The Influence of Corporate Governance on the Performance of LQ 45 Index Companies Listed on the Indonesia Stock Exchange in 2019 to 2023

Abstract

This study aims to analyze the influence of corporate governance on the performance of companies that are members of the LQ45 index in Indonesia for the 2019–2023 period. The corporate governance variables studied included the size of the independent board of commissioners, the size of the board of directors, the proportion of commissioners' shareholding, the proportion of directors' shareholding, and the proportion of public shareholding, while the company's performance was measured using Tobin's Q. This study used a quantitative approach with a purposive sampling method so that 17 companies were obtained as a research sample. The data were analyzed using multiple linear regression. The results show that the size of the independent board of commissioners and the proportion of public shareholding have a significant effect on the company's performance. In contrast, the size of the board of directors, the ownership of the shares of the directors, and the ownership of the shares of the commissioners did not show a significant influence. These findings indicate that the role of independent oversight and the participation of public shareholders is more effective in increasing the value of the company than managerial ownership. The contribution of this research is to provide empirical evidence on the most relevant corporate governance factors in improving the performance of large and liquid companies in the Indonesian capital market.