THE IMPACT OF INDEPENDENT DIRECTOR ON BOARD OF DIRECTORS ON FIRM'S PERFORMANCE EVIDENCE FROM INDONESIA

Independent directors and ownership concentration are two important things at corporate governance that affects the firm performance. Independent Directories considered capable to improve the performance of the company as it can represent all shareholder interests, especially to the company whose ownership still concentrated. Indonesia is one of the countries where the structure company ownership is still highly concentrated and vulnerable to inter-conflict shareholders. Currently, Indonesia has a regulation on liability a public company to have at least one independent director within the ranks Board of Directors. The regulation is issued by the Indonesia Stock Exchange (IDX) on 2014. This study aims to determine the impact of the existence of the independent director on firm performance in Indonesia. This study used 370companies listed on the IDX as research samples with observation period5 years from 2012 to 2016. Using the panel data regression method, this study found that independent directors had no influential effect on firm performance. This study also found that ownership concentration has no independent board of directors who influence on firmperformance.