The Role of Governance in Financial Performance at Credit Union

Abstract

Credit Union (CU) is a movement of finance to improve socio-economic conditions of the community. The success of this movement of corporate governance applied in the management of CU. good governance is expected to improve financial performance, so that its impact will be perceived by the public.  This study analyzed the relationship of corporate governance of CU with financial performance. The governance of CU is grouped into external governance, internal governance and governance of individuals. External governance with regard to compliance with regulations and public accountability. Internal governance emphasizes strategies to ensure the sustainability of the Organization in the future.  Individual governance emphasizing on integrity, competence and commitment of managers CU. While the financial performance is measured based on the analysis of the PEARLS. Data were collected using a questionnaire filled in by management. The results showed that the internal governance is the factor effect on financial performance. While external governance and governance of individuals does not affect financial performance. This shows that the Manager's responsibility towards the sustainability of the CU organizations is very important in the improvement of financial performance, supported with integrity, competence and commitment. Based on the results of this research are expected to CU can improve the performance through robust improvement on internal governance