The Mediating Role of Intellectual Capital in Corporate Governance and Financial Efficiency of Banking Industry in Indonesia Debora, Fellyn Liang, Regi Muzio Ponziani*
Trisakti School of Management
Abstract
This study examines the mediating role of Intellectual Capital, specifically Human Capital and Relational Capital, in the relationship between Corporate Governance Mechanisms and Financial Efficiency among commercial banks listed on the Indonesia Stock Exchange. The research focuses on governance attributes represented by Board Size and Non-Executive Directors, with financial efficiency measured by Z-Score and Net Investment Income. Using a quantitative approach with secondary data from audited financial reports over the 2021-2023 period, the study analyzes 45 commercial banks that met the data completeness criteria, resulting in 135 panel observations. The findings reveal that neither Board Size nor Non-Executive Directors significantly affect financial efficiency, either directly or indirectly through Human Capital and Relational Capital. Furthermore, both Human Capital and Relational Capital show no significant mediating influence between governance and efficiency indicators. These results suggest that Indonesian banks have not yet fully utilized intellectual and governance resources to enhance operational efficiency and stability, underscoring the need for improved integration of intangible capital management and corporate governance practices in the banking sector.
Keywords: Intellectual Capital, Human Capital, Relational Capital, Corporate Governance Mechanisms, Board Size, Non-Executive Directors, Financial Efficiency, Z-Score, Net Investment Income.
