Integrating Commissionare Characteristic and Investment Efficiency: A Conceptual Framework for Indonesian Listed Commercial Banks
Keywords:
Corporate governance, Commissioner characteristics, Investment efficiency, Indonesian bankingAbstract
Investment efficiency is essential for sustainable banking performance because it reflects an organization's ability to allocate capital to value-creating investments while avoiding overinvestment and underinvestment. Although corporate governance has been widely recognised as a determinant of investment decisions, existing studies provide inconsistent evidence regarding the influence of commissioner characteristics. This conceptual paper develops an integrated framework to explain how commissioner characteristics influence investment efficiency in Indonesian listed commercial banks. Drawing on Agency Theory, the paper proposes that commissioner size, composition, tenure, age, and educational background improve investment efficiency by enhancing monitoring effectiveness, reducing agency conflicts, and strengthening strategic decision-making. The proposed framework contributes to the corporate governance literature by providing a comprehensive explanation of how commissioner characteristics influence investment efficiency within the banking industry. It also offers practical insights for regulators and bank executives in designing governance structures that support sustainable organisational performance.
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