Saudi Journal of Economics and Finance (SJEF)
Volume-2 | Issue-06 | 321-330
Original Research Article
The Effect of Good Corporate Governance (GCG) on Profitability in Banking Listed in Indonesia Stock Exchange in year 2012 – 2016
Siti Marisa Noviani, Tertiarto Wahyudi, Mohamad Adam
Published : Dec. 30, 2018
Abstract
This research aims to determine the effect of Good Corporate Governance
(GCG) which proxied by the General Meeting of Shareholders (RUPS), Number of
Commisioners (JDK), Number of Board Directors (JDD), Institutional Ownership (KI),
and Audit Committee (KA) on profitability as measured by Operating Income Operating
Costs (BOPO). The Sampling Technique used by this research is Purposive Sampling
Technique which is using as many as 30 bank's Yearly Financial Reports that are listed in
the Indonesian Securities Market on 2012-2016. Panel Data Regression used by this
research as Data Analysis Method. This Research results show that the RUPS has a
positive effect on BOPO as much as 6,546831 with a probability value of 0.0001 < 0.05.
Means that RUPS had a significant effect on BOPO. The effect of JDK on BOPO is -
1.808941 with a probability value of 0.0725> 0.05, so the JDK has no significant effect
on BOPO. The effect of JDD on BOPO shows the amount of -2.440531 with a probability
value of 0.0159 <0.05, so it can be concluded that JDD has a significant effect on
BOPO.The KI effects on BOPO is 2.576708 with a probability value is 0.0110 <0.05, so
KI has a significant effect on BOPO.The KA effects on BOPO is 0.747203 with a
probability value of 0.4562> 0.05, so it can be concluded that KA has no significant effect
on BOPO. This means that every change of committee assuming other variables remain
(Ceteris Paribus), then BOPO does not experience changes.