Volume 3, Number 14, December 2022 e-ISSN: 2797-6068 and p-ISSN: 2777-0915
THE
EFFECT OF IMPLEMENTING CORPORATE GOVERNANCE AND HUMAN RESOURCES COMPETENCE ON
FINANCIAL LACKS
ISB Atma Luhur, Indonesia
Email: [email protected]
|
KEYWORDS Good Corporate Governance, Human Resource
Competence, Financial Lacks |
ABSTRACT Companies need to make efforts to organize the company to avoid a
decline in the company's financial condition which causes bankruptcy,
including the implementation of Good Corporate Governance and the existence
of qualified human resource competencies in the company. This study aims to
determine the effect of implementing good corporate governance and human
resource competence on financial lacks. This study uses a quantitative
research method with a descriptive approach. Data collection techniques in
this study used questionnaires and literature studies. The research data were
then analyzed using the SPSS program. The results of the study show that the
implementation of good corporate governance has a negative effect on
financial lacks and the competence of human resources has a negative effect on financial lacks |
INTRODUCTION
A
company definitely wants a longlife cycle. In the
midst of increasingly fierce global competition, every company must have a way
to survive and compete in the market. Based on the new concept of the business
world, a company is not only profit-oriented, more than that, the company's
main goal is to create value or value in order to achieve a competitive
advantage (Nasution, 2021). Therefore, the role of managers in
managing a company is very important because it is related to the
sustainability and success of a company.
In
a company it is important to have the role of corporate governance or corporate
governance (CG) which affects the quality of the company. According to Yeh and
Lee in (Fajaryati, 2017) it also shows that a weak corporate
governance relationship is a company that has a condition of financial lacks,
the possibility of a company going bankrupt and a company that has a healthy
financial status condition has strong corporate governance. Akmal in (Aryani, 2019) his research shows that the low
commitment to implementing the principles of Good Corporate Governance (GCG) is
also closely related to the level of risk faced by the company. Companies that
have good information systems can even be faced with failure if the principles
of governance do not work properly. This reflects that risk and GCG
implementation are closely related. This means that the two components, GCG and
risk require synergistic steps in implementing and overcoming them.
Competence
of Human Resources (HR) in this case also needs to be considered because it
plays an important role in the sustainability of the company. Therefore, human
resources who have high competence are needed because high competence will be
able to support increased employee performance (Fadhil, 2016). This is supported by the statement of
Brigham and Daves (2003) in (Sopyan, L. A. N., Dadan Soekardan, 2022) which states that inaccurate decisions
and interconnected weaknesses can affect both directly and indirectly the
company's management as well as a lack of monitoring efforts against financial
condition so that the use of company funds is not in accordance with what is
needed. Companies need to make efforts to organize the company to avoid a
decline in the company's financial condition which causes bankruptcy, including
the implementation of Good Corporate Governance and the existence of qualified
human resource competencies in the company. Based on this research background,
researchers are interested in conducting research with the title " The Effect of Implementing
Corporate Governance and Human Resources Competence On
Financial Lacks".
Good Corporate
Governance
In
a company it is important to have the role of corporate governance or corporate
governance (CG) which affects the quality of the company. The implementation of
good CG commitments is hereinafter referred to as Good Corporate Governance
(GCG). According to Kaihatu in (Romdhoni, 2015) Good corporate governance (GCG) is
definitively a system that regulates and controls companies that create added
value (value added) for all stakeholders (Monks, 2013). There are two things that are
emphasized in this concept, first, the importance of the rights of shareholders
to obtain information correctly and in a timely manner and, secondly, the
company's obligation to disclose accurately, on time, transparently on all
information on company performance, ownership, and stakeholders. GCG has five
basic principles that are strengthened in the Regulation of the State Minister
for State-Owned Enterprises Number: PER-01/MBU/2011 including transparency,
accountability, responsibility, independence and fairness which are considered
to be able to create a business ecosystem that is clean and with integrity (Arif, 2020).
Human Resource
Competency
The
need for skilled workers in various fields is a global world demand that cannot
be postponed, and are required to have the ability to plan quality human
resource development by making internal improvements through human resource
development. This improvement in internal conditions also aims to strengthen
itself and increase resilience in facing increasingly fierce competition. This
means that agencies must improve the performance of their agencies through
improving the performance of their employees. Therefore, human resources who
have high competence are needed because high competence will be able to support
increased employee performance (Fadhil, 2016). According to Dobois
in (Azmy, 2015) competence is a characteristic that
individuals have abilities and are used in a consistent manner appropriate to
achieve the desired performance. These characteristics include knowledge,
skills, aspects of self-image, social motives, traits, mindset and way of
thinking, feeling, and implementation. Human resources are very important in
carrying out tasks and carrying out organizational functions. Human resources
can affect the success of a management within an organization, as stated by
Mathis who stated that the value of human resources is influenced by the use of
abilities or skills (competencies) possessed by humans when carrying out a job
to the maximum extent possible regardless of background to develop competence.
them (Umaira & Adnan).
Financial lacks
Financial
lacks is a stage of decline in the company's financial
condition. Bad financial lacks will result in company bankruptcy (Putri & Merkusiwati, 2014). According to Ramadhani
and Lukviam in (Silanno & Loupatty, 2021) Financial lacks
can be experienced by all companies, especially if the economic conditions in
the country where the company operates experience an economic crisis. To
overcome or minimize the occurrence of bankruptcy in the company, management
must supervise the company's financial condition by using financial statement
analysis. Financial statement analysis is an important tool for obtaining
information about a company's financial condition. Financial analysis has 2
main tools that can be used, namely: ratio analysis and cash flow analysis. (Pongoh, 2013). Both of these tools can be used by
management and other interested parties in the company to assess the extent to
which the success achieved by the company from the strategies implemented and
also what failures have occurred. If the company's financial condition appears
to be declining, management should start being careful, because such conditions
can lead to financial lacks.
RESEARCH METHOD
This research uses quantitative research methods. The quantitative
research method is a research method that is based on positivistic (concrete
data), research data in the form of numbers that will be measured using
statistics as a calculation test tool, related to the problem under study to
produce a conclusion (Sugiyono, 2019).
The
population in this study were all employees at the Syntax Corporation Indonesia
office. This study took 30 samples from the population based on advice from (Kerlinger, 2016) which suggested a
minimum sample size of 30. The sampling technique is random sampling, which is
sampling members of the population on a regular basis regardless of the strata
in the population. This method is carried out when members of the population
are considered homogeneous (Garaika & Darmanah, 2002).
The data collection technique was carried out in this
study using a questionnaire in the form of Google Docs which was distributed to
the sample. While the instrument testing in this study used the validity and
reliability tests using the help of IBM SPSS software. Because of this, it
allows researchers to obtain respondents according to the amount generated.
Implementation of Good Corporate Governance
(X1) Human Resources Competency (X2) Financial lacks (Y)
H1: Implementation of Good Corporate Governance has a
negative effect on financial lacks
H2: Human Resource Competence has a negative effect on
Financial lacks
H3: Implementation of Good Corporate Governance and
Competence of Human Resources together have a negative effect on Financial lacks.
RESULTS AND DISCUSSION
Validity test
The
validity test is intended to test how well the research instrument measures the
concept that should be measured. The validity test was carried out by
calculating the correlation between the score of each item and the total score
so that the Pearson Correlation value was obtained (Matondang,
2009). The results of the validity test can be seen in Figure 1:
Figure 1
Validity test
Based
on the data in Figure 1, it can be seen that all instruments have a Pearson
correlation value greater than r Table = 0.361 (N=30) and a Sig. (2-tailed) the
correlation for all items is less than 0.05 so it can be concluded that all
statement items are declared valid.
Reliability Test
Reliability
is an index that shows the extent to which a measuring device can be trusted or
relied on. This shows the extent to which the measurement results remain
consistent when done twice or more for the same symptoms, using the same
measuring instrument (Widi, 2011). According to Kendra, a measuring instrument
is said to be reliable if it produces the same results even though measurements
are made many times (Sugiyono,
2021). The criterion used
is a construct or variable that is said to be reliable if it gives a Cronbach
Alpha value > 0.600. The results of the reliability test are presented in
Table 1 below
Table 1
�Uji Reliabilitas
|
No. |
Variable |
Cronbach
Alpha |
Information |
|
1 |
Implementation
of GCG (X1) |
0.654 |
Reliable |
|
2 |
HR
Competence (X2) |
Reliable |
|
|
3 |
Financial
lacks (Y) |
Reliable |
Multiple
linear regression analysis aims to find out and predict whether the independent
variable (X) has an effect on the dependent variable (Y) and how much influence
the three independent variables have on the dependent variable (Y) in this
study (Yusuf, 2017).
Based
on the results of this analysis, a significance value of 0.153 > 0.05 is
obtained, so that partially it can be concluded that the implementation of Good
Corporate Governance (X1) has a negative effect on Financial
lacks (Y).
Based
on the results of this analysis, a significance value of 0.067 > 0.05 is
obtained, so that partially it can be concluded that Human Resource Competence
(X2) has a negative effect on Financial lacks (Y).
Based on the results of this analysis, a significance
value of 0.148 and 0.308 > 0.05 is obtained, so simultaneously it can be
concluded that the Implementation of Good Corporate Governance (X1) and Human
Resource Competence (X2) together have a negative effect on Financial
lacks (Y).
CONCLUSION
Based on the background of these problems, it can be
concluded as follows:
The
implementation of Good Corporate Governance has a negative effect on financial lacks
Human
Resource Competence has a negative effect on Financial
lacks
Implementation
of Good Corporate Governance and Competence of Human Resources together have a
negative effect on Financial lacks.
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