Implementation of good corporate governance mechanisms on family firm performance in Indonesia

• Main Authors: Robin, ,, Amran, Noor Afza
• Format: Article
• Published: American Scientific Publishers 2016
• Subjects: HD28 Management. Industrial Management
• Online Access: http://repo.uum.edu.my/20867/; https://doi.org/10.1166/asl.2016.6635

The aim of this study is to examine the relationship of good corporate governance on family firms’ performance in Indonesia.This study used 125 of family companies on Indonesia Stock Exchange from 2010 to 2014 as a sample size.This study contributes to literature on family corporate governance and firm performance. Empirical evidence leads the family corporate governance and firm performance with mixed results.This study focuses of companies who have at least 20% shareholders or more which own by families.The findings reveal that board size and debt has a positive relationship with family firm performance.Larger board size is give more resource and has high solving problem capabilities than smaller board of director.However, board commissioner of independent does not contribute to firm value.Further, manager who has high portion managerial ownership would lead these managers concern on personal interest rather than firm’s interest.Next, Debt help financial problem in companies while running the business and achieve the high performance and small size of company enhance the firm performance.Further, this finding is to enrich the literatures on family corporate governance and firm performance especially in Indonesia.