PENGARUH PENERAPAN GOOD CORPORATE GOVERNANCE TERHADAP FINANCIAL DISTRESS

Abstract

This research intended to examine the effect on Good Corporate Governance as the proxy for institutional ownership, managerial ownership, board of direction, board of commissionaire, and audit committee to the Financial Distress.The application of Good Corporate Governance mechanisms will reduce the risk of companies experiencing financial distress. The companies will always take appropriate and selfless actions, and can protect company stakeholders. The population of this research was obtained through purposive sampling method at manufacturing companies which were listed in Indonesia Stock Exchange (IDX) during 2013-2016 periods and based on the determined criteria. There were 23 manufacturing companies to be investigated. The analysis method used logistic regressions analysis with the instrument of SPSS (Statistical Product and Service Solutions). The result of this research showed that institutional ownership, managerial ownership gave negative effect on the financial distress. Board of director and board of commissionaire did not have any effect on the financial distress. Meanwhile, audit committee gave positive influence to the financial distress. The model feasibility test, independent variable gave influence to the dependent variable.
Keywords: institutional ownership, managerial ownership, board of director, audit committee, financial distress