THE INFLUENCE OF CORPORATE GOVERNANCE PRACTICES TOWARDS FIRM’S FINANCIAL PERFORMANCE

Abstract

This research aims to investigate the effect of corporate governance towards company’s financial performance. The sample used are secondary data obtained from the annual report of property and real estate companies listed in Indonesia Stock Exchange during the period of 2010-2017. Independent variables used in this research are; institutional ownership, independent commissioner, board size, audit committee and Gross Profit Margin (GPM). Return on Assets (ROA) ratio was used as the dependent variable. The hypotheses were tested using multiple linear regression. Institutional ownership, independent commissioner, board size, audit committee and Gross Profit Margin has simultaneously affected ROA. Partially, board size, audit committee and Gross Profit Margin have positive and significant influence towards ROA. Meanwhile, independent commissioner and institutional ownership did not affect ROA significantly.