Good corporate governance, compliance, and financial performance
Risk management as a mediating variable
Keywords:
Corporate Governance, Number of Directors, Number of Commissioners, Level of Compliance, Return on AssetAbstract
This study aims to determine, test and analyze the effect of Corporate Governance (number of directors and number of commissioners), level of compliance (NPL correction) and risk management (NPL) on financial performance (ROA), and examine the role of risk management (NPL) as a mediating variable in the relationship between Corporate Governance and level of compliance on financial performance at BPR BKK in Central Java Province during the period 2019 - 2023. This study uses multiple regression analysis methods and Sobel tests, with 34 BPR BKK research objects and 33 BPR BKK samples. The results of the study show that simultaneously, the number of directors, the number of commissioners, the level of compliance and risk management have a significant effect on financial performance. Partially, only the number of directors and the number of commissioners have a significant positive effect on financial performance, while risk management (NPL) has a significant negative effect. Furthermore, simultaneously the number of directors, the number of commissioners and the level of compliance also have a significant effect on risk management (NPL), but partially only the number of directors has a significant negative effect. Meanwhile, risk management (NPL) is unable to mediate the influence of the number of directors, number of commissioners and level of compliance on financial performance.
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