The Influence of Corporate Governance on Financial Performance With Bank Risk Taking As a Moderating Variable
DOI:
https://doi.org/10.55606/ijemr.v3i3.533Keywords:
Bank, Corporate Governance, Decision-making Risk, IndonesiaAbstract
This study aims to examine the effect of CEO power, foreign ownership, independence, and voting rights on financial performance in banks with risk-taking as a moderating variable after the financial crisis in 2007-2008. The method used is quantitative using secondary data. The research data source uses the financial statements of Indonesian companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2022. Sample collection used a purposive sampling approach. Data was obtained from the company’s financial reports on IDX and official websites. Data analysis uses panel data regression. The author found that CEO power, independence, and bank risk taking had a significant negative effect on the financial performance of banks, while foreign ownership and voting rights did not have an effect on financial performance of banks. This study contributes to the literature on bank governance and risk-taking. The purpose of this empirical analysis is to examine in detail the subject and the dynamics among these variables in the macroeconomic environment of the financial system, particularly with regard to the regulatory and supervisory framework after the financial crisis in 2007-2008.References
[1] A. Gennaro and M. Nietlispach, “Corporate Governance and Risk Management: Lessons (Not) Learnt from the Financial Crisis,” Journal of Risk and Financial Management, vol. 14, no. 9, pp. 0–19, 2021, doi: 10.3390/jrfm14090419.
[2] Suherman, M. Ris Pripamuji Prasetyo, and A. Dharmawan Buchdadi, “Apakah Karakteristik CEO Penting untuk Kinerja Perusahaan? Bukti Dari Perusahaan Food and Beverage di Indonesia, Malaysia dan Singapura,” Sarjana thesis, UNIVERSITAS NEGERI JAKARTA, 2021.
[3] X. Cao, J. Im, and I. Syed, A Meta-Analysis of the Relationship Between Chief Executive Officer Tenure and Firm Financial Performance: The Moderating Effects of Chief Executive Officer Pay and Board Monitoring, vol. 46, no. 3. 2021. doi: 10.1177/1059601121989575.
[4] S. Alifah and P. Harto, “The Effect of CEO Power on Firm Performance Moderated by Corporate Social Responsibility (CSR) Disclosure (Empirical Evidence in Manufacturing Companies Listed on Indonesia Stock Exchange (IDX) For Period 2018-2020),” Diponegoro Journal of Accounting, vol. 11, no. 1, pp. 1–15, 2021, [Online]. Available: http://ejournal-s1.undip.ac.id/index.php/accounting
[5] S. Allgood and K. A. Farrell, “The effect of ceo tenure on the relation between firm performance and turnover,” Journal of Financial Research, vol. 23, no. 3, pp. 373–390, 2000, doi: 10.1111/j.1475-6803.2000.tb00748.x.
[6] A. Siregar and K. Khomsiyah, “the Effect of Ceo Characteristics and Carbon Emission Disclosure on Firm Performance With Business Ethics Disclosure As a Moderating Variable,” Assets: Jurnal Akuntansi dan Pendidikan, vol. 12, no. 1, p. 25, 2023, doi: 10.25273/jap.v12i1.12177.
[7] M. T. Ngo, T. N. Le, N. T. Nguyen, and T. T. T. Luu, “Board Independence and Financial Performance: Empirical Evidence on Mediating Role of Market Competition From the Vietnamese Market,” International Journal of Professional Business Review, vol. 8, no. 5, p. e01498, 2023, doi: 10.26668/businessreview/2023.v8i5.1498.
[8] R. Sari, “Pengaruh Kepemilikan Asing Dan Leverage Terhadap Kinerja Keuangan,” Balance : Jurnal Akuntansi Dan Bisnis, vol. 5, no. 1, p. 64, 2020, doi: 10.32502/jab.v5i1.2459.
[9] B. Al-Gamrh, R. Al-Dhamari, A. Jalan, and A. Afshar Jahanshahi, “The impact of board independence and foreign ownership on financial and social performance of firms: evidence from the UAE,” Journal of Applied Accounting Research, vol. 21, no. 2, pp. 201–229, 2020, doi: 10.1108/JAAR-09-2018-0147.
[10] M. Carney, S. Estrin, Z. Liang, and D. Shapiro, “National institutional systems, foreign ownership and firm performance: The case of understudied countries,” Journal of World Business, vol. 54, no. 4, pp. 244–257, 2019, doi: 10.1016/j.jwb.2018.03.003.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 International Journal of Economics and Management Research
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
