Corporate Governance, Intellectual Capital and Firm Performance

Abstract

This paper investigates the impact of corporate governance and intellectual capital on firm performance in Indonesian-listed firms. Using a balanced-panel of 120 Indonesian-listed firms, this study employs a balanced panel method, using non linier IV 2SLS and non linier IV-GMM. All variables, apart from commissioners, directors, education and capital employed efficiency exhibit a non significant impact on Tobins'Q, while all variables are statistically non significant for ROA. The findings are less conclusive than that of previous studies in developed countries. This study provides recent evidence for the corporate governance and intellectual capital in affecting firm peformance of listed-firms in Indonesian Stock Exchange. Though most listed-firms in Indonesia is owned by group or family, the appointment should be strictly complied to the regulations set, as current evidence indicates that independent commissioners and directors have no impact on firm performance, hence an awareness of good corporate governance conduct should be massively disseminated.

Mediating Effect of Intellectual Capital on Corporate Governance and Performance of Conglomerates in Nigeria

“…And this knowledge assets is responsible for the overall performance of these enterprises which guides the organization's positive transformation stages. Basyith (2016) attempted to study the role of IC and CG on the FP. The researcher has mentioned in the paper that after the 1997-1998 crisis the Indonesian government has become strict in making sure that corporate governance has been executed properly.…”

“…In fact, several researchers have unarguably disclosed that firms' financial performance (FP) is significantly improved while interacted with corporate governance (CG) and IC. For instance, (Basyith, 2016;Guo, Shiah-Hou, & Chien, 2012;Kamukama, Ahiauzu, & Ntayi, 2010;Lin, Yu, Wu, & Cheng, 2018;Makki & Lodhi, 2014;Wu, Lee, & Wang, 2012) opined that, present business managers and the prospective ones most come to term that modern business organizations heavily compete in terms of human capital (HC), structural capital (SC), and relational capital (RC) which are commonly referred to as IC in the knowledge economy field (F-Jardón & Susana Martos, 2009). IC donates to relatively subtle and/or concealed assets that serve as a leveraged in firm's value addition which in turn benefits business owners (Fragouli, 2015;Garanina, 2011;Marr, Gray, & Neely, 2003).…”

Committee on board: Does it matter? A study of Indonesian Sharia-listed firms

“…First, many of the audit committee members, in fact, have a relationship, colleague or kinship, with shareholders, commissioners and directors (Marunduri, 2013). Second, the number of audit committee that serves on boardroom as yet meets the standard requirements stipulated on the corporate governance conducts and, in 2015 there are about 10 per cent of listed firms that have only one to two audit committees on board (Basyith, 2016). It can be concluded that the existence of audit committee only meets the standards of the minimum requirements.…”

The Impact of Corporate Governance on Firm Performance: A Case Study of Property, Real Estate and Building Construction’s Listed Firm in the Indonesian Stock Exchange

“…Muchtar and Darari [11] and Fitriya and Basyith [7] stated that nonindependent executive direc-tors influence company performance (ROA). The results of research conducted by Basyith [1] stated that the director was not significant to company per-formance (ROA) while Fitriya and Basyith's research stated that the director had a significant impact on company performance (ROA).…”