ANALYSIS OF RISK MANAGEMENT COMMITTEE (RMC) ON COMPANY’S ACCOUNTABILITY: THE IMPLICATION OF CORPORATE GOVERNANCE PRACTICES IN INDONESIA’S PROPERTY AND REAL ESTATE

Abstract

The existence of RMC is one of the best practices of Good Corporate Governance (GCG)
implementation. RMC embraces the principle of transparency where the RMC Company
discloses information about risk, risk management and RMC supervision. The objective of this
research is to examine the correlation between commissioner characteristic, audit committee
characteristic, business complexity, and reputation audit firm as the most influential determinant
factors to the existence of risk management committee (RMC) towards company accountability
in Indonesia’s property and real estate. The population used was property and real estate
companies listed in Indonesia Stock Exchange period 2013-2015. The sample was taken by
purposive sampling and resulted in the final sample of 75 companies. Data were taken from the
companies' annual report and analyzed by logistic regression analysis tools. The result of the
logistic regression showed that the size of the board of commissioners and the audit firm's
reputation has a positive effect on the existence of RMC, while other variables (independent
board of commissioners, board of commissioners meeting frequency, audit committee
independence, accounting expertise and finance audit committee, and business complexity) have
no effect on RMC existence.