Corporate governance and HRM practice on consumption product sector listed in Indonesia stock exchange

Abstract

This study bridges the gap between Corporate Governance with the practice of human resource management and organizational performance. Data were collected from companies listed on Indonesia Stock Exchange on consumer product sector with 10 companies and consisting of 35 respondents. By using multiple regression analysis, the relationship between corporate governance and human resource management practices reveal significant effect on organizational performance. This proves that human resource management has a role to the company performance. Moreover, the results show the role of human resource management as a mediating variable that connects between corporate governance practices and company performance. This result also proves that there is a correlation between corporate governance practices implemented in companies with the implementation of human resource management. This study raises the approach of stakeholders who take learning through corporate governance. Although there is difficulty in getting cooperation and response from the companies involved, it proves that the stakeholders of the employees involved are aware of corporate governance issues and companies are required to improve and maintain their standards.