Determinant Factors of Corporate Governance on Company Performance: Mediating Role of Capital Structure

The purpose of this study is to investigate the role of capital structure as mediating variable in the relationship between corporate governance and company performance. Data for this study was obtained from financial statements and was done in Indonesia's non-financial sector. From among the companies listed on the Indonesia Stock Exchange between 2017 and 2021, 15 companies were chosen as a sample. Findings show that corporate governance (board independence, board size, and audit committee) were significantly associated with capital structure and company performance, but gender diversity has an insignificant relationship with capital structure and company performance. Moreover, this research found that capital structure is not able to mediate the effect of corporate governance (board independence, board size, audit committee, and gender diversity) on company performance.

Automated summary

The aim of this study is to examine the role of capital structure as a mediating variable in the relationship between corporate governance and company performance. Data was collected from financial statements of non-financial sector companies in Indonesia. A sample of 15 companies was selected from those listed on the Indonesia Stock Exchange between 2017 and 2021. The findings indicate that corporate governance factors, such as board independence, board size, and audit committee, are significantly related to capital structure and company performance, while gender diversity has no significant relationship with capital structure and company performance. Additionally, the study concludes that capital structure does not mediate the impact of corporate governance factors (board independence, board size, audit committee, and gender diversity) on company performance.