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Original Research

COMPARISON OF MEASUREMENT OF PRINCIPLES AND GOOD CORPORATE GOVERNANCE EVIDENCE

IDA BAGUS ANOM PURBAWANGSA, I GUSTI NGURAH BAGUS GUNADI, I PUTU MEGA JULI SEMARA PUTRA

Vol 15, No 11 ( 2020 )   |  DOI: 10.5281/zenodo.6548968   |   Author Affiliation: 1Lecturer at Management Department, Faculty of Economics and Business,Udayana University, Bali, Indonesia; Lecturer at Management Department, Faculty of Economics and Business, Mahasaraswati University of Denpasar, Bali, Indonesia; Lecturer at Accounting Department, Faculty of Economics and BusinessMahasaraswati University of Denpasar, Bali, Indonesia   |   Licensing: CC 4.0   |   Pg no: 1-14   |   Published on: 19-11-2020

Abstract

This paper aims to provide a comparison of measurements of Good Corporate Governance (GCG) against the value of companies in Indonesia. Two GCG measurements are used in this paper, namely measurement with GCG principles and measurement with GCG mechanism. These two measurements are compared and then concluded, which is better used to increase the company's value. Comparing GCG measurements using these two measurement tools has never been done before. Previous studies used one of these measurements. This paper uses quantitative research methods with factor analysis and regression. Factor analysis is used to determine which variable is the most dominant used in the GCG mechanism. GCG mechanism variables include the Independent Board of Commissioners, Institutional Ownership, and Managerial Ownership. Whereas GCG principles are measured using the GCG index issued by the Indonesian Good Corporate Governance Forum (FCGI). The results show that measurements using GCG principles provide better value in increasing company value. Finally, this paper can be used by companies as a recommendation in determining the measurement of corporate GCG, to increase company value in the eyes of stakeholders.


Keywords

Good Corporate Governance, GCG Principles, GCG Mechanism, Company’s Value.