The Effect of Board of Commissioners and Audit Committee in the Corporate Governance on the Financial Performance of the Non-Financial Companies which included in the LQ45 in Indonesia

Corporate governance is one of the important indicators that is believed to influence the financial performance of the Company in Indonesia. Previous studies have produced different kinds of conclusions, where in one study stated that there was a significant positive effect of the number of board of commissioners, the proportion of board of commissioners and audit committee on the company's financial performance but the other studies stated otherwise. The purpose of this study is to bridge the results of different studies by adding several control variables such as company age, company size and leverage and financial performance measures in the form of ROA and ROE included together to strengthen the results of testing analysis. Samples were taken from 21 non-financial public companies that were included in LQ45 for 5 consecutive years in Indonesia, considering that companies included in LQ45 are generally companies that have good financial performance and are considered to have good liquidity and market capitalization. The results of this study indicate that the size of the board of commissioners has a positive significant effect on company performance as measured by ROA and ROE, because of the resource dependency theory, while the proportion of independent commissioners does not indicate a significant influence on ROA and ROE due to its compliance with regulations only for the formality, while the number of audit committees has a significant positive effect on the company's financial performance because the directors and management feel that there are supervisors who pay attention to their performance so that in carrying out the business of the company they make careful decisions and report the results of their performance honestly and transparently. Size or company size has a significant negative effect on company performance as measured by ROA and ROE because total assets cannot be maximized by the meangement to increase the Company's profits. The age of the company has a significant positive effect on ROA and ROE because the company increasingly understands business risks and can find appropriate ways to raise up the Company's profits. Leverage has a significant positive effect where the Company keeps trying his best to maintain good performance in the presence of creditors and use its debt efficiently and effectively in generating Company profits