The Effectiveness of Good Corporate Governance Implementation against Financial Distress Conditions with Intellectual Capital as Moderating Variable

Abstract

Aims: This study aims to examine the effect of the implementation of good corporate governance on financial distress and examine the influence of Intellectual Capital as a moderating variable that can weaken or strengthen good corporate governance on financial distress. This research is expected to be used as a material for consideration in making company decisions as well as interested parties to be able to take preventive steps in dealing with severe conditions.
 Study Design: The method used is quantitative research with secondary data taken from the company's financial statements with data collection techniques using purposive sampling.
 Place and Duration of Study: This study uses property companies listed on the Indonesia Stock Exchange during 2017-2020 as research objects. The number of samples is 90 samples using purposive sampling method.
 Methodology: The data analysis method in this study uses SmartPLS software. The data analysis methods in this study are Descriptive Statistics, Descriptive Analysis and Inferential Statistical Analysis.
 Results: Based on the results of the analysis, it is found that good corporate governance has no effect on financial distress, and good corporate governance moderated by intellectual capital has a negative effect on financial distress.

Financial Distress Prediction: A Hybrid Tracking Model Approach

“…To this end, effective financial distress prediction is very important [4]. Dirman [5] proposed the importance of sound corporate governance to corporate financial distress prevention. Bankruptcy prediction and credit risk assessment are the two most pressing problems in the finance field [6].…”