The Influence of Good Corporate Governance on Financial Stability

Abstract

This study investigated the influence of good corporate governance, in terms of the size of the board of commissioners, the size of the board of directors, and the firm size, on corporate financial stability using total assets. The sample of this study consisted of 11 companies listed in the Jakarta Islamic Index in 2016-1018. The samples were selected using purposive sampling with a period of three years. Multiple linear regression was used for data analysis. The findings showed that the size of the board of commissioners and the size of the firm did not significantly influence corporate financial stability (p > 0.05). However, the size of the board of directors did have a significant influence on financial stability (p = 0.03). It was found that the size of the firm, board of commissioners and board of directors contributed to 7.5% of the change in total assets, while the remaining 92.5% was due to other variables not studied in this research. Keywords: good corporate governance, board of commissioners, board of directors, firm size, change in total assets