Corporate governance and return on assets in mining industry companies: The developing market study

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Abstract

Differences in interests lead to conflict between managers with owners of capital because managers do not always align interests with the interests of company owners (Jensen & Meckling, 1976). Corporate governance has a very important role in increasing various growths, one of which is the growth of the company’s finances. In the application of corporate governance, it takes several parties who can bridge corporate governance to be applied in the company. The board of commissioners is the core of governance that is tasked with ensuring the implementation of the company’s strategy, supervising management, and requiring accountability. The purpose of this study was to find out what important parties in the company had a significant impact on the company’s finances as measured through the return on assets (ROA) of mining companies. This study uses secondary data collected from financial statements and annual reports from mining companies listed on the Indonesia Stock Exchange (IDX) that can be accessed regularly. In this study, data analysis to test hypotheses was multiple linear regression analysis. The analysis of multiple linear regression data measures the interval or ratio data to know whether the free variables studied have a good correlation. The results of the study show that all parties who have an important role in bridging corporate governance such as the board of commissioners, independent commissioners, board of directors, and audit committee, have no significant influence on the growth of ROA in the company.

Keywords: Corporate Governance, Good Corporate Governance, ROA

Authors’ individual contribution: Conceptualization — M., M.F., and D.W.; Investigation — K.R. and M.D.A.; Resources — M. and A.W.; Writing — M., M.F., and A.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D7, M2, M4, Z3

Received: 09.08.2022
Accepted: 09.10.2023
Published online: 12.10.2023

How to cite this paper: Meiryani, Fahlevi, M., Rivalldo, K., Ariefianto, M. D., Winoto, A., Wahyuningtias, D., & Syamil, A. (2023). Corporate governance and return on assets in mining industry companies: The developing market study. Corporate Governance and Organizational Behavior Review, 7(4), 94–103. https://doi.org/10.22495/cgobrv7i4p8