Abstract:

This research aims to provide empirical evidence regarding the effects of characteristics and overlap membership of Risk Oversight Committee on Banking credit risk in Indonesia. There’s still limited research examining risk oversight committee in Indonesia. Further, the overlap member between committee is very common to be found in Indonesia banking industry. Characteristics of each committees are measured by activities, size, and expertise & competence based on Hermawan (2009) and Indonesia Financial Service Authority (FSA) regulation. Samples are consisted of banks listed in Indonesia Stock Exchange (IDX) during 2013-2017. The result from this research concludes that expertise and competence of risk oversight committee has negative effect on bank credit risk. This research also provides empirical evidence that overlap membership of risk oversight on audit committee has positive effect on bank credit risk, thus diluted the to the committee’s focus on monitoring bank credit risk. Further, the regulation of corporate governance in Indonesia can be improved through this research.