THE INFLUENCE OF IMPLEMENTING CORPORATE GOVERNANCE PRINCIPLES TOWARDS CORPORATE FINANCIAL PERFORMANCE IN BANKING SECTOR
Abstract: History has recorded
that banking scandals have never ceased to happen. It implies that the urgency
for banking sector to manage banks prudently by implementing good governance
practice. The good government practice is designed to improve bank performance,
protect stakeholder interest, and increase adherence to prescribed regulations,
legislations and also generally accepted ethical values. The implementation of
good corporate governance in long period of time has an impact on bank
performance because good corporate governance principles are the foundation of
banking organizing process. This research aims to test the impact of corporate
governance principle implementation on financial performance of banking sector.
The secondary data were obtained from Indonesian Capital Market Directory
(ICMD) and Annual Report from the Faculty Data Centre. The result shows that
the implementation of corporate governance has positive impact on financial
performance of banking sector as measured by Return on Equity (ROE). This
suggests that in the future, the banking sector should proceed to implement
corporate governance principle especially on disclosing some aspects such as
environment, quality, and standardization.
Author: Karina Krissanti,
Apriani Dorkas Rambu Atahau
Journal Code: jpakuntansigg100034
