Board governance of publicly listed companies in Indonesia: Towards sound corporate governance implementation

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2 Citations (Scopus)


The importance of corporate governance practice is to ensure investor protection and oversight. Corporate governance is applied not only in public companies but also applied in the ordinary course of business enterprise. This study examined the characteristics of board governance as measured by the independence of the board of commissioners (independent BOD), board size, managerial ownership, board composition, the audit committee, on the implementation of corporate governance as measured through the company's financial performance measured by ROA (Return on Asset), ROE (return on Equity), and PER (Price Earning Ratio). The aim of this study was to obtain an overview of the features of board governance in public companies in Indonesia; particularly in fortifying the role of the board of commissioners in executing corporate governance. The population in this study was all of the non-financial companies listed on the Indonesia Stock Exchange (BEI) during the period from 2005 to 2013. Cross-tab analysis and regression analysis were utilized to analyze the data used in the study. The results of the cross-tab analysis indicate that the number of independent commissioners within a company is positively correlated to the number of commissioners. Furthermore, the results for cross-tab analysis between independent BOD and managerial ownership suggests that the higher the number of independent commissioners, the lower percentage of managerial stockholding in the company. In regression analysis, the variables independent BOD, board size, audit committee and managerial ownership are positively significant to company's performance measured by ROA and ROE. However, all of the previously mentioned variables are not significant to PER. Independent commissioners play a vital role, especially in regard to the financial performance measured with ROA and ROE.

Original languageEnglish
Pages (from-to)3561-3573
Number of pages13
JournalInternational Journal of Applied Business and Economic Research
Issue number6
Publication statusPublished - 2016


  • Board Characteristics
  • Corporate Governance
  • Indonesia Stock Exchange (BEI)
  • PER
  • ROA
  • ROE


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