Literature Review: The Effect of Good Corporate Governance on Corporate Financial Performance

Atikah Zuhra Sitorus; Dini Rahma Aliyah; Mudtiani Hakim Br. Bangun; Renny Maisyarah

doi:10.47134/jampk.v2i4.680

Authors

Atikah Zuhra Sitorus Universitas Pembangunan Panca Budi
Dini Rahma Aliyah Universitas Pembangunan Panca Budi
Mudtiani Hakim Br. Bangun Universitas Pembangunan Panca Budi
Renny Maisyarah Universitas Pembangunan Panca Budi

DOI:

https://doi.org/10.47134/jampk.v2i4.680

Keywords:

Good Corporate Governance, Financial Performance, Board of Directors, Audit Committee , Independent Commissioner, Institutional Ownership, Managerial Ownership

Abstract

This study aims to analyze the effect of Good Corporate Governance (GCG) on the company's financial performance. GCG functions as a system that organizes and manages companies to create added value for all stakeholders. This research uses a qualitative method with a literature review approach, which collects and analyzes various academic sources and related publications. The research findings show that the board of directors has a positive and significant impact on financial performance, while the influence of independent commissioners and managerial ownership shows mixed results. In contrast, the effect of audit committees on financial performance is inconsistent, with some studies showing that there is no significant effect. Overall, the effective implementation of GCG is crucial to improving a company's financial performance and attracting investors' attention.

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