INTELLECTUAL CAPITAL, CORPORATE PERFORMANCE AND CORPORATE GOVERNANCE AS MODERATING VARIABLE

Abstract

Agency theory is a theory that explains the relationship between principal and agent in business. The main concern of this theory lies in how to solve problems that arise from agency relationships because of the inconsistency of objectives or differences in the assessment of a business risk. This problem can arise when the agent is motivated to take an action for his interests which is contrary to what he should have done or expected by the principal. This situation is commonly called moral hazard. Intellectual capital can reduce conflict because smart people may not necessarily increase the value of the company. But in reality high intellectual capital can cause high fraud and consequently make the company's performance not good. Therefore, corporate governance is needed to be able to report and monitor transparency carried out by intellectual capital and can reduce the occurrence of moral hazard. This study aims to examine and analyze the influence of intellectual capital on corporate performance and to examine and analyze the effect of corporate governance on the relationship between intellectual capital and corporate performance. This research is a type of research with hypotheses, using quantitative approaches and secondary data taken from the Indonesia Stock Exchange. The population used in this study are companies listed on the Indonesia Stock Exchange (IDX) according to the criteria of the study sample. The results showed that the intellectual capital variable with firm performance had a positive effect while the intellectual capital and corporate governance variables as moderating variables on firm performance had no effect. For size and der control variables there is a positive influence on company performance