The effect of ROA, independent commissioner, dividend policy and board gender on the financial performance of companies listed in IDX ESG leader on IDX

Abstract

In supporting the success of a sustainable economy, environmental issues have become an important consideration in corporate decision making. The launch of IDX ESG Leader, which is an Index to measure the price performance of stocks that have good Environmental, Social, and Governance (ESG) assessments and are not involved in significant controversies and have good transaction liquidity and financial performance, is one indicator of the importance of involving this aspect. This study uses panel data to test the determinants of profitability in companies listed in IDX ESG Leader on the Indonesia Stock Exchange. The independent variables consist of profitability, dividend policy, and independent commissioner (IP) and Gender Board. The dependent variable is the profitability of the company as measured by TobinQ. The research sample is all companies listed in the IDX ESG Leader on the Indonesia Stock Exchange in 2020-2022. The data analysis technique uses panel data regression analysis with Stata. The stages of analysis include: (a) declaration of panel data; (b) Common Effect (PLS), Fixed Effect (FEM), and Random Effect (REM) model estimation; (c) Selection of appropriate models; (d) Test classical assumptions; and (e) Interpretation of results. The test results show that the most appropriate estimation model used is the Random Effect (REM) model. The result indicates that Profitability matters positively to financial performance. Commissioner's independent negative effect on financial performance. Board gender and policy dividends do not influence the financial performance