Board Diversity, Foreign Ownership, and Audit Quality: Their Influence on Financial Performance in Indonesian State-Owned Enterprises (2020-2024)

Abstract : This research explores the impact of board diversity, foreign ownership, and audit quality on the financial performance of Indonesian state-owned enterprises (SOEs) listed in the index of IDX BUMN20 for the period of 2020 –2024. As part of broader governance reforms in Indonesia, this research seeks to assess how these three governance elements contribute to financial outcomes within a unique organizational setting where commercial and public mandates often intersect. Using a panel data regression model with a sample of 18 SOEs across five years, it reveals that both foreign ownership and high-quality auditing are significantly linked to enhanced financial performance, while board diversity, although positively correlated, does not show statistical significance. These results suggest that while inclusive board structures may offer long-term governance benefits, measurable financial gains are more immediately driven by investor oversight and the credibility of external audits. The findings contribute to a deeper understanding of governance effectiveness in state-affiliated firms and offer practical guidance for enhancing performance through targeted reforms. This research underscores the importance of institutional support, regulatory consistency, and professional independence in shaping the future of Indonesia’s public sector enterprises.