Open AccessIndependent Board, Audit Committee, Risk Committee, the Meeting Attendance level and Its Impact on the Performance: A Study of Listed Banks in Indonesia
Author(s) -
Te-Kuang Chou,
Agung Dharmawan Buchdadi
Publication year - 2017
Publication title -
international journal of business administration
Language(s) - English
Resource type - Journals
eISSN - 1923-4015
pISSN - 1923-4007
DOI - 10.5430/ijba.v8n3p24
Subject(s) - audit committee , accounting , net interest margin , business , attendance , chief audit executive , annual report , profit margin , corporate governance , profitability index , audit , return on assets , finance , economics , internal audit , joint audit , economic growth
This study determines the effect of good corporate governance on the performance of banks in Indonesia. The variables used are independent board (IB), the annual board meeting (BM), the percentage of annual board of director meeting attendance, the annual board-executive meeting (BEM), the percentage of annual board-executive meeting attendance, audit committee (AC), audit committee meeting (ACM), the percentage of annual audit committee meeting attendance, risk committee (RC), risk committee meeting (RCM), and the percentage of annual risk committee meeting attendance. The analysis technique employed in this study is two-stage least square (2SLS) panel data regression using return on asset (ROA), net interest margin ratio (NIM), and Tobin’s Q as the proxies of bank performance. The data used are listed bank in Indonesia Capital Market between 2013 and 2015. The findings reveal that the independent board has a positive impact on net interest margin among the big scale bank. However, among the small scale bank the independent board of directors has the positive impact on the market value, but they will have the lack of information that could obstruct the accounting based profit of the bank. Moreover, the findings of this study also explain the important role of meeting attendance for the accounting based profitability of the bank. This study also found the critical role of the audit committee in the banking industry.