THE INFLUENCES OF CORPORATE GOVERNANCE MECHANISM TOWARD COMPANY FINANCIAL PERFORMANCES. (AN EMPIRICAL STUDY ON LISTED COMPANIES IN INDONESIA STOCK EXCHANGE AS STATED IN LQ 45 IN 2012)

Abstract

This study aims to examines the influence of good corporate governance to companies financial performances in Indonesia. The factors tested in this study is the composition of board of commissioners, board of directors, and audit committee, and also the proportion of independent commissioner and the auditor reputation. Company financial performance is measured by CFROA. Data collection using a purposive sampling method to the companies listed in Indonesia Stock Exchange as LQ 45 in 2012. There was 39 companies used as sample. The method of analysis of this study used multiple regression. These result of the study indicates that there is no significant effect between internal mechanisms of corporate governance to company financial performances except board of directors who have a negative significant effect to the company financial performances. Auditor reputation as external mechanism has a positive significant effect to financial performances.