Implication of Corporate Governance and Financial Performance on Firm Value

Abstract

This study seeks to examine the implications of corporate governance and financial performance on firm value. The population selected are all companies that follow CGPI (Corporate Governance Preception Index) scoring held by IICG (The Indonesian Institute for Corporate Governance) in 2015-2018. Sampling of the research is purposive sampling with samples criteria are public companies participate in CGPI scoring and publish their financial statements on Indonesia Stock Exchange’s website or publish on the official website of respective companies. The total population followed CGPI score was 137 companies, 55 of those are public companies and 5 samples are outlier data. The statistical test used in this research were descriptive statistics analysis and multiple regression analysis. This research results in findings that both simultaneously and partially there are implications for corporate governance and financial performance to firm value. Therefore, the implementation of corporate governance and financial information disclosure in companies is fundamental to realizing firm value.