Companies should pay attention to aspects of corporate governance

Oct 13, 2025 by windailys.com 92 views

The Effect of Corporate Governance, Company Size, and Ownership Structure on Risk Management in Property and Real Estate Companies Listed on the Indonesia Stock Exchange in 2013-2015

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a significant number of property and real estate companies listed on it. These companies play a crucial role in the country's economy, and their ability to manage risk is essential for their survival and growth. However, the effectiveness of risk management in these companies is influenced by various factors, including corporate governance, company size, and ownership structure. This study aims to investigate the effect of these factors on risk management in property and real estate companies listed on the IDX during the period of 2013-2015.

Background

Risk management is a critical aspect of corporate governance, and it is essential for companies to identify and manage risks that may affect their operations and financial performance. Various studies have been conducted on risk management in companies, but the results have been mixed. Some studies have found that corporate governance has a positive effect on risk management, while others have found that company size and ownership structure have a significant influence on risk management. Therefore, this study aims to re-test and provide a deeper understanding of the influence of these factors on risk management in property and real estate companies listed on the IDX.

Methodology

This study used a purposive sampling method to select 15 property and real estate companies listed on the IDX for observation over a period of three years (2013-2015). The data used in this study was obtained from the companies' annual reports, which can be accessed through the IDX website. The data was analyzed using descriptive statistical techniques and multiple regression analysis.

Research Findings

The results of this study indicate that partially, independent commissioners and audit committees have a significant positive influence on risk management. This suggests that the existence of an independent supervisor and effective audit can assist companies in identifying and managing risks that may be faced. However, the structure of ownership has a negative but not significant influence on risk management, which shows that certain types of ownership do not contribute directly to risk management.

Meanwhile, share ownership and company size do not show a significant effect on risk management. This finding is important to understand in the context of corporate governance, where the size of the company and the composition of ownership is not always a strong indicator of the company's ability to manage risk.

Discussion

The findings of this study have important implications for stakeholders, especially investors and company management. The results suggest that corporate governance, represented by independent commissioners and audit committees, has a significant positive influence on risk management. This implies that companies should pay attention to aspects of corporate governance in order to increase the effectiveness of risk management.

The study also found that the structure of ownership has a negative but not significant influence on risk management. This suggests that certain types of ownership do not contribute directly to risk management, and companies should not rely solely on ownership structure to manage risk.

Conclusion

This study provides important insights for stakeholders, especially investors and company management, to better understand how corporate governance can affect risk management. In the context of the Indonesian capital market, it is essential for companies to pay attention to aspects of corporate governance in order to increase the effectiveness of risk management. Thus, this research not only provides academic contributions, but also has practical implications that can be used by companies in carrying out their risk management activities in the future.

Recommendations

Based on the findings of this study, the following recommendations are made:

Companies should pay attention to aspects of corporate governance: Companies should pay attention to aspects of corporate governance, such as the existence of independent commissioners and audit committees, in order to increase the effectiveness of risk management.
Ownership structure should not be relied upon: Companies should not rely solely on ownership structure to manage risk, as the study found that certain types of ownership do not contribute directly to risk management.
Risk management should be a priority: Companies should prioritize risk management and take a proactive approach to identifying and managing risks that may affect their operations and financial performance.

Limitations

This study has several limitations that should be noted. Firstly, the study only focused on property and real estate companies listed on the IDX, and the findings may not be generalizable to other industries or companies. Secondly, the study used a purposive sampling method, which may not be representative of the entire population of property and real estate companies listed on the IDX. Finally, the study only analyzed data from 2013-2015, and the findings may not be applicable to other time periods.

Future Research Directions

This study provides a foundation for future research on risk management in property and real estate companies listed on the IDX. Future studies could investigate the following research questions:

How do other factors, such as industry and market conditions, affect risk management in property and real estate companies?
What are the specific risk management practices that are effective in property and real estate companies?
How can companies improve their risk management practices in order to increase their effectiveness?

By addressing these research questions, future studies can provide a more comprehensive understanding of risk management in property and real estate companies listed on the IDX, and can inform the development of effective risk management practices in these companies.
Frequently Asked Questions (FAQs) on the Effect of Corporate Governance, Company Size, and Ownership Structure on Risk Management in Property and Real Estate Companies Listed on the Indonesia Stock Exchange

Q: What is the main objective of this study?

A: The main objective of this study is to investigate the effect of corporate governance, company size, and ownership structure on risk management in property and real estate companies listed on the Indonesia Stock Exchange (IDX) during the period of 2013-2015.

Q: What are the key findings of this study?

A: The key findings of this study are:

Partially, independent commissioners and audit committees have a significant positive influence on risk management.
The structure of ownership has a negative but not significant influence on risk management.
Share ownership and company size do not show a significant effect on risk management.

Q: What are the implications of this study for stakeholders?

A: The implications of this study for stakeholders are:

Companies should pay attention to aspects of corporate governance in order to increase the effectiveness of risk management.
Ownership structure should not be relied upon as the sole means of managing risk.
Risk management should be a priority for companies.

Q: What are the limitations of this study?

A: The limitations of this study are:

The study only focused on property and real estate companies listed on the IDX, and the findings may not be generalizable to other industries or companies.
The study used a purposive sampling method, which may not be representative of the entire population of property and real estate companies listed on the IDX.
The study only analyzed data from 2013-2015, and the findings may not be applicable to other time periods.

Q: What are the future research directions based on this study?

A: The future research directions based on this study are:

Investigating the effect of other factors, such as industry and market conditions, on risk management in property and real estate companies.
Identifying specific risk management practices that are effective in property and real estate companies.
Developing effective risk management practices in property and real estate companies.

Q: What are the practical implications of this study for companies?

A: The practical implications of this study for companies are:

Companies should prioritize risk management and take a proactive approach to identifying and managing risks.
Companies should pay attention to aspects of corporate governance, such as the existence of independent commissioners and audit committees.
Companies should not rely solely on ownership structure to manage risk.

Q: What are the academic contributions of this study?

A: The academic contributions of this study are:

Providing a deeper understanding of the influence of corporate governance, company size, and ownership structure on risk management in property and real estate companies.
Contributing to the existing body of knowledge on risk management in companies.
Informing the development of effective risk management practices in companies.

Q: What are the potential applications of this study?

A: The potential applications of this study are:

Informing the development of risk management policies and procedures in companies.
Guiding the implementation of risk management practices in companies.
Providing a framework for evaluating the effectiveness of risk management practices in companies.