THE ROLE OF DIGITALIZATION IN MODERATING THE EFFECT OF CORPORATE GOVERNANCE ON A BANK’S FINANCIAL PERFORMANCE
DOI:
https://doi.org/10.20961/btf35p56Keywords:
Corporate governance, digitalization, banking sector, financial institutionsAbstract
This study examines the moderating role of digitalization in the relationship between corporate governance mechanisms and bank performance in banking companies listed on the IDX during 2013–2023. Using panel data regression with random-effect models and robust clustered standard errors, the findings reveal that board size and ownership concentration negatively affect financial performance (ROE), while audit committee size has a positive influence. The study also finds that digitalization reduces the negative effects of large boards and concentrated ownership structures, indicating that higher levels of digital integration can enhance governance effectiveness and improve bank performance. Overall, the results suggest that digital transformation plays an important role in strengthening corporate governance and supporting better financial outcomes in the banking sector.
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