Volume 29 Number 1, 2024

The Impact of the Board, Political Connections on Financial Distress in Indonesia: Effects of Corporate Governance

Rida Rahim ^*, Peni Anggriani, Nadya Ade Wiranda​​​​​​
Department of Management, Universitas Andalas, Padang, Indonesia
25166 Padang, West Sumatera, Indonesia
^* Corresponding author: ridarahim@eb.unand.ac.id
fenniangriani@gmail.com
nadyaaadewiranda@gmail.com

ABSTRACT

This paper analyzes the impact of political connection, interlocking directorates, and female directors on financial distress, and corporate governance as a moderating variable. The results showed that all variables had a significant effect on financial distress partially. Political connection, interlocking commissioner positions, and audit committees have a significant and positive effect. While the interlocking CEO, female director, audit committee and board size variables have a significant negative effect. After entering the moderating variable, the results indicate that the political connection and interlocking variables moderated by the audit committee had a positive impact to the financial distress. While the political connection and interlocking CEO variables have negative values after being moderated by board size. 

JEL Classification: G32, G34

Keywords: financial distress, political connection, interlocking directorate, female director, board size, audit committee

Cite this article: 

Rahim, R., Anggriani, P., Wiranda​​​​​​, N.A., 2024, The Impact of the Board, Political Connections on Financial Distress in Indonesia: Effects of Corporate Governance, International Journal of Business, 29(1), 001. https://doi.org/10.55802/IJB.029(1).001