Study of Corporate Governance and Company Growth : In Manufacturing Companies Listed In Bei for the Year Ended 2013

Abstract

This paper studied a life cycle analysis was performed to identify differences in corporate governance characteristics of “initial growth”, “maturity” and “revival” firms, since third groups face the same challenge of dealing with increasing sales, customers, product and innovation. The population consisted of 147 manufacturing companies listed in Indonesia Stock Exchange. Sample consisted of 42 manufacturing companies using purposive technique. Data collection was done by analyzing the financial statements and note to financial statements. The result indicate that initial growth firms had lower corporate governance scores when compared to other firms. Revival firms showed higher scores, indicating that a well developed system of corporate governance added a much needed synergy for growth. Finally, a regression analysis indicated that certain fundamental characteristics such as Board Structure, Audit Committee role and disclosure were equally well for growth and revival firms, but other corporate governance features such as Board Operation and Effectiveness were much better elaborated for revival firms.