The Relationship Between Good Corporate Governance and Performance of Most Liquid Stocks in Indonesia

Abstract

The purpose of this study is to analyze the influence of independent commissioners, managerial ownership, foreign ownership, debt, and audit quality on the performance of company shares included in LQ 45 on the Indonesia Stock Exchange. The research sample is LQ 45 companies that issued financial statements as much as 120 companies with analysis technique used is multiple regression with one dependent variable and five independent variables. The results showed that foreign ownership, debt and audit quality have significant and positive effects on company performance. Moreover, the insider share ownership and the composition of independent commissioners were proven to not significantly affect company performance. This finding is practically useful to expand the possibility of foreign ownership, facilitate regulation of debt and quality audit obligations to improve stock performance. This study offers a new perspective on the implementation of good corporate governance in the context of the performance of liquid stocks on the stock exchange.