The Mechanism of Board of Commissioners and Managerial Ownership on Financial Performance with Mediation of Capital Structure in the Indonesia Stock Exchange
Nasirwan (a*) Azizul Kholis (b), Muhamad Ridha Habibi Z (c)

Department of Accounting, Faculty of Economic, Medan State University, Medan, Indonesia
nasirwan[at]unimed.ac.id

Abstract

This study aims to analyze the effect of the board of commissioners mechanism and managerial ownership on financial performance with capital structure as a mediating variable. This study uses a quantitative approach with a research population consisting of 47 banking companies listed on the Indonesia Stock Exchange for the period 2022-2024. The sampling technique used purposive sampling with a total sample of 18 companies. The data analysis technique uses Structural Equation Modeling (SEM) with the help of the Smart PLS 3 application. The research findings indicate that, first, the board of commissioners has no direct effect on financial performance, but has a direct effect on capital structure. Second, managerial ownership has a direct effect on financial performance, but does not directly affect capital structure. Third, capital structure has a direct effect on the company^s financial performance. Regarding indirect effects, both the board of commissioners and managerial ownership do not affect financial performance through capital structure as a mediating variable. These findings suggest that managerial ownership plays a more dominant role in improving financial performance compared to the board of commissioners^ mechanism. Capital structure is also proven to be an important factor influencing financial performance, but it does not act as a mediator in the relationship between the board of commissioners^ mechanism and managerial ownership with financial performance.

Keywords: Board of Commissioners, Managerial Ownership, Capital Structure, Financial Performance.

Topic: Economics, Social and Early childhood Education