69
value of return on assets will decrease by -0.062 assuming variables X1, X2 and X4 BOD, BOI and IO remain or unchanged.
5 Regression coefficient of variable X4 IO marked positive +0.019 it shows that the influences of the institutional ownership on the return on
assets is positive or parallel, which means that if the value of the institutional ownership variables change increased by one point, then the
value of return on assets will increase by +0.019, with assumption variables X1, X2 and X3 BOD, BOI and MO remain or unchanged.
5. Hypothesis Testing Result
a. Significant Partial Test T-Test
Statistical t-test performed to further investigate which of the independent variables in influencing the dependent variable. The hypothesis that will be
tested as follows:
Table 4.11 Partial Test Results T-Test
Model t
Sig. 1 Constant
2.352 .019
BOD 2.054
.041 BOI
-1.661 .098
MO -1.272
.204 IO
.735 .463
a. Dependent Variable: ROA
70
Source: Secondary Data Output From SPSS 18 Refer to Table 4.11, the results of significant test partial t-test are as follows:
1. The size of board of director BOD Variable H1 has a significance level 0.041 less than the significance
standard level 0.05. This shows that the board of director size has a significant influence on return on assets. Thus, the five hypotheses H1 which states that
the influence of the size board of director on the return on assets can be accepted.
These results are supported by the results of research Pearce Zahra 1992 cited in Faisal 2004 which states that an increase in the size of the
board of directors will provide benefits for the company, since the creation of networks with parties outside the company and ensure the availability of
resources, the board of directors of the company monitoring the the companies the best possible way to establish the purpose of the company, which
ultimately can help to improve the companys performance. These results also consistent with Febriyanto 2013, Amyulianthy 2012, Dalton et. al. 1999
finds the influence between Board of Directors size and company performance. According to the result research by Salleh et al. 2005. There
are evidence that larger board size tends to ensure that the management control of the company is strong. Consequently, it generates a positive
influence on the managers to mitigate the conflict of interest and personal interest and thus, able to ensure that the managers are strive to work for the
betterment of firm performance.The result are contrast with various previous
71
studies, including those conducted by Jensen 1993, Lipton and Lorsch 1992 found that there is no significant influence of board of directors size on
company performance. 2. The Board of Independent BOI
Variables H2 has a significance level 0.098 greater than the significance standard level 0.05. This shows that the board of Independent proved does
not has a significant effect on the return on assets. Thus, the five hypotheses H2 which states that the influence of board of director size on the return on
assets cannot be accepted. The result was supported by the research from Wijayanti Mutmainah
2012 which states that the board of independent directors are people who come from outside the company, this allows the knowledge of the board of
independent directors on the conditions and circumstances the company is also relatively limited, this causes the ineffective role of the board of
independent directors in improving corporate performance. And probably occur a situation where the board of directors and board of commissioners
that comes from inside the company are not overly considering the inputs given by the board of directors from outside the company, thereby causing
the lack of influence of the board of independent directors to the company performance. The result also consistent with various previous studies,
including those conducted by Francis, et al 2012; Mehran, 1995; Bhagat
Black, 2001. They found that there is no significant effect between board of independent and firm performance. But the result was contrast with research
72
done by Gani Jermias 2006 they found that board independence is tied to company performance by looking at different strategies. It is well known that
corporate performance and its relationship to the board need to be studied within the broader picture of the corporate structure and governance of a
country. One possibility is the institutional and corporate structure differences among the countries studied. For example, the level of ownership
concentration may influence the effectiveness of independent directors in monitoring firm performance Lawrence Stapledon 1999.
3. The managerial ownership Variable H3 has a significance level 0.204 greater than the significance
standard level 0.05. This shows that the managerial ownership does not have a significant influence on return on assets. Thus, the five hypotheses H4,
which states that, the influence of Managerial ownership on the return on assets are rejected.
The result was consistent with research done by Haryani et al. 2011 result, they find there is no effect between managerial ownership on company
performance in Indonesia caused by the structure of managerial ownership in Indonesia is still very small compared to the institutional ownership of
corporations listed on the Indonesia Stock Exchange. With small holdings, the managers do not feel they have the company so that the companys
performance. Thus, managerial ownership has not been able to be a mechanism that increases the company performance. There is another support
research result by Puspitasari Ernawati 2010 they found that, the increased
73
of managerial ownership in the company has a negative influence on the financial performance, this is because part of the manager who have a small
percentage of the share minorities will make the other shareholders majorities trying to monitor and influence the decision making by managers,
therefore, the decision becomes inflexible and slow. But the result was contrasted with research done by Ali, Salleh Hassan 2008 investigated the
factor influencing firm performance by considering only non-financial companies based on the reason that the financial sector is subject to certain
regulation and different from other industry. 4. The institutional ownership
Variable H4 has a significance level 0.204 is greater than the significance standard level 0.05. This shows that the institutional ownership
does not have a significant influence on return on assets. Thus, the five hypotheses H4, which states that, the influence of Institutional ownership on
the return on assets are rejected. The result was consistent with results from Ardy 2013, Hapsoro 2008
and Wulandari 2006 which found that institutional ownership does not affect the company performance because the majority owner of the institution
involved in the control of companies that tend to act in their own interests although sacrifice the minority owners. According To Modigliani 1958:290
existence asymmetries information between the shareholders with manager and cause that the company manager will be able to control of the company
because it has information that the financial statements more than the
74
shareholders, it will be easier manager control of the company in making a policy. So, with high institutional ownership cannot guarantee full monitoring
managers with maximum performances. The result was contrast with research conducted by Yonnedi and Yulia 2011, Zeitun and Tian 2007, Mahoney
and Roberts 2007 found that the institutional ownership has influence the firm performance measure by Return on Assets. Crutchley and Hansen 1999,
concluded that the larger institutional ownership can make effect a higher company performance. According to Shleifer and Vishny 1999 it is
suggested that institutional shareholders have an incentive to monitor the corporate decision-making. This will be positive for the company, both in
terms of improving the value of the company as well as improved performance business.
b. Simultaneous Significant Test f-test
