie, S., & Andriani, E. (2021). Analisis Pengaruh Karakteristik Dewan Direksi dan Struktur Kepemilikan terhadap Kinerja Keuangan Perusahaan Keluarga. Jesya (Jurnal Ekonomi & Ekonomi Syariah), 4(2), 1137–1146. Doi:10.36778/jesya.v4i2.469
Yopie, S., Supriyanto, S., & Chandra, B. (2018). Peran Struktur Dewan dalam Mempengaruhi Kinerja pada Nilai Perusahaan Keluarga. Jesya (Jurnal Ekonomi & Ekonomi Syariah), 2(1), 45–53. Doi:10.36778/jesya.v2i1.36
Yulianto, A. (2013). Keputusan Struktur Modal dan Kebijakan Dividen sebagai Mekanisme Mengurangi Masalah Keagenan. Jurnal Dinamika Manajemen, 4(2), 161–179.
Published
Issue
Section
License
Copyright (c) 2024 Lukman, Siti Ridloah, Hanina Humaira
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International. that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.