Relationship of Proportion Independent Commissioners on Company Risk and Management Risk Committee as a Moderation

Abstract

The objective of this paper is looking for correlation of both proportion independent commissioners and presence of a risk management committee (RMC) which influences company risk. Company risk, proxy in trade accounts receivable and inventories. Accounts receivable and inventories have a possibility of errors in valuation, which can increase financial reporting risk. The samples used manufacturing industries, various industrial sectors; automotive sub-sectors ten numbers that listing on IDX or Indonesia Stock Exchange based on the outcome of purposive sampling for 3 years of research namely 2015-2017. The data taken from financial annual report and logistic regression analysis. The outcome of the logistic regression describes that portion of independent commissioners are significantly definite related to company risk. RMC variable is proven to strengthen the influence of relation both of proportions independent commissioners on company risk.

Keywords: Risk Management, Independent Commissioners, and Automotive Industry

DOI: 10.7176/EJBM/11-21-10

Publication date:July 31^st 2019