Abstract:
Implementing corporate governance (GCG) in an enterprise is not an
easy process. Required consistency, commitment, and a clear understanding of all
stakeholders the company on how the process should be run. Implementation of
the practices of good corporate governance is an important step for the company
to improve and maximize the value of the Company, pushing to manage the
Company in a professional, transparent and efficient by increasing the principles
of openness, accountability, trustworthy, responsible and fair so as to fulfill its
obligations either to the Shareholders, Board of Directors, Board of
Commissioners, and stakeholders.
This reasearch used purposive sampling based on manufacturing
companies index for the period of 2011 – 2013. This study used multiple
regression model with 5% significant level. The objective of this study is to know
the effect of good corporate governance implementation towards profitability of
manufacturing companies listed in Indonesia Stock Exchange for the period of
2011-2013.
The result of this research showed that the top share, board of directors,
and composition of board of commissioners have significant effect towards
profitability. Meanwhile, audit quality, board of commissioners, and audit
committee have not significant effect towards profitability. Simultaneously, audit
quality, top share, board of directors, board of commissioners, composition of
board of commissioners, and audit committee have significant effect towards
profitability with 18.8% adjusted R2.
