Does the Good Corporate Governance Approach Affect Agency Cost?

Abstract

This research has the objective to determine the effect of corporate governance on the agency
cost to the consumer goods industry sector companies listed on the Indonesia Stock Exchange
2015-2019 period. The independent variable used in this study is corporate governance
consisting of institutional ownership, managerial ownership, the board of commissioners, the
board of directors, and the audit committee. While the dependent variable used in this study
is agency cost. The data used in this study are secondary data by taking a population of 36
companies and a sample of 17 companies in the consumer goods industry. This research uses
the data analysis method, the classical assumption test, and multiple linear regression. The
results of this study indicate that managerial ownership and the board of commissioners have
a positive influence on agency costs. However, institutional ownership, the board of
directors, and audit committee variables do not affect agency costs.