The Effect of Good Corporate Governance Mechanism and Investment Opportunity Set on Financial Performance

ABSTRACT: Banking financial performance was an illustration of the level of success achieved by banks in their operational activities. It is important for banks to maintain their financial performance so that it is even stable in order to survive and carry out its function as an intermediary institution. This study aims to obtain empirical evidence related to the influence of GCG mechanismsand IOS on the financial performance of banks on the Indonesia Stock Exchange 2014-2018. This research was conducted on all banking corporates listed on the Indonesia Stock Exchange in 2014-2018. The number of samples obtained was 65 with a purposive sampling method. The analysis technique used is multiple linear regression analysis. The results of this study indicate that the managerial ownership variable, the independent board of directors and the audit committee have a positive effect on financial performance. While institutional ownership and IOS variables have no effect on financial performance.
KEYWORDS:Financial Performance, Good Corporate Governance Mechanism, Investment Opportunity Set