FINANCIAL PERFORMANCE: GOVERNANCE, RISK, COMPLIANCE AND DIGITAL TRANSFORMATION

The disparity between aggregate banking profitability and individual bank performance, coupled with inconclusive evidence on Governance, Risk, Compliance, and Digital Transformation, necessitates further investigation. The study aims at examining their effects on the financial performance of conventional commercial banks listed on the Indonesia Stock Exchange during 2020–2024. Using 80 firm-year observations, this study employs a Random Effects Model with cluster-robust standard errors. Financial performance is measured by Return on Assets (ROA), while Governance is represented by the Board of Directors, Audit Committee, and Independent Board of Commissioners; Risk by the Non-Performing Loan (NPL) ratio; Compliance by a Compliance Disclosure Index based on GRI Standards 2021; and Digital Transformation by a Digital Transformation Index. The results show that NPL and Digital Transformation negatively affect ROA, while Governance, Compliance, CAR, and OEtOI have no significant effects. The study provides an integrated assessment of these factors in Indonesian banking.