The Influence of Good Corporate Governance Implementation and Company Size on Financial Performance: Evidence from Indonesian Banking

This study aims to determine the effect of good corporate governance as proxied by an independent board of commissioners, board of directors, audit committee, institutional ownership and firm size on the financial performance of banking companies listed on the Indonesia Stock Exchange for the period 2018-2020. The sampling method used is purposive sampling method, in order to obtain 17 sample banking for 3 years of observation which were downloaded from the Indonesia Stock Exchange website. The data analysis technique is panel data regression with the Eviews version 9.0 program. Partially, the Independent Board of Commissioners, Audit Commitees, Company Size variables have no significant effect on financial performance. However, the Board of Directors and Institutional Ownerships variables have significant effect on Financial Performance.


Introduction
One way to improve financial performance and assess the system the work of a bank is through the assessment of good corporate governance by the concept is considered capable of improving the financial performance of a company or banking. PBI Number 8/4/2006, Bank Indonesia requires that the board of commissioners ensure that good corporate governance (GCG) has been implemented with well in every bank's business activities at all levels of the organization. Board the commissioner is obliged to carry out supervision of the implementation of duties and responsibilities of the board of directors, as well as providing advice to the board of directors. Board The Board of Commissioners and the Board of Directors are internal elements of Good Corporate Governance is a necessary element in the company.
The global economic crisis in Asia and Latin America, followed by the cases of Bank Lippo and Bank Century describing the phenomenon that the implementation of GCG in Indonesia is relatively weak due to the lack of transparency in Corporate Governance, this triggers corporate governance reform agencies in Asia, including Indonesia. The implementation of GCG is believed to improve company performance. Good Corporate Governance, namely managerial and institutional ownership has an influence on company performance. The non-financial component which is currently an important issue and needs to be considered by companies in an effort to increase company profits and performance is by using the concept of Corporate Governance or better known as Good Corporate Governance (GCG).' Based on previous research, good corporate governance used in this study is based on an assessment of the GCG structure which consists of an independent board of commissioners, board of directors, audit committee and institutional ownership (Aprianingsih, 2016). The board of commissioners is in charge of supervising and is responsible for supervising the management policies, the course of management in general, whether regarding Issuers or Public Companies or the business of Issuers or Public Companies. And provide advice to the Board of Directors Committee is formed by the board of commissioners so that the audit committee is responsible for: responsible to the board of commissioners (Damayanti & Susanto, 2015). While the Institutional Ownership Structure is share ownership by the government, financial institutions, legal entities, foreign institutions, representative funds and other institutions at the end of the year (Scott & O'Brien, 2019).
Based on the importance of Good Corporate Governance (GCG) and the problem of inappropriate implementation, then the existence of diverse ownership structures can affect managers in reporting the company's financial performance, therefore researchers are interested in conducting research by taking samples from the population in the financial statements of banking companies that have go public listed on the Indonesia Stock Exchange (IDX) for the 2018-2020 period. The author is very interested in researching banking companies to determine the implementation of good corporate governance (GCG) and company size on the financial performance of banks.

Literature Review
In banking sectors, board of directors and company size affected ROA but board of comissioners and audit committee did not affect ROA (Mulyaningtyas & Candra, 2021). GCG was a significant but company size was an insignificant on ROA (Saragih & Sihombing, 2021).
GCG and company size were significant effect ROA (Onoyi & Windayati, 2021). The instutional ownership, board of commissioners and company size were significant effect on ROA (Fitriyani, 2021).
Ahmad Minan Santoso (2015) which states that the existence of an independent commissioner will increase the existing supervision because the Independent Board of Commissioners comes from outside the company. The increase in supervision is intended so that companies can carry out healthy business activities and reduce deviant management behavior. Independent commissioners are proportional to the number of shares owned by nonholderscontrolling share. The stipulation is that the number of independent commissioners must be at least 30% of all commissioners. The independent commissioner can also serve as chairman of the audit committee.
In previous research conducted by Aprianingsih (2016) stated that the Independent Board of Commissioners has a negative and insignificant effect on the Financial Performance of the Bank. The same thing was also stated by (Dewi & Tenaya, 2017) that the Independent Board of Commissioners has no effect on Banking Financial Performance. The results of this study Indonesian Financial Review 2 (1) 2022 26-41 E-ISSN : 2807-3886 29 are in line with research conducted by Santoso (Santoso, 2015) which states that the Independent Board of Commissioners has a negative effect, because the behavior of the Independent Board of Commissioners deviates from its duties so that it does not increase the effectiveness of supervision and also does not improve the Financial Performance of the Bank.
According to Santoso (2015) The increasing number of the board of directors assist banks to increase relationships with external parties thereby increasing the bank's opportunities to attract and distribute funds. The Board of Directors has considerable influence in determining the direction of the banking sector to achieve profit. The Board of Directors always maintains and manages wealth the company in a trustworthy and transparent manner, if necessary, the board of directors requires the approval of the commissioners or the GMS in every decision making. To that end, the Board of Directors develops a structured and comprehensive internal control system and risk management system and the Board of Directors in leading and managing risk manage the company solely for the interests and objectives of the company and always try to improve the efficiency and effectiveness of the company. According to Dewi dan Tenaya (2017) The Board of Directors has an effect on the Financial Performance of the Bank. This research is the same as research (Santoso, 2015) that the board of directors has a positive and significant effect on banking financial performance. This study is in line with research conducted by Santoso (2015) which states that the variable of the Board of Directors has a positive and significant effect on Banking Financial Performance.
According to research by Santoso (2015), the board of directors has a considerable influence in determining the direction of banking to achieve profit. Therefore, if the board of directors experiences an increase in effectiveness, it can improve the financial performance of the bank. Based on this explanation, According to Santoso (2015) With the supervision carried out by the audit committee on the company's internal control, it will minimize the occurrence of unhealthy actions carried out by management for its own interests. In this way, the company's performance will increase. According to Aprianingsih (2016), the Audit Committee has a positive and significant impact on Banking Financial Performance. The same thing was stated by Santoso (2015) which stated that the Audit Committee had a significant effect on financial performance. The Audit Committee plays a role in overseeing the audit process as well as the ongoing internal control system. The results of this study indicate that the existence of an audit committee is proven to be able to improve banking financial performance. The existence of the Audit Committee is able to improve the Financial Performance of the Bank due to being able to reduce the management's unhealthy behavior and increase investor confidence in the banking sector.
According to (Aprianingsih, 2016) Institutional ownership is a condition where the institution owns shares in a company and usually in large numbers. Based on this study, institutional ownership does have a very high number of shareholdings so that institutions will tend to act in their own interests at the expense of their interests minority shareholders and will create an imbalance in determining the direction of company policies which will even be more profitable for the majority shareholders, namely the institution.
Institutional ownership is share ownership by government financial institutions, legal entities, foreign institutions, trust funds and other institutions at the end of the year (Scott & O'Brien, 2019). Institutional ownership is one of the factors that can affect the company's performance. The existence of ownership by institutional investors will encourage a more optimal increase in supervision of management performance, because share ownership represent a source of power that can be used to support or otherwise the performance of management. The greater the ownership by financial institutions, the greater the voting power and encouragement of financial institutions to oversee management and consequently will provide a greater impetus to optimize the value of the company so that company performance will also increase.
According to research by Aprianingsih (2016) Institutional Ownership has a negative and significant effect on Banking Financial Performance. So from the results of these studies it is concluded that the presence of greater institutional share ownership will make the supervision of financial statements more stringent because of the large interest owned.
Company size is a way that can classify companies in various ways, namely total assets, Indonesian Financial Review 2 (1) 2022 26-41 E-ISSN : 2807-3886 31 total sales, number of workers, and others. The greater the total assets and sales, the greater the size of a company (Wati & Putra, 2017).
The company size category is divided into three, namely, first, Big Companies are companies that have a net worth of more than IDR 10 billion including land and buildings.
Have sales of more than IDR 50 billion per year. Second, medium-sized companies are companies that have a net worth of IDR 1-10 billion including land and buildings. Have sales results greater than IDR 1 billion and less than IDR 50 billion. Third, a small company is a company that has a net worth of at most Rp. 200 million excluding land and buildings and has a sales income of at least 1 billion per year.So, from some of the definitions above, it can be concluded that the size of the company is the size of the company as seen from the total assets According to research by Aprianingsih (2016), the independent board of commissioners, board of directors, audit committee, institutional ownership, and company size have a positive and significant effect on banking financial performance. The same thing was also stated by (Santoso, 2015) From the results of this study, the researcher concluded that the Board of Independent Commissioners, Board of Directors, Audit Committee, Institutional Ownership Structure and Company Size had a significant effect on Banking Financial Performance.
With the implementation of good corporate governance in the company, namely by choosing a competent independent board of commissioners who will oversee the performance Indonesian Financial Review 2 (1) 2022 26-41 E-ISSN : 2807-3886 32 of the board of directors in carrying out company policies and strategies, the board of directors will be better at carrying out their performance to improve the performance of the company. competent in carrying out the company's strategic planning, will improve the company's performance. Likewise, the audit committee plays a very important role in assisting the board of commissioners to oversee internal control within the company so that a conducive work environment will be created.
It can be seen that the results of all data analysis of the independent variables on the dependent variable data are very influential so that the variable of the Board of Commissioners can improve the Banking Financial Performance.
The formulation of the hypothesis that the researcher proposes is as follows: H1: It is suspected that the Independent Board of Commissioners has an effect on financial performance.
H2: It is suspected that the board of directors has an effect on financial performance. H3: It is suspected that the audit committee has an effect on financial performance H4: It is suspected that institutional ownership affects financial performance H5: It is suspected that company size affects financial performance       Table 5 shows the fixed effect model. All of independent variables can not explained performance banks well.  between fixed effect and common effect. The cross-section Chi-square shows probability 0.0000 that means fixed Effect is better choice than common effect.   Table 8 shows hausman test. The hausman test is the test which is picking the best model between random effect and fixed effect. Cross-section random is 0.2181. The probability means that random effect is better than fixed effect.  Table 9 shows lagrange multiplier. Lagrange multiplier is the test that provides the best model between random effect and commmon effect. The probability of cross-section is 0.0320 that random effect is better than common effect.

Discussions
This research shows that only board of directors and institutional ownerships affected Ownerships (Fitriyani, 2021) affected on ROA. The avenues of future research are that the diversity of gender in board of directors and the the institutional ownerships from government or private companies can affect more performance banks.