The Effect of Managerial Ownership and Good Corporate Governance on Bank Performance in Banking Companies Listed on the Indonesia Stock Exchange

Abstract

This study examines the effect of managerial ownership and Good Corporate Governance (GCG) on bank performance in banking companies listed on the Indonesia Stock Exchange (IDX) for the period 2019–2024. Bank performance is proxied by Return on Assets (ROA) and Net Interest Margin (NIM). GCG is measured through independent commissioner proportion, audit committee size, and institutional ownership. This study uses panel data regression with the Fixed Effect Model applied to 16 banking companies observed over six years, producing 96 firm-year observations. Results show that managerial ownership has a positive and significant effect on both ROA and NIM. Independent commissioner proportion has a positive and significant effect on ROA, while audit committee size has a negative and significant effect on both ROA and NIM. Institutional ownership has a negative and significant effect on ROA but no significant effect on NIM. These findings support agency theory and signaling theory, confirming that managerial ownership and GCG mechanisms shape bank performance. The study contributes empirical evidence for banking governance policy in Indonesia.