THE EFFECT OF GOOD CORPORATE GOVERNANCE ON PROFITABILITY

Abstract

This study aims to analyze the influence of the board of directors, audit committee, independent commissioners, and risk management committee on profitability. The study was conducted using quantitative methods through panel data regression analysis to examine the influence of independent variables on the dependent variable. The data used was sourced from the financial statements of non-cyclical consumer industry companies in the food and beverage sub-sector listed on the Indonesia Stock Exchange in 2021-2023. The sample size was 52 non-cyclical consumer industry companies in the food and beverage sub-sector listed on the Indonesia Stock Exchange in 2021-2023, obtained from population elimination using a purposive sampling method. Panel data regression was performed using the Eviews application. The results of this study indicate that of the four hypotheses, only hypothesis 3 is accepted because the results indicate that independent commissioners have a significant positive effect on profitability. Hypothesis 4 is not accepted because the results indicate that the audit committee has a significant negative effect on profitability. Hypotheses 1 and 4 are not accepted because the results indicate that the board of directors and risk management committee have no effect on profitability. The results of this study are expected to broaden readers' insight and become evaluation material and a basis for decision-making by several parties.