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Growing Science » Accounting » The role of the board of director with political connection for increasing the firm value

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Accounting

ISSN 2369-7407 (Online) - ISSN 2369-7393 (Print)
Quarterly Publication
Volume 6 Issue 7 pp. 1285-1290 , 2020

The role of the board of director with political connection for increasing the firm value Pages 1285-1290 Right click to download the paper Download PDF

Authors: Fahmi Idris, Agung Dharmawan Buchdadi, Muhammad Rizqi Muttaqien, Taqwa Hariguna

DOI: 10.5267/j.ac.2020.8.023

Keywords: Independent Board of director, Executive Compensation, Political Connections, Company Performance, Company Value

Abstract: This study examines the impact of independent board of directors, executive compensation, and political connections on firm performance in one of the biggest democracy countries in South East Asia. Company performance is measured by return on assets (ROA), and firm value is measured by Tobin's Q. Meanwhile, as an independent variable we use several good corporate governance variables, namely the board of directors, executive compensation variable and political connections. Company data are from companies listed in LQ45 index which means the best stock performance in Indonesia capital market. The finding shows the crucial role of independent board of director and political connection for enhancing the firm value. Findings indicate an independent board of director can improve company performance. Meanwhile, executive compensation can provide motivation to increase company value, but has other motivations in improving company performance. Meanwhile, political connections can improve company performance and value. Thus, this study emphasizes the crucial role of the experience and the connection of the board of directors in improving the value of the firm.

How to cite this paper
Idris, F., Buchdadi, A., Muttaqien, M & Hariguna, T. (2020). The role of the board of director with political connection for increasing the firm value.Accounting, 6(7), 1285-1290.

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Journal: Accounting | Year: 2020 | Volume: 6 | Issue: 7 | Views: 2697 | Reviews: 0

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