Proceedings of the 4th International Conference on Accounting, Management, and Economics, ICAME 2019, 25 October 2019, Makassar, Indonesia

Research Article

The Effect of Corporate Governance Mechanism on Financial Distress in State-Owned Enterprises

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  • @INPROCEEDINGS{10.4108/eai.25-10-2019.2295366,
        author={Fuad  Ahsan and Otto Randa Payangan and Idayati  Nursyamsi},
        title={The Effect of Corporate Governance Mechanism on Financial Distress in State-Owned Enterprises },
        proceedings={Proceedings of the 4th International Conference on Accounting, Management, and Economics, ICAME 2019, 25 October 2019, Makassar, Indonesia},
        publisher={EAI},
        proceedings_a={ICAME},
        year={2020},
        month={6},
        keywords={good corporate governance independence board ceo ownership executive director ownership family ownership independent audit committee and audit committee expertise},
        doi={10.4108/eai.25-10-2019.2295366}
    }
    
  • Fuad Ahsan
    Otto Randa Payangan
    Idayati Nursyamsi
    Year: 2020
    The Effect of Corporate Governance Mechanism on Financial Distress in State-Owned Enterprises
    ICAME
    EAI
    DOI: 10.4108/eai.25-10-2019.2295366
Fuad Ahsan1,*, Otto Randa Payangan1, Idayati Nursyamsi1
  • 1: Universitas Hasanuddin, Makassar, Indonesia
*Contact email: vuadalviaro@gmail.com

Abstract

This study aims to analyze the influence of corporate governance on a company's financial distress. In discussing corporate governance specifically, it is seen from specific aspects which include the independence board, CEO ownership, executive director ownership, family ownership, independent audit committee, and audit committee expertise in terms of the financial condition of the affected company. There are 16 state-owned enterprises that are presented in the Indonesia Stock Exchange, where 8 companies are indicated to be depressed and 8 companies that are indicated to be healthy in the 2015-2018 period. After doing research, it was found that corporate governance variables did not have a significant effect on corporate financial difficulties, such as the return on asset (ROA) variable that influenced the company's financial distress variables, so it can be explained how corporate governance cannot be used as a tool to improve performance corporate finance in Indonesia.