The Effect of Good Corporate Governance and Sustainable Finance on Financial Performance in Banking Companies Listed on the Indonesia Stock Exchange 2018-2024 (Indonesian Journal of Multidisciplinary on Social and Technology)

Summary

• The study selected 5 private banking companies resulting in 35 observation data points from an initial population of 48 listed banks on the Indonesia Stock Exchange for the 2018–2024 period.p.5
• Bank Central Asia consistently recorded the highest Return on Equity in the sample, rising from 17.04% in 2018 to 20.87% in 2024.p.2
• Bank Permata registered the lowest Return on Equity in the sample at 2.06% in 2020 before recovering to 8.37% in 2024.p.2
• The Independent Board of Commissioners had no significant partial effect on Return on Equity with a t-value of 0.653909 compared to the t-table value of 2.03951.p.1
• The Audit Committee showed no significant partial effect on Return on Equity with a t-value of 0.166927 against the t-table value of 2.03951.p.1
• Sustainable Finance proxied by Corporate Social Responsibility showed no significant partial effect on Return on Equity with a t-value of 1.788619 versus the t-table value of 2.03951.p.1
• Simultaneously, the Independent Board of Commissioners, Audit Committee, and Sustainable Finance significantly affected Return on Equity with an F-value of 21.14774 exceeding the F-table value of 2.91.p.1

Key insights

1. The Adjusted R-squared value of 0.805752 indicates that the three independent variables explain 80.57% of the variation in Return on Equity.p.1
2. Factors outside the research model account for the remaining 19.43% of the variation in financial performance.p.1
3. Bank Central Asia consistently achieved the highest Return on Equity among analyzed private banks, rising from 17.04% in 2018 to 20.87% in 2024.p.2
4. Bank Permata hit a low Return on Equity of 2.06% in 2020 before rebounding to 8.37% in 2024.p.2
5. Purposive sampling reduced the initial population of 48 listed banking companies down to a sample of 5 banks yielding 35 observation data points.p.5
6. In partial testing, the Independent Board of Commissioners produced a significance value of 0.5187, exceeding the 0.05 threshold.p.7
7. The Audit Committee variable yielded a significance value of 0.8687, indicating no statistically significant individual impact on Return on Equity.p.7
8. Sustainable Finance proxied by CSR disclosure yielded a significance value of 0.0849, showing no statistically significant partial effect on Return on Equity.p.7
9. Simultaneously, all three independent variables exerted a statistically significant influence on Return on Equity with a probability value of 0.000000.p.7