Good Corporate Governance Mechanisms, Company Size, and Company’s Growth on Company's Financial Performance

Abstract

This study aims to determine the effect of independent 
commissioners, board of directors, company size, and company 
growth on the company's financial performance. Financial 
performance is a description of the company's financial condition in 
a certain period of time. Financial performance in this study uses the 
ratio of return on assets. This research uses a purposive sampling 
technique, the number of samples obtained was 31 companies from 
81 property and real estate companies listed on the IDX. Research 
data was obtained from the company’s financial reports for the 2016
2021 period, and the data was analyzed using multiple linear 
regression analysis assisted by the SPSS application. The results of this 
research show that Independent Commissioners, Company Size, and 
Company Growth affect the company's Financial Performance, while 
the Board of Directors has does not affect Financial Performance. The 
greater the proportion of independent commissioners, the higher the 
supervision, meanwhile the number of the board of directors has no 
effect on financial performance, this is because a board of directors 
that is too large cannot function optimally because it will have 
difficulty coordinating. A decline in financial performance can be 
caused by enormous asset maintenance costs and a company's large 
operational scope, a decline or increase in performance seen from 
the company's profits, where profits increase due to sales growth and 
lower costs. This research has implications for stakeholder theory and 
Agency theory, because good corporate governance provides 
benefits to interested parties in the company. In implementing good 
corporate governance, a large number of board of directors also has 
an unfavorable effect because the larger the number of the board of 
directors has an impact on communication and coordination, as well 
as the higher the hierarchy of task implementation within the 
company.