The Impact of Corporate Governance on Firm's Performance with Capital Structure as an Intervening Variable

This study aims to analyze the effect of corporate governance towards financial performance using return on assets (ROA) with capital structure (C) as an intervening variable in the manufacturing industry which were listed in Indonesia Stock Exchange (BEI) from 2012 to 2016. The number of final samples exercised were 68 entities with 340 observations and the multiple regression is opted for assessing the dependent and independent variables. Based on the models, there are two findings, where the first finding suggests that ownership concentration (OWNCON) and independent director (DIRIND) variables have negative effect towards Long-Term Debt (LTD) while board of director size (BSIZE) has positive impact on the LTD. Further, director ownership (DIROWN), business size (BSIZE), risk, and growth variables do not attest the correlation with LTD. The second finding manifests that LTD variable has negative impact on ROA, however, liquidity (LIQ) and AGE variables are positively correlated with ROA. The authors have the belief that by including more independent variables or secondary data in the future research will affect the research finding.