Good Corporate Governance and Financial Performance

Abstract

This study aims to examine the effect of good corporate governance mechanisms on financial performance in manufacturing companies in the consumer goods sub-sector listed on the Indonesia Stock Exchange for the 2019-2021 period. The mechanism of good corporate governance is proxied by Managerial Ownership, Institutional Ownership, and Audit Committees. Financial Performance is proxied by Return On Assets (ROA). Sampling Using the purposive sampling method, samples were obtained from as many as 30 companies. The technical data analysis used in this study is multiple linear regression analysis using the SPSS (Statistical Package for the Social sciences) version 25 assistance program. The results of this study show that institutional ownership and audit committees have a positive and significant effect on financial performance. While managerial ownership does not have a significant effect on financial performance.