Corporate Governance Compliance in Banking Industry: The Role of the Board

Round 1

Reviewer 1 Report

This paper examines how various board characteristics influence corporate governance compliance in the Indonesian banking industry. The analysis covers banks listed on the Indonesia Stock Exchange between 2010–2015. The paper is relatively extensive, however in some parts it is underdeveloped, in some others requires tightening. In particular, I would suggest to develop discussion by explaining what are the main implications for the problem. The reader can see the results, so the authors do not need to repeat in the text everything that is shown in the tables (e.g. lines 367-371: “Table 3 shows that the adjusted R2 score is 0.384, meaning that variations in the independent variables can explain 38.4% of the characteristic variables. Other variables outside the model must therefore explain the remaining 61.6%. Based on the ANOVA test, an F value of 14.461 was obtained with a significance level of 0.000, which is clearly less than 0.05”), but what are the consequences of this relationship, what can a reader learn from this (practitioners or theoreticians) ? What are the possible implications for the banking sector and the regulator in Indonesia? The authors should simply do better job in “selling” their results.

Methodologically, the authors employ multiple regression and provide some additional testing to check the consistence of the results. In case of logistic regressions some clear explanation of dependent variables (which of them takes the value 1) may make it easier for some readers to grasp the results.

Minor remarks:

• the table 1 looks as if it was copied from another publication, it should made independently and properly formatted, if it should be there at all,
• I am not convinced about putting two tables into introduction section, the authors should consider remove at least table 2 and describe its content in main text
• line 96: if something is optimal, it is the best solution under certain conditions, you shouldn’t use “more optimal”, because optimal is the best, so it cannot be better
• line 328: sentences such as this (“The dependent variable is the variable that is of primary interest to the researcher [91]”) do not contribute anything to work, only to increase its volume, so they can be removed without compromising the quality
• line 336: the formula 11 requires some explanation of variables e.g. what stands for “Max”?
• the dots in formulas 1-11 look strange
• lines 345& 354: the authors introduce the explanation to Table 2 twice, same thing in lines 367&372 for Table 3 – in general the results this reads odd
• lines 362-363: the authors present the average compliance level with corporate governance for the banking sectors of various countries, but without showing the name of the country they relate to, which makes the readers feel confused and forced to search for this information on their own. The results for Indonesia significantly exceed the results for other countries, which does not correspond to the description provided in the introduction (table 1) or in table 2. Pooled Data - how can this difference be explained?
• some minor typos in the text (e.g. 403: “results of it supervision”)
• the numbering of the tables requires correction (two different tables placed in two different parts of the paper, i.e. in line 34 and 340, have number 1; a similar error applies to table 2)
• I suggest changing the title of section 3 to: Methodology and data
• the phrase "This study's results" seems to be used too often and authors should consider replacing it with a simple "the results" or other expression (e.g. lines: 379, 390, 407, 413, 420, 534)

Author Response

Dear please find attachment, we have revised. Many thanks 

Author Response File: Author Response.pdf

Reviewer 2 Report

• I think authors should better clarify the corporate governance compliance they want to investigate, the scope of such compliance. To this end, particularly the Introduction needs to be revised, in order to explain better the research design of the paper.
• I have some doubts on the variables and the way they are defined.
  • The dependent variable is not clear how it is determined. The authors write: "the more items that comply with CG......", but nothing about such items is said.
  • The independent variables. Particularly the experience of board commissioners is based on the number of commissioners with experience in various positions. What does it mean? I think it should be explained
• I don't understand the choice of the sample period, particularly the starting year: 2010. Authors write of two regulations (2009 and 2006), I think this point must be explained.
• The paper describes the results, I think more critical comments are needed: more focus on implications for banks
• Some formal aspects: review the number of tables; section 4 opens with a Table (maybe it would be better to change)

Author Response

Dear reviewer

Please find attachment, we have revised the article, many thanks

Author Response File: Author Response.pdf

Reviewer 3 Report

Please find my commends in attached file bellow.

Comments for author File: Comments.pdf

Author Response

Dear reviewer

Please find attachment, we have revised our article. many thanks

Author Response File: Author Response.pdf

Round 2

Reviewer 2 Report

English language should be improved. Some mistakes are still present. For example,  the new parts of the introduction

Author Response

Please find attachment our revision article

Author Response File: Author Response.pdf