This study aims to prove there are differences in financial performance and market
performance based on the status of Interlocking Directorate. The financial performance is
measured by using a proxy Return on Assets (ROA), as well as the market performance is
measured by using a proxy Price to Book Value (PBV) and Tobin’s Q. Interlocking
Directorate is a situation where a person occupying the position of director and
commissioners on two or more companies or become representatives of two or more
companies have joined the board of directors or commissioners of the company. The
population of this research is all public companies listed on the Indonesian Stock Exchange
in the period 2011-2014, which has been published by www.idx.co.id. Data were analyzed
using purposive sampling. Collecting data using the company's financial performance,
financial statements and annual reports.
This study also reaffirms Interlocking Directorate status to a public company in the
Indonesia Stock Exchange. In a previous study by Ahmar et. al, 2015 with a sample of public
companies in 2000-2010 has provided evidence that 47.5% of the public company in
Indonesia which interlock status. The average of the scores Interlock during 10 years of
observation was 0.41 (41%), which states that the board of directors of public companies
have interlock status. Results of different test using Mann-Whitney sample t-test showed that
there is no significant difference in financial performance based on the Return On Assets and
there are no significant differences in the performance of the market is based on Price to
Book Value and Tobin’s Q public corporations that use Interlocking Direcetorate and public
company do not use Interlocking Directorate in the observation period 2011-2014. It
concluded that the refusal on the Hypothesis 1, 2 and 3.
Keywords : Interlocking Directorate, Financial Performance, Market Performance, Return
On Asset, Price to Book Value, Tobin’s