Human capital, board monitoring and corporate performance

Board of commissioner is one of internal control mechanism of corporate governance of which role is to monitor and give recommendations to management in order to increase firm value. The purpose of the study is to describe effect of monitoring role in increasing corporate performance, and effect of human capital on effectiveness of monitoring role. The population is manufacturing companies listed in Indonesian Stock Exchange; using purposive sampling there 790 companies as the sample. The analysis revealed that one of the indicators of human capital, that is level of education, is a good indicator to explain human capital. The hypothesis testing shows that monitoring role has significant influence on corporate performance and human capital has influence on monitoring role. However, family control cannot strenghthen the effect of monitoring role on corporate performance. The study uses human capital attribute as variable that affect monitoring role of commissioner board. Human capital is involved since the Indonesian public company is dominated by family members and generally, one's capability is not taken into account in commissioner board recruitment.