Audit Committee, Ceo Tenure And Capital Structure
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Master of Science in Management
Abstract
The purpose of this paper is to examine the relation between corporate governance and capital structure with moderation effect of CEO tenure in manufacturing firms listed on the Indonesia Stock Exchange. The data is acquired from the firm's annual report published in the 2013-2017 period uses multiple linear regression model and moderated regression analysis. The dependent variable in this research is capital structure measured by ratio of total debt to total assets. Independent variables used corporate governance which is measured by audit committees while moderating variable is CEO tenure. The novelty of this research examines CEO tenure as moderation variables on the influence of audit committees on capital structure which is rarely studied. The results showed that CEO tenure weakens the positive effect of audit committees on capital structure. The results of this study can help the firms to pay attention to the corporate governance and CEO tenure because they can affect the firm’s capital structure policy.
Keywords - Capital Structure; Corporate Governance; Audit Committee; CEO TenureReferences
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[2] Anderson, R. C., Mansi, S. A., & Reeb, D. M. (2004). Board Characteristics, Accounting Report Integrity, and the Cost of Debt. Journal of Accounting and Economics, 37(3), 315-342.
[3] Brealey, R.A., Myers, S.C, & Allen, F. 2006. Principles of Corporate Finance. 8th Edition. International Edition. New York: McGraw Inc.
[4] Detthamrong, U., Chancharat, N., & Vithessonthi, C. (2017). Corporate Governance, Capital Structure and Firm Performance: Evidence from Thailand. Research in International Business and Finance, 42, 689-709.
[5] FCGI. 2001. Seri Tata Kelola Perusahaan (Corporate Governance). Edisi Kedua. Jakarta.
[6] Jensen, M.C., & Meckling, W.H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.
[7] Kieschnick, R., & Moussawi, R. (2018). Firm Age, Corporate Governance, and Capital Structure Choices. Journal of Corporate Finance, 48, 597-614.
[8] KNKG. (2006). Pedoman Umum Good Corporate Governance Indonesia.
[9] Lardon, A., Deloof, M., & Jorissen, A. (2017). Outside CEOs, Board Control and The Financing Policy of Small Privately Held Family Firms. Journal of Family Business Strategy, 8(1), 29-41.
[10] Matemilola, B. T., Bany-Ariffin, A. N., Azman-Saini, W. N. W., & Nassir, A. M. (2018). Does Top Managers’ Experience Affect Firms’ Capital Structure?. Research in International Business and Finance, 45, 488-498.
[11] Morellec, E., Nikolov, B. & Schürhoff, N. (2012). Corporate Governance and Capital Structure Dynamics. The Journal of Finance, 67(3), 803-848.
[12] Orens, R. & Reheul, A.-M. (2013). “Do CEO Demographics Explain Cash Holdings in SMEs?”. European Management Journal, 31(6), 549-63.
[13] POJK. Peraturan Otoritas Jasa Keuangan Nomor 55 /POJK.04/2015 Tentang Pembentukan dan Pedoman Pelaksanaan Kerja Komite Audit., (2015).
[14] Rahim, M. F. A., Johari, R. J., & Takril, N. F. (2015). Revisited note on corporate governance and quality of audit committee: Malaysian perspective. Procedia Economics and Finance, 28, 213-221.
[15] Salipadang, Welly., Jao, Robert. & Beauty. (2017). Pengaruh Mekanisme Good Corporate Governance Terhadap Ketepatan Waktu Penyampaian Laporan Keuangan dan Dampaknya Terhadap Return Saham. Dinamika Akuntansi Keuangan dan Perbankan, 6(1), 83-101.
[16] Sheikh, N. A., & Wang, Z. (2011). Determinants of Capital Structure: An Empirical Study of Firms in Manufacturing Industry of Pakistan. Managerial Finance, 37(2), 117-133.
[17] Setiawan, R., & Rachmansyah, A. B. (2019). Determinan Cash Holding Perusahaan: Studi Pada Perusahaan Manufaktur di Indonesia. Arthavidya Jurnal Ilmiah Ekonomi, 21(1), 95-115.
[18] Setiawan, R., & Sudiro, K. (2019). Struktur modal dan profitabilitas perusahaan anggota holding pt pupuk indonesia (PERSERO). Jurnal Ekonomi dan Bisnis, 23(1), 37-46.
[19] Setiawan, R., & Syarif, M. M. (2019). Kepemilikan Institusional, Kinerja Perusahaan, dan Efek Moderasi dari Kepemilikan Institusional Aktif. Business and Finance Journal, 4(1), 41-48.
[20] Sudana, I Made. 2015. Manajemen Keuangan Perusahaan Teori dan Praktik. Jakarta: Erlangga.
[21] Tarus, D. K., & Ayabei, E. (2016). Board Composition and Capital Structure: Evidence from Kenya. Management Research Review, 39(9), 1056-1079.
[22] Thanh, L. T. (2017). Corruption, Provincial Institutions and Capital Structure: New Evidence from a Transitional Economy. Organizations & Markets in Emerging Economies, 8(1).
[23] Ting, I. W. K., Azizan, N. A. B., & Kweh, Q. L. (2015). Upper Echelon Theory Revisited: The Relationship Between CEO Personal Characteristics and Financial Leverage Decision. Procedia-Social and Behavioral Sciences, 195, 686-694.
[24] UUPT. Undang-Undang Republik Indonesia Nomor 40 Tahun 2007 Tentang Perseroan Terbatas., (2007).
[25] Zhou, H., Owusu-Ansah, S., & Maggina, A. (2018). Board of directors, audit committee, and firm performance: Evidence from Greece. Journal of International Accounting, Auditing and Taxation, 31, 20-36.
