Good corporate governance, firm performance and COVID-19

Abstract

Purpose – This research is designed to analyze the effectiveness of the audit committee, nomination and remuneration committee, and ownership structure on company performance and how COVID-19 moderates the influence of these governance mechanisms on company performance. Design/methodology/approach – 437 annual reports of Indonesian manufacturing companies from 2018 to 2021 were used as research samples using multiple regression analysis and moderated regression analysis. Findings – Good corporate governance plays a role in improving company performance. The presence of COVID-19 affects corporate governance, thereby reducing performance, but good corporate governance can limit this impact. Practical implications – This research helps companies understand the effectiveness of the supervisory function in improving company performance. This research provides input for companies, regulators, and policymakers to pay attention to good corporate governance, especially when facing a crisis. Originality/value – To my knowledge, research that examines corporate governance mechanisms and company performance related to COVID-19 and investigates whether COVID-19 moderates the influence of corporate governance mechanisms on company performance has never been conducted.

Keywords

• Audit committee
• Nomination remuneration committee
• Ownership structure
• Firm performance
• COVID-19
• Indonesia