Board Effectiveness and Firm Performance, The Case of Islamic Banks

Qoriadi, Fazril (2010) Board Effectiveness and Firm Performance, The Case of Islamic Banks. Other thesis, Fakultas Ekonomi.

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Abstract

The measuring af previous of firm's performances is one of the best ways for all parties that are interesting to the firm to predict its performance. The case of this study is Board Effectiveness and ownership structure, in point of view corporate governance, of Islamic Banks in Indonesia. This research use book value approach to measure firm's performance that is influenced by board composition, where board composition of the firms consist of number of board of commissioners, independent commissioners, ond differences between majority and non majority shareholders. Firm's performance is represented by Return on Asset (ROA), Return on Equity (ROE), BOPO, and Net Interest Margin (NIM). This research is designed as descriptive analysis for sample 2004 - 2007. The analysis output validity tested by using coefficient of correlation and ANOVA model. The result of the analysis: 1) The number of board commissioners have significant influence to the Islamic BAnk's performance toward ROA, ROE and BOPO, except in NIM indicators 2) Proportion of Independent Commissioners have significant influence towards ROA, ROE, BOPO, except NIM indicators, 3) There is significant differences between majority shareholders toward non-majority shareholders towards ROA, ROE, except in BOPO and NIM indicators. Keywords: Corporate Governance, board efectiveness, independent commissioners, board size, Islamic Banking

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