The Influence of Good Corporate Governance, Human Resources on Company Performance Through Corporate Culture: A Case Study of an Iso-Certified Company

Abstract

Background: Company performance is strongly influenced by sound governance, the quality of human resources (HR), and a conducive corporate culture. As a seaweed processing company, the company under this study faces challenges in meeting production targets and operational efficiency. Efforts to improve performance need to be examined from the perspective of the interrelationship between Good Corporate Governance (GCG), HR, and corporate culture.

Objective: This research seeks to examine how good corporate governance affects a company’s performance, with corporate culture serving as the mediating factor.

Methods: This study utilized a quantitative research design with data gathered from 180 respondents through a structured questionnaire. The analysis was carried out using the Partial Least Squares (PLS) method, processed with SmartPLS 3.0 software. The model was tested for validity, reliability, and hypothesis testing for both direct and indirect effects among variables.

Results: The R² value for the corporate culture variable was 0.639, meaning that Good Corporate Governance (GCG) and Human Resources (HR) together accounted for 63.9% of the variance observed in corporate culture. The R² value for company performance was 0.582, meaning 58.2% of performance was explained by GCG, HR, and corporate culture. The direct influence of HR on corporate culture was 0.589 and on performance was 0.428 (significant). GCG had a direct effect on corporate culture at 0.297 (significant), but only

0.108 on performance (not significant). Corporate culture had a direct significant effect on performance at 0.344. The indirect influence of GCG on performance through culture was 0.102 (significant), and that of HR was 0.203 (significant). HR was the most dominant variable in the model.

Conclusion: Company performance is significantly influenced by HR and corporate culture, while the influence of GCG is indirect through corporate culture. These findings imply that strengthening HR and cultivating a strong organizational culture are key strategies must implement by the company to enhance sustainable organizational performance.