Risk and Profitability in Indonesian Rural Bank: The Moderating Role of Female Commissioners

This research examines the moderating role of female commissioners in the relationship between business risks and profitability, specifically within the framework of Indonesian rural banks (BPRs). By integrating theories of Good Corporate Governance, Risk Management, and Gender Diversity, this study analyzes how various risks, namely credit risk, represented by non-performing loans (NPL), liquidity risk evaluated through the current ratio (CR), and operational risk measured by the operating expenses to income ratio (BOPO), affect profitability, as indicated by Return on Assets (ROA). Additionally, it explores how the involvement of female commissioners may alleviate these risks. The analysis utilizes panel data from a sample of 30 BPRs in the Malang Raya region over the period from 2019 to 2023, employing fixed-effect regression models with interaction terms. The findings reveal that both credit risk and operational risk significantly diminish profitability, whereas liquidity risk does not exhibit a consistent impact on profitability outcomes. Importantly, the presence of female commissioners is shown to moderate the adverse effects of credit risk, thereby mitigating its negative influence on ROA. These results underscore the strategic importance of fostering gender diversity within corporate governance structures as a vital strategy for enhancing risk management practices and strengthening institutional resilience.