| Summary: | This study examined the effect of the implementation of corporate
governance on the condition of the financial distress of manufacturing companies
listed on the Indonesia Stock Exchange (IDX). The implementation of corporate
governance proxied with the proportion managerial ownership, the proportion of
institutional ownership, the number of the boards of directors, the proportion of
independent commissioners, and the existence of the audit committee.
Samples used in this study is manufacturing companies listed on the
Indonesia Stock Exchange (IDX) with 2005 up to 2009 as an observation period.
The total study sample was 55 firms with 120 firm year are determined by the
method of purposive sampling. This study uses Logistic Regression to examine
the effect of the implementation of corporate governance of the condition of the
company's financial distress.
The results of this study indicate that the proportion of managerial
ownership, the number of the boards of directors, and the existence of the audit
committee variable are not proven to have significant influence on the condition
of the company's financial distress. The proportion of institutional ownership and
the proportion of independent commissioners variable proved to have a significant
influence on the condition of the company's financial distress with a positive
influence.
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