PENGARUH MEKANISME GOOD CORPORATE GOVERNANCE (GCG) TERHADAP KINERJA PERBANKAN DENGAN MANAJEMEN RISIKO SEBAGAI VARIABEL INTERVENING

Abstract

This research aimed to examine the effect of the mechanism of Good Corporate Governance (GCG) on banking performance, with risk management as an intervening variable. GCG was measured by the number of members of the board director, commissioner board, independent commissioner, and audit committee. Moreover, banking performance was measured by Return On Equity (ROE) ratio and management risk was measured by Loan to Deposit Ratio (LDR). The research was quantitative. Furthermore, the data collection technique used purposive sampling, in which the sample was based on certain characteristics and criteria. In line with that, there were 20 banking companies as the sample during 2016-2019. Additionally, the data were secondary in the form of annual reports from the IDX website or the Indonesia Stock Exchange (IDX). The data analysis technique used multiple linear regression with SPSS. The result concluded that the board of directors, commissioner board, independent commissioner, and audit committee (GCG mechanism) had a positive effect on risk management. However, it did not affect banking performance. Likewise, risk management had a positive effect on banking performance. In addition, risk management could mediate fully the relationship of the GCG mechanism on banking performance.