The Influence of Corporate Governance on Company’s Financial Performance using Firm Size as Control Variable (Empirical Study on Regionally Owned Enterprises (BUMD) in Indonesia)

Abstract

This study aims to determine the effect of corporate governance on financial performance. This type of research is an empirical study conducted on regionally owned enterprises (BUMD) in Indonesia. The samples for this study were 38 regionally owned enterprises that published annual reports for the period 2019-2022. The method used in collecting the data was purposive sampling. This research used a regression analysis test. The results of this study indicate that the board of directors and leverage positively affect financial performance. At the same time, institutional ownership and audit committees have no positive effect on financial performance. Based on the research above, the board of directors and leverage have a very significant contribution to financial performance. Therefore, it is necessary to make efforts to maintain the quality of the board of directors and optimize the use of borrowed funds so that the companies can maintain the stability of financial performance.