The Effect of Corporate Governance on Financial Performance: Evidence from Islamic Banks in Indonesia

DOI

10.2991/aer.k.201221.098How to use a DOI?

Keywords

Corporate Governance, Return on Asset, Economic Value Added

Abstract

This study aims to examine the effect of corporate governance on financial performance of Islamic banking in Indonesia. Corporate governance mechanism determined by board of director, independent commissioner, and sharia supervisory board, meanwhile the financial performance is calculated by using Return on Assets (ROA) and Economic Value Added (EVA). The data were collected from each bank’s annual report in a period 2014-2018, thus 9 Islamic Banks were taken by purposive sampling. The analysis method is path analysis and applied by WarpPLS 6.0 tool. This study reveals that board of director had significant influence to ROA, however independent commissioner and sharia supervisory board had no significant influence to ROA, on the other hand only independent commissioner and ROA had significant influence to EVA. The findings can be a consideration for banking management to control financial performance, by improving good corporate governance therefore the financial performance will increase.

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/).

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TY  - CONF
AU  - Hamas Askar Islami
AU  - Iwan Setiawan
AU  - M Umar Mai
PY  - 2020
DA  - 2020/12/22
TI  - The Effect of Corporate Governance on Financial Performance: Evidence from Islamic Banks in Indonesia
BT  - Proceedings of the International Seminar of Science and Applied Technology (ISSAT 2020)
PB  - Atlantis Press
SP  - 605
EP  - 612
SN  - 2352-5401
UR  - https://doi.org/10.2991/aer.k.201221.098
DO  - 10.2991/aer.k.201221.098
ID  - Islami2020
ER  -