Abstract:
Objective: This study aims to determine the effect of governance practices and the degree of internationalization on companies in Indonesia and Malaysia. Research on governance in Indonesia is interesting because of its inconsistent law enforcement and the existence of dominant family ownership that can expropriate external shareholders. Research Design & Methods: This study uses a sample of manufacturing companies located in Indonesia and Malaysia. The study uses panel data using independent governance variables and degree of internationalization. Findings: The results showed that governance variables using the proxy of independent commissioners, the board size, and the presence of female commissioners influence financial performance. At the same time, governance as of a proxy for the frequency of board meetings does not affect financial performance. The degree of internationalization found results that also affect financial performance. Companies that enter the international market also need good governance. Implications & Recommendations: Practical implications, Investors are expected to consider corporate governance and internationalization aspects when investing. As the research results presented previously show, several variables, such as independent commissioners, commissioner size, and export ratio, also affect company performance. Investors, especially in Indonesia, are advised to invest in companies with the optimal number of independent commissioners to get maximum returns. In addition, investors are advised to choose companies with the optimal number of boards of commissioners to maximize company performance. Contribution & Value Added: The research contributes by using a combination of corporate governance and internationalization issues that can benefit the company and the national economy.
