Board of Directors The Influence Of Earnings Management On Firm Value And Good Corporate Governance As Moderating Variable: Empirical Studies Real Estate And Properties Companies Listed In Indonesia Stock Exchange Period 2012-2014
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in institutions. Institutions which mean the owner of a public company in the form of institutions, not on behalf of the owner of individual
private Sekaredi, 2011. The majority of institutions is a Limited Liability Company.
Ownership by institutional investors is likely to encourage more optimal monitoring the management performance, since share
ownership represents a source of power that can be used to support or otherwise of the management performance. Jensen and Meckling
1976 suggest that institutional ownership has a very important role in minimizing agency conflicts that occur between managers and
shareholders. According Barnae and Rubin 2005, institutional shareholders
with a large stake have an incentive to monitor corporate decision- making. The greater the institutional ownership will make sound
power and boost the institution to oversee the management and consequently will give greater impetus to optimize the value of the
company. In addition, ongoing surveillance of both managers and reduce agency costs.
The existences of institutional investors are considered capable of being an effective monitoring mechanism in any decision made by the
manager. This is due to the institutional investors involved in strategic decision-making is not easy to believe the earnings manipulation.
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According Cruthley 1999 who found that the monitoring is carried out institutions capable substitute agency costs, thus decreasing agency
costs and increase firm value. b. Managerial Ownership
Managerial ownership is ownership of shares of the company by a manager or in other words the manager as well as a shareholder
Christiawan and Tarin, 2007. According to Jansen and Meckling 1976 one way in order to reduce the conflict between the principal
and the agent can be done by increasing managerial ownership of a company. That means that managerial stock ownership in a company
will encourage pooling of interests between principal and agent so that managers act in accordance with the wishes of shareholders.
Managerial share ownership can also aligns the interests between managers and shareholders so that managers will be careful in taking
decisions because they directly share in the benefits and impact of the decisions of making the wrong decision Gelisha, 2011.
The greater the proportion of managerial stock ownership in the company, the managers tend to try harder and motivated to create the
optimal performance of the company because managers have an obligation to maximize the welfare of the shareholders, yet on the
other hand managers also have an interest to maximize their welfare Gelisha, 2011. The Manager will seek to reduce conflicts of interest