Anindya Ardiansari, - THE EFFECT OF BOARD OF COMMISSIONERS AND INDEPENDENT COMMISSIONERS ON AGENCY COST THROUGH CAPITAL STRUCTURE. Management Analysis Journal.

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Abstract

Different interests between managers and shareholders can emerge agency conflicts resulting in agency costs. The aim of this study is to determine the effect of the board of commissioners and independent commissioners to agency cost through capital structure. This study was conducted on companies incorporated in the LQ45 Index listed on the BEI 2012-2016. The number of samples based on purposive sampling method is 24 companies or 120 analysis units. Multiple regression analysis and path analysis using Eviews 9 were used for methods of data analysis. The results showed that the board of commissioners have a positive and insignificant effect on capital structure, while independent commissioners have a positive and significant effect on capital structure. The capital structure has a negative and significant effect on the agency cost proxied by asset utilization ratio, the board of commissioners has a negative and insignificant effect on the agency cost proxied by asset utilization ratio, whereas the independent commissioner has a positive and significant effect on the agency cost proxied by asset utilization ratio. By using path analysis, capital struc- ture is unable to mediate the effect of the board of commissioners and independent commissioners against agency cost.

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