IJSTR

International Journal of Scientific & Technology Research

Home About Us Scope Editorial Board Blog/Latest News Contact Us
0.2
2019CiteScore
 
10th percentile
Powered by  Scopus
Scopus coverage:
Nov 2018 to May 2020

CALL FOR PAPERS
AUTHORS
DOWNLOADS
CONTACT

IJSTR >> Volume 5 - Issue 5, May 2016 Edition



International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616



Corporate Board And Firm Value: Perspective Two-Tier Board System In Indonesia

[Full Text]

 

AUTHOR(S)

Leni Susanti, Sulaeman Rahman Nidar

 

KEYWORDS

board of commissioners, board of directors, firm value, two-tier board system.

 

ABSTRACT

This study aimed to investigate whether the effect of board commissioners and board of directors toward firm value at companies listed in Indonesia Stock Exchange. Secondary data is used and collected based on time series and cross section from 2010 until 2014, among 184 companies as unit observation. This study uses data panel regression analysis techniques with Generalized Least Square (GLS). Chow test and Hausman test show that the model used as a fixed effect estimation technique. The results show simultaneously the board of commissioners and board directors have a significant effect on firm value. Furthermore, partially the board of commissioners has a negative and significant effect toward firm value. The board of directors has a positive and significant effect toward the firm value.

 

REFERENCES

[1] Abidin, Zubaidah Zainal., Kamal, Nurmala Mustaffa., Jusoff, Kamaruzaman. (2009). Board Structure and Corporate Performance in Malaysia. International Journal of Economics and Finance, Vol. I, No.1 February

[2] Abor, J. (2007). Debt Policy and Performance of SMEs: Evidence from Ghanaian and South Africa Firms. Journal of Risk Finance, Vol. 8: 364-379.

[3] Agrawal, A. & Knoeber, C.R. (1996). Firm Performance and Mechanisms to Control Agency Problems between Managers and Shareholders. Journal of Financial and Quantitative Analysis, Vol. 31 No. 3: 377-97.

[4] Ajija, Shochrul R. (2011). Cara Cerdas Menguasai EViews. Salemba Empat. Jakarta.

[5] Al Aggugi, Achmad Faisal, dan Silitonga, Kasih. (2011). Ketika Fungsi Pengawasan Sudah Tidak Berfungsi. SPA FEUI 949 Comment Accounting, Articles.

[6] Al-Najjar, B. (2012). The Determinant of Board Meeting: Evidence from Categorical Analysis. Journal of Applied Accounting Research, 13(2): 178 – 190.

[7] Barnhart, S. & Rosenstein, S., (1998). Board Composition, Managerial Ownership, and Firm Performance: An Empirical Analysis. The Financial Review, 33 (4), 1-16.

[8] Bathala, C.T., Moon, K.P., & Rao, R.P. (1994). Managerial Ownership, Debt Policy, and the Impact of Institutional Holdings: An Agency Perspective. Financial Management, 23(3): 38-50.

[9] Bennedsen, M., (2002). Why do Firms Have Boards?. Working paper, Copenhagen Business School.

[10] Bhagat S.& Bolton B. (2008). Corporate Governance and firm Performance. Journal of Corporate Finance. 14(3): 257-273.

[11] Brainard, W. C. and J. Tobin. (1968). Pitfalls in financial model buildings. American Economic Review, Vol. 58, No. 2: 99-122.

[12] Brick, I.E. and Chidambaran, N.K. (2007). Board Meetings, Committee Structure, and Firm Performance. Unpublished manuscript, Rutgers University, New Jersey, NJ.

[13] Coles, J. L. and Li, Z. F. (2011). An Empirical Assessment of Empirical Corporate Finance. Working Paper (Arizona State University, University of Western Ontario).

[14] Conger, J, Finegold, D and Lawler III, E. (1998). Appraising Boardroom Performance, Harvard Business Review, 76: 136-148

[15] Dalton, D. R., Daily, C. M., Ellstrand, A. E., & Johns on, J. L. (1998). Meta-Analytic Reviews of Board Composition, Leadership Structure, and Financial Performance. Strategic Management Journal, 19: 269-290

[16] Davis, G. F., & T. Thompson. (1994). A Social Movement Perspective on Corporate control. Administrative Science Quarterly, 39: 141–173.

[17] El Mehdi, IK. (2007). Empirical Evidence on Corporate Governance and Corporate Performance in Tunisia. Corporate Governance: An International Review, Vol. 15, No. 6: 1429-1441.

[18] Fich, E.M., Shivdasani, A. (2006). Are Busy Boards Effective Monitors? Journal of Finance 61: 689–724.

[19] Finkelstein, S., & Hambrick, D. (1996). Strategic Leadership: Top Executives and Their Effects on Organizations. Minneapolis/St. Paul, MN: West Publishing

[20] Garratt, B. (1996). The Fish Rots From The Head: The Crisis in Our Boardrooms: Developing The Crucial Skills of The Competent Director. London: Harper Collins Business.

[21] Golden, B. R. and Zajac, E. J. (2001). When will Boards Influence Strategy? Inclination × Power = Strategic Change. Strategic Management Journal, 22: 1087-1111.

[22] Hahn, P. and M. Lasfer. (2011). Non-executive (outside) director compensation: Rationale, form, and findings. Journal of Management and Governance, 15(4): 589-601

[23] Herman, E.S. (1981). Corporate control. Corporate power. Cambridge, New York and Melbourne: Cambridge University Press.

[24] Hilmer, F. G. and the Independent Working Party into Corporate Governance. (1993). Strictly boardroom: Improving Governance to Enhance Company Performance. Melbourne: Business Library.

[25] Hung, H. (1998). A Typology of The Theories of The Roles of Governing Boards. Corporate Governance: An International Review, 6: 101-111.

[26] Jensen, M.C. (1993). The Modern Industrial Revolution, Exit and Failure of Internal Control System. The Journal of Finance, Vol. XLVII No. 3: 831-880.

[27] Karamanou, I. and Vafeas, N. (2005). The Association between Corporate Boards, Audit Committees, and Management Earnings Forecasts: an Empirical Analysis. Journal of Accounting Research, Vol. 43, No. 3:. 453-486

[28] Kula, V. (2005). The Impact of the Roles, Structure and Process of Boards on Firm Performance: Evidence Endure From Turkey. Corporate Governance: An International Review, 13 (2): 265-276.

[29] Kumar, Praveen and Sivaramakrishnan, Shiva. (2008). Who Monitors the Monitor? The Effect of Board Independence on Executive Compensation and Firm Value. The Review of Financial Studies, Vol. 21, Issue 3: 1371-1401,

[30] Lang, L.H.P., Stulz, R.M, and Walkling, (1989). Managerial Performance, Tobin’s q, and the Gains from Successful Tender Offers. Journal of Financial Economics: 137-154.

[31] Lindenberg, E.B, and Ross, S.A., (1981). Tobin’s q Ratio and Industrial Organization. Journal of Business, Vol. 54 No.1: 1-32

[32] Lipton, M. and Lorsch, J. W. (1992). A Modest Proposal for Improved Corporate Governance. Business Lawyer, 48: 59- 77.

[33] Lixia, Gu and Na, Bian. (2009). A Study on the Correlation Between Characteristics of BOD and Corporate Value. Proceedings of the 7th International Conference on Innovation & Management, 831-834

[34] Mace, M.L. (1971). Directors: Myth and reality. Boston: Harvard University.

[35] Mangena, M & Tauringana, V. (2008). Corporate Boards, Ownership Structure and Firm Performance in an Environment of Severe Political and Economic Uncertainty. Paper Presented at the British Accounting Association Conference, Blackpool, UK

[36] McConnell, J., Servaes, H., (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics 27: 595–612.

[37] Morck, R., Shleifer, A. & Vishny, R., (1988). Management Ownership and Market Valuation: an Empirical Analysis. Journal of Financial Economics 20: 293–315.

[38] Ntim, Collins. G., and Osei, Kofi. A. (2011). The Impact of Corporate Board Meetings on Corporate Performance in South Africa. African Review of Economics and Finance, Vol. 2, No. 2: 83-103.

[39] Pearce, J. A., II and Zahra, S. A. (1991). The Relative Power of CEOs and Boards of Directors: Associations with Corporate Performance. Strategic Management Journal, 12: 135-153.

[40] Shleifer, A., & Vishny, R. W. (1997). A Survey of Corporate Governance. The Journal of Finance, 52(2): 737-783.

[41] Silitonga, Kasih. (2013). We Believe in Corporate Governance. Indonesia: One Tier atau two Tier.

[42] Sonnenfeld, J.A. (2002). What makes great boards great. Harvard Business Review, September 2002

[43] Stiles, P. and Taylor, B. (2001). Boards at work: How Directors View their Roles and Responsibilities. Oxford: Oxford University Press

[44] Tobin’s, James, (1969). A General Equilibrium Approach to Monetary Theory, Journal of Money, Credit and Banking (February): 12-29.

[45] Tricker, R. I. (1984). Corporate Governance: Practices, Procedures and Powers in British Companies and Their Boards of Directors. Gower Publishing Company, Vermont

[46] Ugurlu, M. (2000). Agency Costs and Corporate Control Devices in the Turkish Manufacturing Industry. Journal of Economic Studies, Vol. 27, No 6: 566-589.

[47] Vafeas, N. (1999). Board Meeting Frequency and Firm Performance. Journal of Financial Economics. 53: 113-142.

[48] Verbeek, M., KU Leuven, and Tilburg University. (2003). A Guide to Modern Econometrics. John Wiley & Sons Ltd., Chiches

[49] Widarjono, Agus. (2009). Ekonometrika Pengantar dan Aplikasinya. Edisi Ketiga. EKONISIA. Yogyakarta

[50] Yoshikawa, Toru and Phan, H, Philip. (2005). The Effect of Ownerships and Capital Structure on Board Composition and Strategic Diversification in Japanese Corporations. Blackwell Publishing. Vol.13, No.2

[51] Zeitun, R. and Tian, G. G., (2007). Capital structure and corporate performance: evidence from Jordan. Australasian Accounting, Business and Finance Journal, 1(4): 40-61.