The Quality of Corporate Governance and Its Effect on Sharia Bank Financial Performance in Indonesia
- DOI
- 10.2991/aebmr.k.200915.045How to use a DOI?
- Keywords
- corporate governance, bank size, bank age, bank leverage, return on equity
- Abstract
The research examines factors that impact financial performance of Islamic Banks. It focuses on the banks listed at Bank Indonesia (BI) and the Financial Services Authority of Indonesia (OJK). The independent variables examined include the efficiency of the Board of Directors, Audit Committee, and Sharia Supervisory Board (SSB), as well as the size, age and equity of the bank. The dependent variable includes the Islamic Bank’s Financial Performance, which is determined using Return on Equity (ROE). Also, the study uses samples of 11 Islamic banks registered at BI and OJK from 2013 to 2017. They were selected using purposive sampling with specific criteria for sample withdrawal and panel data used in processes. The results showed that the Board of Director Effectiveness and Leverage had a significant positive effect on ROE. However, the Audit Committee Effectiveness, Shariah Supervisory Board Effectiveness, Bank Size, Age Bank did not affect ROE. Islamic banks need to pay attention to the factors that influence financial performance, especially the effectiveness of the Board of Directors. This is because their decisions directly contribute to the bank’s performance. For investors, they can see the profits and losses the companies make from year to year through financial statements. They might also determine the quality of corporate governance from the annual reports.
- Copyright
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Susy Muchtar AU - Powell Gian Hartono AU - Wahyuni Rusliyana Sari PY - 2020 DA - 2020/09/15 TI - The Quality of Corporate Governance and Its Effect on Sharia Bank Financial Performance in Indonesia BT - Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020) PB - Atlantis Press SP - 192 EP - 196 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.200915.045 DO - 10.2991/aebmr.k.200915.045 ID - Muchtar2020 ER -