ABSTRACT
This research focuses on corporate governance and its effect on the performance of banks operating in Indonesia. This research was conducted using secondary data obtained from Infobank (2015). Overall there were 99 banks evaluated. The research variables were Net Interest Margin (NIM), Good Corporate Governance composite profile (GCG_CG), Return on Assets (ROA), Return on Equity (ROE) and Profit Growth (PrGrowth). The independent variable was the bank’s Good Corporate Governance composite profile (GCG_CG). The dependent variables were NIM, ROA, ROE, and PrGrowth. Tests were conducted on the hypotheses, which stated that corporate governance has a significant positive correlation on each of the dependent variables and corporate governance has a significant positive effect on each of the dependent variables. Tests were performed using Correlation Analysis and Simple Regression Analysis after seeking the fulfillment of the assumptions. The correlation coefficient obtained stated that Good Corporate Governance composite profile was significant negative correlated with variable NIM. Good Corporate Governance composite profile showed a significant negative effect on the NIM of banks at 10% Type I error. The research findings did not support the research hypotheses.
