The Role Of Board Of Directors' Characteristics In Enhancing Corporate Profitability In Consumer Non-Cyclical Companies

Enriqco Rendhi Julian Mahardhika; Henny Wirianata

doi:10.63922/ijebir.v5i06.6917

Enriqco Rendhi Julian Mahardhika Program Studi Akuntansi, Fakultas Ekonomi dan Bisnis, Universitas Tarumanagara, Jakarta, Indonesia
Henny Wirianata Program Studi Akuntansi, Fakultas Ekonomi dan Bisnis, Universitas Tarumanagara, Jakarta, Indonesia

DOI: https://doi.org/10.63922/ijebir.v5i06.6917

Keywords: Profitability, Return on Assets, Board Size, Board Gender Diversity, Board Age

Abstract

This study aims to examine the effect of board size, board gender diversity, and board age on profitability, measured by Return on Assets (ROA), in consumer non-cyclical companies listed on the Indonesia Stock Exchange (IDX) during 2021–2024, with firm size and leverage as control variables. The study employs a quantitative approach using secondary data from companies' annual reports and financial statements. Purposive sampling yielded 73 companies with 292 firm-year observations, which were reduced to 279 observations after 13 outliers were removed. The data were analyzed using multiple linear regression in SPSS version 19. The results show that board size (B = 0.001; p = 0.573) and board gender diversity (B = 0.020; p = 0.447) have no significant effect on ROA, whereas board age has a positive and significant effect (B = 0.003; p < 0.001). Among the control variables, leverage has a significant negative effect on ROA, while firm size has no significant effect. The model explains 20.5% of the variation in ROA (adjusted R² = 0.205). These findings indicate that the experience and maturity of directors are more relevant to asset-management efficiency in this sector than the number of directors and the proportion of female directors.

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