Does debt moderate the impact of family commissioner boards on company performance in Indonesia?

Q1 Social Sciences

Problems and perspectives in management Pub Date : 2023-12-15 DOI:10.21511/ppm.21(4).2023.47

Said Musnadi, Mahdani Ibrahim, Sofyan Idris

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Abstract

This study aims to investigate the influence of family commissioner boards (FCBs) on the operational efficiency of companies in Indonesia that use debt as a control tool, which includes bank and non-bank debt. Using the two-step GMM-First Difference estimation method, the research sample consists of 121 family-owned companies using unbalanced panel data from 2009 to 2018. This investigation produces several significant findings. Firstly, the results of the analysis show that the presence of family representatives on the board of commissioners has a negative impact on overall company performance. These observations suggest that FCBs may prioritize the interests of family shareholders over minority shareholders, which indicates entrenchment behavior. Second, the analytical results reveal that debt plays a moderating role in the influence of FCB on company performance. Debt acts as a deterrent to entrenchment behavior, thereby improving firm performance. Third, the results of the analysis did not find significant differences in FCB entrenchment behavior between companies that have bank debt and companies that have non-bank debt. These findings have significant policy implications for regulatory bodies in Indonesia regarding the governance of family-owned companies. It is vital to establish a mechanism for appointing family members to the board of commissioners that protects the interests of all shareholders and promotes a fairer corporate landscape.

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在印度尼西亚，债务是否会缓和家族委员会对公司业绩的影响？

本研究旨在调查印尼以债务（包括银行和非银行债务）作为控制工具的公司中，家族专员委员会（FCB）对其运营效率的影响。研究采用两步 GMM-First Difference 估计法，使用 2009 年至 2018 年的非平衡面板数据，研究样本包括 121 家家族企业。这项调查得出了几个重要发现。首先，分析结果表明，董事会中家族代表的存在对公司整体绩效有负面影响。这些观察结果表明，FCB 可能会优先考虑家族股东的利益，而不是小股东的利益，这表明存在固化行为。其次，分析结果表明，债务在功能性商业银行对公司业绩的影响中起着调节作用。债务对 "巩固行为 "起到了抑制作用，从而提高了公司绩效。第三，分析结果没有发现拥有银行债务的公司与拥有非银行债务的公司在 FCB 巩固行为上存在显著差异。这些发现对印尼监管机构有关家族企业治理的政策具有重要意义。至关重要的是，要建立一种任命家族成员进入董事会的机制，以保护所有股东的利益，促进更公平的公司格局。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Problems and perspectives in management Social Sciences-Law

CiteScore

2.90

自引率

0.00%

发文量

152

审稿时长

11 weeks

期刊介绍： The purpose of the journal is coverage of different aspects of management and governance, such as international organizations and communities’ management, state and regional governance, company’s management, etc. The key aspects of planning, organization, motivation and control in various areas and in different countries are subject of the journal''s scope. The journal publishes articles, which are focused on existing and new methods, techniques and approaches in the field of management. It publishes contemporary and innovative researches, including theoretical and empirical research papers.