DIRECTORS AND COMMISSIONERS REMUNERATION AND FIRM PERFORMANCE: INDONESIAN EVIDENCE
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Date
2011-03-14
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2nd International Conference on Business and Economic Research (2nd ICBER 2011)
Abstract
The financial crisis in Asia in mid-1997 have an impact on the economic performance of
countries in East Asian, including Indonesia. The lack of sound corporate governance has been
argued to be a major cause of the 1997 financial and economic crisis experienced by countries
in the East Asian region (D’Cruz, 1999). The Indonesian government through the relevant
authorities such as the Ministry of Finance, Capital Market Supervisory Agency and Financial
Institution (Bapepam-LK), Indonesia Stock Exchange, Bank Indonesia (Central Bank of the
Republic of Indonesia), oversee the implementation of corporate governance practices in
companies. Corporate governance principles require the disclosure of remuneration for
directors and commissioners (“directors commissioners”).
The purpose of this study is to investigate the relationship between Indonesian directors’
remuneration and firm performance. From a sample of 100 listed companies throughout the
period 2008-2009, it has been found that there has been positive relationship between current
year directors and commissioners remuneration and lag effect analysis accounting performance
indicator.
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Keywords
directors and commissioners remuneration, accounting measurement, firm performance