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The aim of this research is to understand how Corporate Governance affects investor’s reaction in capital market by profitability as a moderating variable. This research uses secondary data obtained from Indonesian Stock Exchange. Investor’s reaction is measured by Cumulative Abnormal Return, which happened around the time of annual report publication. Corporate Governance are measured by Institutional ownership, ownership by board of commissioner, audite commite, and independent commissioner. Profitability as moderating variabel is measured by Return on Asset. This research was done to 25 companies which were listed in Indeks LQ 45 in Indonesian Stock Exchange during 20152016. Data analysis techniques used in this research are regresion analysis and moderated regresion analysis (MRA). The result shows that corporate governance (Institutional ownership, ownership by board of commissioner, audite commite, and independent commissioner) negatively affect Cumulative Abnormal Return. Profitability as a moderating variable was able to explain the relationship of corporate governance (ownership by board of commissioner and audite commite) affect significantly to Cumulative Abnormal Return partially. Corporate governance does not have any impact to Cumulative Abnormal Return value, because of the implementation of corporate governance in Indonesia is not provide optimum results mean while in the process of considering corporate governance practices take time to know the benefits.

THE EFFECT OF CORPORATE GOVERNANCE DISCLOSURE ON INVESTOR REACTIONS WITH PROFITABILITY AS MODERATING VARIABLE