Corporate Governance toward 5.0: Insights from State-Owned Enterprises in Indonesia
How to cite (SHIRKAH) :
Existing research separately examines factors like qualification, tenure, and independence in relation to financial performance, overlooking the potential combined or interactive effects. This research intends to determine the role of the board of directors in addressing future challenges encountered by Indonesian state-owned enterprises. The research methodology involves quantitatively correlating independent and dependent variables, with or without variable control, utilizing nine financial ratios to assess firm conditions. The study utilized secondary data from financial statements and annual disclosures of Indonesian state enterprises from 2009 to 2016. The findings indicated that firstly, the degree, whether with or without control variables, is associated with Return on Asset and Fixed Asset Turnover. Secondly, board tenure, with or without control variables, does not exhibit a correlation with financial performance. Thirdly, the size of the independent board of directors, with control variables, does not correlate with financial performance, whereas without control variables, it is correlated with Net Profit Margin and Cash Ratio. This study introduces a new concept of board performance to predict bankruptcy indicators in companies, considering their Return on Assets (ROA) and Fixed Asset Turnover.
Ali, M. S., & Jalal, H. (2018). Higher education as a predictor of employment: The world of work perspective. Bulletin of Education and Research, 40(2), 79-90. https://files.eric.ed.gov/fulltext/EJ1209685.pdf
Arora, A., & Soni, T. K. (2023). An optimal proportion for independent directors in the boardroom: An empirical study. Business Perspectives and Research, 22785337231170491. https://doi.org/10.1177/22785337231170491
Bhuiyan, M. B. U. (2015). Do problem directors affect firm operating performance?. Asian review of accounting, 23(2), 170-185. http://dx.doi.org/10.1108/ARA-12-2013-0078
Bushman, R., Dai, Z., & Wang, X. (2010). Risk and CEO turnover. Journal of Financial Economics, 96(3), 381-398. http://dx.doi.org/10.1016/j.jfineco.2010.03.001
Call, A. C., Campbell, J. L., Dhaliwal, D. S., & Moon, J. R. (2017). Employee quality and financial reporting outcomes. Journal of Accounting and Economics, 64(1), 123–149. https://doi.org/10.1016/j.jacceco.2017.06.003
Cha, W., & Abebe, M. A. (2016). Board of directors and industry determinants of corporate philanthropy. Leadership & Organization Development Journal, 37(5), 672-688. http://www.emeraldinsight.com/doi/10.1108/LODJ-09-2014-0189.
Chang, J. C., & Sun, H. L. (2016). Reputation and regulation effects on director turnover and change of directorships. Review of Accounting and Finance, 15(3), 274-293.
Darko, J., Aribi, Z. A., & Uzonwanne, G. C. (2016). Corporate governance: The impact of director and board structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock exchange. Corporate Governance, 16(2), 259-277. http://dx.doi.org/10.1108/CG-11-2014-0133
Elms, N., Nicholson, G., & Pugliese, A. (2015). The importance of group-fit in new director selection. Management Decision, 53(6), 1312-1328. http://www.emeraldinsight.com/doi/10.1108/MD-10-2014-0598
Feng, L., Zhang, R., & McCornac, D. (2016). An analysis of restrictive mechanisms on director behavior regarding corporate philanthropy in China. International Journal of Law and Management, 58(3), 246-257. http://dx.doi.org/10.1108/IJLMA-05-2015-0026
Fernandes, C., Farinha, J., Martins, F. V., & Mateus, C. (2016). Supervisory boards, financial crisis and bank performance: Do board characteristics matter? Journal of Banking Regulation, 18(4), 310–337. http://dx.doi.org/10.1057/s41261-016-0037-5
Hajdari, M., Qerimi, F., & Qerimi, A. (2023). Impact of continuing education on employee productivity and financial performance of banks. Emerging Science Journal, 7(4), 1158-1172. https://doi.org/10.28991/ESJ-2023-07-04-09
Ilhan Nas, T., & Kalaycioglu, O. (2016). The effects of the board composition, board size and CEO duality on export performance: Evidence from Turkey. Management Research Review, 39(11), 1374-1409. http://www.emeraldinsight.com/doi/10.1108/MRR-01-2015-0014
Jafar, S., Zubair, D. S. S., & Khan, M. A. (2021). Employee training and financial performance: Mediating effects of perceived service quality and customer satisfaction. Employee Training and Financial Performance: Mediating Effects of Perceived Service Quality and Customer Satisfaction, 14(5), 68-81.
Ji, J., Peng, H., Sun, H., & Xu, H. (2021). Board tenure diversity, culture and firm risk: Cross-country evidence. Journal of International Financial Markets, Institutions and Money, 70, 101276. https://doi.org/10.1016/j.intfin.2020.101276
Jin, C., & Mamatzakis, E. (2018). Board competence and bank performance in China. Economics Bulletin, 38(2), 681–688. https://ideas.repec.org/a/ebl/ecbull/eb-18-00168.html
Knapp, M. S., & Feldman, S. B. (2012). Managing the intersection of internal and external accountability: Challenge for urban school leadership in the United States. Journal of educational administration, 50(5), 666-694. http://dx.doi.org/10.1108/09578231211249862
Lee, S. K., Bosworth, W., & Kudo, F. (2016). Compensation committees: Independence and firm performance. Managerial Finance, 42(1), 23-33. http://www.emeraldinsight.com/doi/10.1108/MF-10-2015-0263.
Mahmood, A. N., Arslan, H. M., Younas, Z. I., Komal, B., Ali, K., & Mubeen, M. (2023). Understanding the dynamics of capital structure, corporate governance, and corporate social responsibility in high-and low-leveraged US and Chinese firms. Environmental Science and Pollution Research, 30(16), 46204-46221. https://doi.org/10.1007/s11356-022-24843-3
Manan, M. A., & Hasnawati, S. (2022). Pengaruh good corporate governance terhadap financial distress yang di kontrol oleh ukuran perusahaan pada perusahaan industri sektor manufaktur di Indonesia. Jurnal Akuntansi, Keuangan, dan Manajemen, 3(4), 279-292. https://doi.org/10.35912/jakman.v3i4.1197
Ombaba, K. B. M., & Kosgey, D. (2018). The relationship between board tenure and financial performance: The allegiance hypothesis. International Journal of Modern Research in Engineering & Management, 1(5), 14-21.
Pérez-Calero, L., Villegas, M. D. M., & Barroso, C. (2016). A framework for board capital. Corporate Governance, 16(3), 452-475. http://dx.doi.org/10.1108/CG-10-2015-0146
Pereira, V., & Filipe, J. (2018). Quality of board members’ training and bank financial performance: Evidence from Portugal. International Journal of Economics and Business Administration, 6(3), 47–79. https://ideas.repec.org/a/ers/ijebaa/vviy2018i3p47-79.html
Rahman, M. M., & Akhter, B. (2021). The impact of investment in human capital on bank performance: evidence from Bangladesh. Future Business Journal, 7, 1-13. https://doi.org/10.1186/s43093-021-00105-5
Sidki, M., Boerger, L., & Boll, D. (2023). The effect of board members’ education and experience on the financial performance of German state-owned enterprises. Journal of Management and Governance, 1-38. https://link.springer.com/article/10.1007/s10997-022-09663-4
Tandiawan, W. (2022). Business perfomance evaluation of a recreation company in Indonesia using balanced scorecard. Jurnal Akuntansi, Keuangan, dan Manajemen, 3(4), 359-373. https://doi.org/10.35912/jakman.v3i4.1453
Torchia, M., & Calabro, A. (2016). Board of directors and financial transparency and disclosure. Evidence from Italy. Corporate Governance, 16(3), 593-608. https://doi.org/10.1108/CG-01-2016-0019
Yasser, Q. R., Mamun, A. A., & Rodrigs, M. (2017). Impact of board structure on firm performance: evidence from an emerging economy. Journal of Asia Business Studies, 11(2), 210-228. http://dx.doi.org/10.1108/JABS-06-2015-0067
Copyright
Copyright aims to protect the specific way the article has been written to describe an experiment and the results. Shirkah: Journal of Economics and Business is committed to its authors to protect and defend their work and their reputation and takes allegations of infringement, plagiarism, ethical disputes, and fraud very seriously. Automotive Experiences is published under the terms of the Attribution-NonCommercial 4.0 International (CC BY-NC 4.0). Authors retain copyright and grant the journal right of first publication (online and print) with the work simultaneously. We use the restrictive license (non-commercial) as follows:
BY (attribution): Users are allowed to share, distribute and redistribute the published article in any medium or format, with an identification of the authors and its initial publication in this journal. Authors are encouraged to post and distribute their articles immediately after publication (e.g., institutional or public repositories, personal websites). Authors are allowed to enter into additional contractual arrangements for the non-exclusive distribution of the published and an acknowledgment of its initial publication in this journal.
NC (non-commercial): Users are not allowed to use the article commercially without the permission of the authors. Authors agree explicitly that the published article is indexed worldwide in databases, repositories and indexation services, even if these services operate on a commercial basis. Authors grant Shirkah: Journal of Economics and Business explicit the right to include the published articles in databases, repositories and indexation services. License
License to Publish
The non-commercial use of the article will be governed by the Attribution-NonCommercial 4.0 International (CC BY-NC 4.0). The author hereby grants Shirkah: Journal of Economics and Business an exclusive publishing and distribution license in the manuscript include tables, illustrations or other material submitted for publication as part of the manuscript (the “Articleâ€) in print, electronic and all other media (whether now known or later developed), in any form, in all languages, throughout the world, for the full term of copyright, and the right to license others to do the same, effective when the article is accepted for publication. This license includes the right to enforce the rights granted hereunder against third parties.
Author's Warranties
The author warrants that the article is original, written by stated author/s, has not been published before, contains no unlawful statements, does not infringe the rights of others, is subject to copyright that is vested exclusively in the author and free of any third party rights, and that any necessary written permissions to quote from other sources have been obtained by the author(s).
User Rights
Under the Creative Commons Attribution-Non Commercial 4.0 International (CC BY-NC 4.0) license, the author(s) and users are free to share (copy and redistribute the material in any medium or format) and adapt (remix, transform, and build upon the material). Users must give appropriate credit, provide a link to the license, and indicate if changes were made.
Rights of Authors
Authors retain the following rights:
- Copyright, and other proprietary rights relating to the article, such as patent rights,
- The right to use the substance of the article in future own works, including lectures and books,
- The right to reproduce the article for own purposes, provided the copies are not offered for sale, and
- The right to self-archive the article.
Co-Authorship
If the article was prepared jointly with other authors, the signatory of this form warrants that he/she has been authorized by all co-authors to sign this agreement on their behalf, and agrees to inform his/her co-authors of the terms of this agreement.
Royalties
This agreement entitles the author to no royalties or other fees. To such extent as legally permissible, the author waives his or her right to collect royalties relative to the article in respect of any use of the article by Shirkah: Journal of Economics and Business or its sublicensee.
Miscellaneous
Shirkah: Journal of Economics and Business will publish the article (or have it published) in the Journal if the article’s editorial process is successfully completed and Shirkah: Journal of Economics and Business or its sublicensee has become obligated to have the article published. Shirkah: Journal of Economics and Business may conform the article to a style of punctuation, spelling, capitalization, and usage that it deems appropriate.