The Effect of Corporate Governance on the Financial Performance of Pharmaceutical Sector Companies Listed on the Indonesia Stock Exchange
Keywords:
Corporate Governance; Financial Performance; Pharmacy
Abstract
The purpose of this study was to determine the effect of corporate governance as measured by the Board of Commissionaire (BOC), Audit Committee (AC), Management (MANJ) and Shareholder (SH) on financial performance with the object of the pharmaceutical sector. This type of research is descriptive quantitative. The research population was 12 pharmaceutical sector companies, purposive sampling technique where the criteria were pharmaceutical sector companies that published complete financial reports from 2010-2021 so that the sample used was 108 data. The data used is secondary data with data collection through documentation. Data analysis using multiple linear regression. The results of this study are corporate governance in the dimensions of the Board of Commissionaire and Audit Committee has a significant positive effect on financial performance, corporate governance in the dimensions of Management and Shareholder has an insignificant positive effect on financial performance.
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Bhagat, S., & Bolton, B. (2008). Corporate governance and firm performance. Journal of Corporate Finance, 14(3), 257–273.
Butt, S. A., & Hasan, A. (2009). Impact of ownership structure and corporate governance on capital structure of Pakistani listed companies. International Journal of Business & Management, 4(2).
Chauhan, Y., Rajya Lakshmi, K., & Dey, D. K. (2016). Corporate governance practices, self-dealings, and firm performance: Evidence from India. Journal of Contemporary Accounting & Economics, 12(3), 274–289.
Chtourou, L., S. Marrachi., J. Bedard. (2001). Corporate Governance and Earning Managemen. Available online at www.ssrn.com.
El-Chaarani, H., Abraham, R., & Skaf, Y. (2022). The Impact of Corporate Governance on the Financial Performance of the Banking Sector in the MENA (Middle Eastern and North African) Region: An Immunity Test of Banks for COVID-19. Journal of Risk and Financial Management, 15(2), 82.
Firdaus, A. B. F. S., & Diantimala, Y. (2018). The Influence of Good Corporate Governance and Corporate Social Responsibility towards the Financial Performance that has Implications for Firm Value of Banking Companies Listed in Indonesia Stock Exchange. Nternational Journal of Academic Research in Business and Social Sciences, 8(4), 168–179.
Guest, P. M. (2009). The impact of board size on firm performance: evidence from the UK. The European Journal of Finance, 15(4), 385–404.
Handriani, E., & Robiyanto, R. (2018). Institutional ownership, independent board, board size, and firm performance: Evidence from Indonesia. Contaduría y Administración, 64(3).
Hansen, R., & Mowen, M. (2007). Management accounting, 8 edition. South-Western.
Ibrahim, Q., Rehman, R., & Raoof, A. (2010). Role of corporate governance in firm performance: A comparative study between chemical and pharmaceutical sectors of Pakistan. International Research Journal of Finance and Economics, 50(5), 7–16.
Kasmir. (2016). Analisis Laporan Keuangaan (Cetakan Keduabelas). PT Raja Grafindo Persada.
Kementrian Perindustrian Republik Indonesia. (2019). Transformasi Manufaktur Menuju Industri Maju Laporan Kinerja Kementerian Perindustrian Tahun 2015-2019. Https://Kemenperin.Go.Id/Download/23369.
Klapper, L. F., & Love, I. (2002). Corporate governance, investor protection and performance in emerging markets. Investor Protection and Performance in Emerging Markets (March 2002).
Kusmayadi, D., & Hermansyah, I. (2018). The role of the board commissioners in the implementation of the principles of good corporate governance and the achievement of the performance of bank perkreditan rakyat in tasikmalaya. Jurnal Akuntansi, 22(1), 1-17.
Kyere, M., & Ausloos, M. (2021). Corporate governance and firms financial performance in the United Kingdom. International Journal of Finance & Economics, 26(2), 1871–1885.
Mahrani, M., & Soewarno, N. (2018). The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable. Asian Journal of Accounting Research, 3(1), 41–60.
Menicucci, E., & Paolucci, G. (2016). Factors affecting bank profitability in Europe: An empirical investigation. African Journal of Business Management, 10(17), 410-420.
Ping, Z., & Wing, C. (2011). Corporate Governance: A Summary Review on Different Theory Approaches. International Research Journal of Finance and Economics, (68), 7-13.
Roffia, P., Simón-Moya, V., & Sendra García, J. (2021). Board of director attributes: effects on financial performance in SMEs. International Entrepreneurship and Management Journal, 1-32.
Rose, C. (2007). Can Institutional Investors Fix the Corporate Governance Problem? Some Andish Evidence. Journal of Management and Governance, 11(4), 405-428.
Saidat, Z., Silva, M., & Seaman, C. (2019). The relationship between corporate governance and financial performance. Journal of Family Business Management, 9(1), 54–78.
Samara, G., & Berbegal-Mirabent, J. (2018). Independent directors and family firm performance: does one size fit all?. International Entrepreneurship and Management Journal, 14, 149-172.
Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737-783.
Siregar, M., & Azzahra, K. (2022). THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY, COMPANY SIZE AND CAPITAL INTENSITY ON TAX AVOIDANCE:(Empirical Study on Property and Real Estate Building Construction Sector Companies Listed on the Indonesia Stock Exchange in 2015-2020). JOURNAL OF MANAGEMENT, ACCOUNTING, GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUES, 1(4), 125-142.
Tornyeva, K., & Wereko, T. (2012). Corporate governance and firm performance: Evidence from the insurance sector of Ghana. European Journal of Business and Management, 4(13).
Wahidahwati, W. (2012). The Influence of financial Policies on earnings management, moderated by good corporate governance. EKUITAS (Jurnal Ekonomi and Keuangan), 16(4), 507–521.
Yang, T., & Zhao, S. (2014). CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment. Journal of Banking & Finance, 49, 534–552.
Published
2023-07-06
How to Cite
Suaidah, Y. M., Chandrarin, G., & Zuhroh, D. (2023). The Effect of Corporate Governance on the Financial Performance of Pharmaceutical Sector Companies Listed on the Indonesia Stock Exchange. International Journal of Social Science Research and Review, 6(7), 287-299. https://doi.org/10.47814/ijssrr.v6i7.1493
Section
Main Articles
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