Effect of Proportion of Independent Board of Commissioners, Audit Committee, and Managerial Ownership on Financial Performance of Banking Companies Listed on Indonesia Stock Exchange

Abstract

The purpose of this study is to find empirical evidence of the influence of the proportion of independent board of commissioners, audit committee, and managerial ownership on the financial performance of banking companies listed on the Indonesia Stock Exchange. The population used in this study is all banks listed on the Indonesia Stock Exchange in the period 2012-2015 consisting of 42 banks. The sample that meets the criteria there are 29 banks. The observation period is 4 years and the number of observations made is 116 (4 years x 29 banks).Based on the determination coefficient test it appears that 24.9% of financial performance is explained by the proportion of independent board of commissioners, audit committee, and managerial ownership, while the remaining 75.1% is influenced by other factors outside the model. The statistical results with the F-test yielded a value of F-counted of 12.386 with a significance level of 0.000. Thus, the regression model can be used to predict the company's financial performance. The t-test results show that the variables of the proportion of independent board of commissioners, audit committee, and managerial ownership have a positive and significant effect on the financial performance of banking companies listed on the Indonesia Stock Exchange.