Committee on board: Does it matter? A study of Indonesian Sharia-listed firms

The committee on board includes audit committee and nomination committee that currently has been questioned as to whether the firm value is also affected by the committees’ performance that has been the subject of attention. Apparently, this study is the first to attempt providing an evidence of committees’ role on to the extent of its contribution to firm value in the context of Indonesian Sharia-listed firms as the establishment of Islamic-compliance firms is currently experiencing an upward trend in many countries. Hence it is enticing to examine the impact of committee on board as part of corporate governance mechanisms on firm value in the Indonesian Sharia-listed firms. Using an Indonesian Sharia-listed firms which counts for 30 firms in the quarterly period of 2009 to 2015, this study employs a 720 balanced panel, using Generalized Least Square. The results reveal that the audit committee and the nomination committee have a significant impact on firm value (Tobin’s Q). The non-significant result for ROA suggesting that the mixed measured of book and market is viewed more reliable for investors as it indicates the overall performance measure. Meanwhile the result of the number of audit committee meeting yielded no significant impact on firm value; this may be due to no restrictions on the number of positions of audit committee serves in firms, therefore, *Corresponding author: Fitriya Fauzi, Department of Finance and Banking, Curtin University, Malaysia E-mail: fitriya.fauzi@curtin.edu.my

ABOUT THE AUTHORS Fitriya Fauzi is a lecturer in Finance and Banking at Faculty of Business, Curtin University Malaysia. She holds a PhD in Finance from the University of Waikato-New Zealand and has published in refereed journals such as Global Business Review and International Journal of Managerial Finance among others. Her main research interests include corporate finance and corporate governance.
Abdul Basyith is a senior lecturer in Finance at the Faculty of Economics and Business, University of Muhammadiyah Palembang, Indonesia. He holds a PhD from the University of Pancasila-Indonesia. He has published in refereed journals such as Global Business Review among others. His main research interest includes corporate finance.
Dani Foo is a senior lecturer in Accounting, Waikato Management School, University of Waikato, New Zealand. He holds a PhD from Texas and taught at various universities in Texas, Macau/ Hong Kong, Malaysia, Singapore, UK, and Australia. He is a CPA, CA and CMA. His main research interests include environmental and sustainability accounting, ICT application in accounting and finance.

PUBLIC INTEREST STATEMENT
Good corporate governance became an urgent emergent issue after the last few financial crises. The rules of corporate governance were increasingly under scrutiny in countries such as Indonesia. As a seriously affected country back in the Asian Financial Crisis, Indonesia, acutely aware of the pitfalls of weak corporate governance, has been enhancing its corporate governance rules. An instrument of this enhancement process is the "board committee" which includes the audit and nomination committees. These aim to lessen conflict of interest and potential mismanagement. It was widely perceived that lack of strict adherence to financial reporting standards eventually contributed to the financial crises. Here, we examined the effect of the reported presence of an audit or nomination committee on a firm's value. We found that the presence of the said committees do have significant effect on aspects of a firm's value in the context of Indonesian Sharia-listed firms. This may the first such study in an era where Islamic-compliant firms are advancing in many countries.

Introduction
The financial crisis that hit Southeast Asia in 1997 also destroyed the economic and financial system in Indonesia as many firms were affected and collapsed during that time. The economic slump as the result of that crisis has led few firms to be merged to get a bailout and cash injection. Some firms could recover from that crisis but some firms were closed down due to poor performance as they were unable to get out of bankruptcy despite having received an injection of funds. The research also indicated that one reason for an unsuccessful way out was due to poor management within the company. Most of the firms during that time were owned and controlled by the family members, hence, expropriation exists. In addition, corporate governance was not important in the firm's management as it is believed that owners are rulers. Afterwards, huge concerns were raised by all parties including the government, private institutions, and non-government organizations, and it was concentrated on the improvement corporate governance conduct by issuing rules and regulations that were bound to all firms in the stock exchange.
Corporate governance has become an issue (topic) that is dominant in the policy in developed countries and countries in transition. The fundamental of corporate governance is how to deal with all agency problems. Jensen and Meckling (1976) affirmed that the agency problem is crucial as a result of the separation between ownership and management where management might not act in accordance with the interests of the owners of the company. For such conditions, the corporate governance mechanisms both internally and externally play an important role in minimizing conflicts between the principal (the company owner) and agent (manager).
The mechanism of corporate governance includes the ownership structure, the size of the board of directors, independent directors, board meetings, committees, the election of auditors and others. Equally important, the thing that gets the attention of the corporate governance mechanism is how the compensation and incentives given to board members or top executives were able to minimize conflict for all agency problems (Dong & Ozkan, 2008). Compensation regarded as significant for (1) motivating top executives to work in line with the interests of the owner of the company, (2) to recruit and retain high quality managers (Anderson & Bizjak, 2003).
Corporate governance is aimed at managing the firm's conduct to be transparent, fair, responsible, independent and accountable, and these are referred as corporate governance principles. These principles may affect the firm's objective and culture as the corporate governance in the business process is a solid foundation for realizing the Company's vision and mission. These principles became the company's benchmark in managing the firm that aims to improve the image, efficiency, effectiveness and social responsibility of the firm, thus it can safeguard the interest of all stakeholders and increase the shareholders' value. There are five components in the corporate governance which are board size, board demographic, board leaderships, board education and board evaluation (Fauzi & Locke, 2012). Each component has its own sub-components that should be complied, for example, in the board size, there are rules governing how much the number of independent directors and the number of committee serve on the boardroom, and if one has fewer than stipulated in the rules and regulation of corporate governance, then the violation of corporate governance conduct remains ambiguously.
Furthermore, it is widely perceived that the problems faced by large firms during the economic crisis and the financial crisis caused by mismanagement of the company such as the lack of transparency in financial reporting, the "financial report fraud", and the "overvalued" against the value of shares and other issues. Such financial scandals damaged the investors' trust and confidence which in turn hamper the growth of the economy as the investors may withdraw their investment and the potential investors may think twice to invest their fund in the country. Reliable information is essentially a must for the investor, therefore, the financial information report should be accountable (Sarkar, Sarkar & Sen, 2006) and, hence a stringent monitoring is compulsory and an independent audit committee is required (Jemison & Oakley, 1983). It is believed that the investors' trust and confidence come along with the presence of independent and qualified audit committee (Leung, Richardson, & Jaggi, 2014). In addition, the financial frauds occur due to the small number of independent audit committee (Bhasin, 2013) and the minimum number of audit committee meeting (Yunos, Ahmad, & Sulaiman, 2014).
The rules governing the audit committee and nomination committee for listed company in Indonesia began in 2001 that is stipulated by the Indonesian Security Exchange Commission, and this rule stipulates that every firm is obligated to have audit committee, nomination committee and other committee, and the number of these committees in the boardroom. Furthermore, the regulation also emphasized the role and task of audit committee and nomination committee. The audit committee should (1) assess the implementation of activities and the results of audits conducted by the internal audit and external auditor in order to prevent the implementation and reporting does not meet the standard; (2) provide recommendations regarding the improvement of enterprise management control systems and their implementation; (3) ensure that there have been a satisfactory review procedures to the information released by the state-owned enterprises, including brochures, periodic financial statements, projections/forecasts and other financial information submitted to the shareholders; (4) identify things that require the attention of commissioner/board of trustees; (5) carry out other duties assigned by the Commissioner/Board of Trustees within the scope of duties and responsibilities of Commissioners/Board of Trustees under the provisions of the legislation. The nomination committee should identify, evaluate, nominate a new director on board, and also facilitate the selection of new directors by shareholders.
The existence of audit committee should lessen the conflicts of interest and agency cost which in turn can increase the value of companies (Reddy, Locke, & Scrimgeour, 2010). Practically the implementation of corporate governance merely meets the requirement stipulated by the corporate governance regulation without awareness of how important the corporate governance might be for the company's survival. Furthermore, though the regulation about the roles and tasks of audit committee and nomination committee has been released since 2001, in practice this regulation is not fully implemented as it stipulated that the duty of the audit committee is to assist the commissioners in conducting an audit of the firm's management. In addition, the role of nomination committee is to identify, evaluate, nominate a new director on board, and also facilitate the selection of new directors by shareholders. The audit committee and nomination committee appointment should be independent of all firm's interest in order to work effectively and objectively. Thus, this study attempts to examine the impact of audit committee and nomination committee on firm value as mentioned that the role of those two committees has been the subject of questions whether this committee exists only to meet the requirement stipulated by the Indonesian Security Exchange Commission or these committees' existence is due to the good corporate governance awareness. Furthermore, many studies focusing on the relationship between corporate governance and firm value (Agrawal & Knoeber, 1996;Barnhart & Rosenstein, 1998;Brown & Caylor, 2006Gompers, Ishii, & Metrick, 2003;Yermack, 1996) and very few have focused on the role of the committees on firm value.
Nevertheless, the existence of committee on board includes audit committee and nomination committee has been questioned as to whether the firm value is also affected by the committees' performance or it was only a side effect of "other factors" as the company merely fills the requirement stated by the security exchange commission. Apparently, this study is the first to attempt providing an evidence of committees' role on to the extent of its contribution to firm value in the context of Indonesian Sharia-listed firms as the establishment of Islamic-compliance firms are currently experiencing an upward trend in many countries. Hence it is enticing to examine the impact of corporate governance on firm value in the Indonesian Sharia-listed-firms. This study solely focuses on the committee on board as part of corporate governance mechanisms.

Literature review
Previous studies on corporate governance and corporate value has been widely applied in various countries. Most examine how the relationship between the performance of the company and the various mechanisms of corporate governance such as the size of the board of directors, the proportion of non-executive directors, the dual role of chief commissioner and ownership structure. Agrawal and Knoeber (1996), Yermack (1996) Barnhart and Rosenstein (1998), Gompers et al. (2003), and Caylor (2006, 2009) are some researchers who focus on how the corporate governance affects the value of the company in companies in the United States. Weir, Laing, and McKnight (2002), and Cheung, Connelly, Limpaphayom, and Zhou (2007) researched companies in Hong Kong, Australia and the United Kingdom.
More specific research investigation on the part of corporate governance is done by Hermalin and Weisbach (1991), Yermack (1996), Eisenberg, Sundgren, and Wells (1998), Mak and Kusnadi (2005), and Coles, Daniel, and Naveen (2008). For example, Hermalin and Weisbach (1991) investigated the influence of the proportion of independent directors on corporate performance, and Yermack (1996) examined the influence of the number of directors on corporate performance.
The mechanism of corporate governance can be defined as a set of rules, procedures and a clear relationship between the parties that take decisions by the parties to exercise control over the decisions that will ensure and oversee the governance system work in an organization. Syakhroza (2005) explain that the structure of corporate governance can be defined as a way of how the activities of the organization are divided, organized and coordinated. Corporate governance structures are translated into a container which is known as the organs of the company. Organ organizations can be classified into two, major organs and supporting organ. The main organ consists of a general meeting of shareholders (AGM), the board of commissioners and directors. While supporting organ includes committees under the board of commissioners, such as the audit committee, nomination committee, and remuneration as well as the risk monitoring committee. If these two organs function well it can minimize agency problem.
As there is a separation between principal and agent in a firm, a conflict of interest is apparent and a moral hazard issue is involved between principal and agent relationship which leads to the agency cost. One of most common problem occurred is an incentive issue in which the agent might adopt an accounting procedure that is favourable for them. Therefore, the presence of audit committee is crucial as agency theory asserts that the audit committee minimize the agency problem as their presence can increase the quality of financial statement reporting and mitigate the financial fraud occurrence. Therefore, findings from this study will improve our understanding of linkage between committees and firm value.
Cadbury Committee (1992) asserted that the audit committee size is relevant and should be thoroughly considered and is aimed at achieving a monitoring effectiveness (Lin, Li & Yang, 2006). Additionally, Blue Ribbon Committee (1999) affirmed that a minimum of three audit committee members is appropriately adapted by various corporate governance reports. Larger size of audit committee brings some advantages such as organizational status and authority (Braiotta, 2000;Kalbers & Fogarty, 1993), a broader knowledge base (Karamanou & Vafeas, 2005), sound financial information (Anderson & Reeb, 2004), and a more reliable internal auditing function (Turley & Zaman, 2004). Nevertheless, there are some drawbacks of having larger audit committee members as the larger the size the more process should be taken and the more dispersal of the responsibility should be carried out, and further it also leads to inefficient governance (Vafeas, 1999).
Furthermore, Braiotta, Louise, Gazzaway, Colson, and Ramamoorti (2010) emphasized that the audit committee is responsible for overseeing and monitoring of financial reporting system and internal-external audit process, and this role is substantially important as this committee should maintain the company's accountability as stipulated by the corporate governance conduct. This committee is responsible to strengthen the quality financial reporting information and improve the investors' confidence by having reliable financial information. In addition, Reddy et al. (2010) and Zare, Khedri, and Farzanfar (2013) affirmed that the presence of audit committee in public corporate entities has a positive effect on reducing agency cost and increasing firm value. Meanwhile, Arshad, Satar, Hussain, and Naseem (2011) found a positive effect of an audit committee on firm's profitability and performance.
In Indonesian context, there are some common issues regarding the committees that serve on boardroom, in particular, for audit committee. First, many of the audit committee members, in fact, have a relationship, colleague or kinship, with shareholders, commissioners and directors (Marunduri, 2013). Second, the number of audit committee that serves on boardroom as yet meets the standard requirements stipulated on the corporate governance conducts and, in 2015 there are about 10 per cent of listed firms that have only one to two audit committees on board (Basyith, 2016). It can be concluded that the existence of audit committee only meets the standards of the minimum requirements. Similar to audit committee issues mentioned, nomination committee is not without kinship issue and agency problem which is apparent. Moreover, Basyith, Fauzi and Idris (2015) found a nonsignificant effect of audit committee on firm performance in particular for bluechips firms-listed in the Indonesian Stock Exchange. Similarly, nomination committee appears to be somewhat more nepotistic than is desired and agency problem appears common. The situation appears far from ideal. An effective nomination committee needs to ensure the appointment of board members whose interests are aligned with those of the shareholders. Further, the nomination committee is of importance to ensure that the directors are well-chosen, so they can increase the value of the firm.
The hypotheses regarding the audit committee and nomination committee and firm value are: H 1 : The presence of the audit committee on the board increases firm value.
H 2 : The presence of the nomination committee increases firm value.
The more frequent the audit committee meeting, the better the quality of auditing and accounting issues and the financial information quality provided to company's management and shareholders, and thus it can reduce the possibility of financial fraud (Abbott, Parker, & Peters, 2004;Raghunandan, Rama, & Scarbrough, 1998) and can increase the effectiveness of firm's management (Menon & Deahl Williams, 1994) as the less frequent number of audit committee meeting may lead to earning misstatements (Beasley, 1996;Beasley, Carcello, Hermanson, & Lapides, 2000). Moreover, a routine of audit committee meeting can reduce the agency problem and information asymmetry as the audit committee can provide a fair and timely financial information to the management, shareholders and potential investors (Al-Mamun, Yasser, Rahman, Wickramasinghe, & Nathan, 2014;DeZoort, Hermanson, Archambeault, & Reed, 2002;Mallin, 2007). Furthermore, Xie et al. (2003) found that the most frequent number of audit committee meeting, the lower the discretionary accruals, and hence it indicates better quality of financial reporting. Additionally, an audit committee having at least four times a year meeting will significantly reduce the restatement of financial statement (Abbott et al., 2004). Therefore, the more frequent the meeting, the more reliable the financial system and information quality, and in the end it will affect the firm value. However, the less frequent audit committee meeting also reduces the additional cost incurred (Mohd Saleh, Mohd Iskandar, & Mohid Rahmat, 2007).
The hypotheses regarding the frequency of audit committee's meeting, and firm value is: H 3 : The frequency of audit committee's meeting increases firm value.

Sample set
The data for this study were obtained from the Indonesian Stock Exchange database archive. This study employs a quarterly data, as using annual financial data has drawbacks, as it relies heavily on data that are 12 months old for the calculations, and hence one problem with interpreting data over time is uncertainty timing events that many data series may exhibit activities or movements that recur every year in the same quarter. For example, the appointment of audit committee differs for each company as one company can appoint the new audit committee in the beginning of the financial accounting date report and other company can appoint them in the mid or the end of financial accounting date report. Hence, to capture specific changes in the board committee' composition over time, quarterly data are more appropriate to be employed. Further, market data as the stock prices are employed to calculate the firm value (Tobins Q) and the stock price changes significantly every month and the changes may be caused by the market information, therefore, using quarterly data can capture these dynamic changes in the data series over time. Further, though the quarterly data are not verified by the accredited accountant, this quarterly data are audited by the internal auditor and are approved by the board of directors, and hence the quarterly data are also considered valid. Moreover, there are no differences between quarterly data and annual data in terms of financial data reported.
Using 30 Indonesian listed firms categorized as Sharia-based-firms compliance which is referred as Jakarta Islamic Index (JII) Firms and seven years sampling period which starts from 2009 to 2015, therefore 840 observations of panel data are employed in this study. Though only 30 firms were included, the sample may do well in capturing aggregate corporate governance in the country because the listed firms can represent the whole industry in Indonesia. The JII index is an index created on July 2000 in the Indonesian Stock Exchange to accommodate the market needs. This index only includes all listed firms (1) complying with Islamic Laws, (2) having obligation asset ratio of no more than 90%, (3) having highest liquidity and (4) having highest market capitalization. Therefore, it could be concluded that the majority firms included in this index could also be listed on the blue-chip index which is referred as an LQ45 index. The JII index is announced every six months per year and therefore there are 14 announcement lists of firms included in the JII index, and therefore there are more than 30 firms which are included in the JII index in the sampling period. Only 30 firms are included in the analysis and the criteria of selections are (1) the selected firms should be listed by the JII index for at least six times out of 14 announcements, and (2) the selected firms should have all the information required for the analysis.

Variables
Variables are largely adopted from the previous study, thus, this study uses two firm value proxies as the dependent variables which are Tobin's Q and ROA. The explanatory variables include audit committee, nomination committee, and remuneration committee, while firm size and industry dummy serve as control variables.
Variables are defined as follow: Tobin's Q is measured as ratio of the market value of firm's assets divided by the replacement cost of the firm's assets book value; audit committee is measured as the total number of audit committee serving on the board; the nomination committee is measured as the total number of nomination committee serving on the board; the frequency of audit committee's meeting is measured as the total number of audit committee's meeting frequency in one period; firm size is measured as the log of total assets.

Method
This study uses panel data, and to estimate the firm value against the board committee, this equation is the first point to begin, the model is as follows: where μ i denotes the unobservable individual effect, λ t denotes the unobservable time effect, and v it is the remainder stochastic disturbance term. In ordinary least squares (OLSs), the constant variance is assumed, that is the variance of an observation is the same regardless of the values of the explanatory variables associated with it, and since the explanatory variables determine the mean value of the observation, therefore the variance of the observation is unrelated to the mean. If unequal variances arises there is no guarantee that the OLS estimator is the most efficient and unbiased estimator. Therefore, generalized least square (GLS) is appropriate to be employed. GLS is a modification of OLSs which takes into account the inequality of variance in the observations. According to the Breusch-Pagan test for heteroskedasticity results in 194.64 (p-value 0.000), indicating that variances among the explanatory variables are not constant. The regression model is specified as follows:

Findings
Tables 1 and 2 provide descriptive statistics and regression results subsequently. As can be seen from Table 1, the mean value for Tobin's' Q is 10.0547 with a range of −1.7660 to 14.2276, suggesting that most companies have good corporate value. A higher value of Tobin's' Q indicates that stock prices are rated higher than the average market value. The stock is considered overvalued which often happens to companies that do not have a stable income, inconsistent of return on equity and lower income growth when compared to the average growth of the market. The mean value of ROA is 0.0612 with a range of −1.7290 to 8.2510. Although the average value of ROA is relatively small, the value of ROA is positive, indicating that the companies in the sample can create value for shareholders within the time period of this study. A positive value indicates that the assets of the company also have been effectively used in generating surplus revenues. Lower ROA may indicate that most of the companies are companies that have large assets (asset-intensive firms). If so, then the company needs greater funds to be invested in the business in order to generate higher revenue. Based on the common rule, ROA is less than 5% may indicate that the company is a company-based assets (asset-heavy firms), for example, manufacturing companies, telecommunications companies, transportation companies, and others; while ROA value greater than 20% indicates that the company is a company not based assets (asset-light firms), as an example of advertising companies, software companies and others. So it can be concluded that the companies used in the sample are mostly heavy-assets firms.
The mean value of audit committee is 2.8624 with a range of two to six suggesting that most of the firms have a smaller number of audit committee serves on the boardroom. The mean value of (1) Firm Value it = 0 + AudCom it + NomCom it + Firm Size it + Industry Dummy it + Ownership Type Dummy it + it nomination committee is 2.6866 with a range of zero to three suggesting that most of the firms have a relatively moderate number of three members of nomination committee. The mean value of audit committee meeting is 1.3484 with a range of 0 to 10 suggesting that audit committee only have one meeting in one-quarter. The mean value of firm size 15.184 with a range of 9.5824 to 19.350 suggesting that most of the firms in the sample have relatively higher assets.  As can be seen in Table 2, the audit committee coefficient for Tobin's Q is a positive and significant, while it is positive and non-significant for ROA, suggesting that the mixed measured of book and market is viewed more reliable for investors as it indicates the overall performance of accounting and market measure. The positive result indicates that the larger the audit committee member the higher the firm value as measured by Tobin's Q. This result is consistent with Bozec (2005), Siallagan and Machfoedz (2006), Kyereboah-Coleman (2008), Bauer et al. (2009) andAl-Matari et al. (2012) which found that audit committee members have a significant effect on firm value. The existence of audit committee in a firm is currently seen as merely a catering tool to meet the corporate governance requirement. Thus, the number of the audit committee on board is inessential as the presence of audit committee has no effect on firm performance and thereby its' presence can be considered as a mere embellishment. Size does not matter as far as the independency, the quality and the commitment of the audit committee members to perform their duty is carried out by all means, and in the end, size indeed is a matter if all those three things have been met. The audit committee in Indonesia should comprise at least three audit committees in which two of the committees are independent, and even though this has been met, practically they choose the independent audit committees based on the collegial or kinship, and hence it can be difficult for that person to carry out the duty as independent as they should be. This trivial matter does not only stop in this stance as even though they can be independent, the independent audit committees members occupied the audit committee position in few firms, then they spent less time to perform their duty in those firms. Further, the problem does not lie only on the size of the audit committee members as the internal and external auditors were chosen based on the collegial and kinship and they carry out the duty based on the needs of firm's management, and in the end, it frequently led to financial fraud. In conclusion, the audit committee size would be important if it comes along with the independency, the quality and the commitment of the audit committee members.
The nomination committee coefficient for Tobin's Q is negative and significant while it is negative and non-significant for ROA. The negative result indicates that the higher the number of nomination committee the lower the firm value. The role of nomination committee in Indonesia is to assist the board management in determining the selection criteria of directors' candidacy, to evaluate and nominate the prospective candidates, and also to facilitate the selection of new directors by shareholders. The nomination committee members comprise at least three nomination committees in which two of the members are independent committees. The independency of nomination committee members is aimed at ensuring that the directors can perform the selection process effectively. However, in fact there are few firms that still have no nomination committee in the board management. Though there is nomination committees member in the company, it gives no guarantee that the selection process of the directors' candidacy would be based on the independency and fairness as we are unable to deny the culture lies in our society in particular for family firms that the collegial and kinship play the role. Therefore, the negative results may be due to the fact that this nomination committee is a burden as it adds additional cost to the company since the role is not performed well.
The audit committee meeting coefficient for Tobin's Q and ROA is positive and non-significant, suggesting the more frequent the meeting the higher the firm value. As can be seen in Table 1 that the mean of audit committee meeting is 1 with a range of 0 to 10, suggesting that firms have a low frequency of audit committee meeting, and it is truly startling that few firms have no audit committee meeting, this may be the cause of the non-significant result. It seems possible due to the fact that most audit committees occupied the position in few firms and hence they have less time to perform their duty. The function of audit committee is to oversee the financial statement reporting process and external auditing, to oversee the risk management and corporate governance practices in the company, therefore the frequency of the meeting should be taken at least once in a quarter as stipulated in the corporate governance regulation. However, it practically depends on the firm's need and the company's policy and regulation of the corporate governance practice.
The firm size coefficient for total debt is positive and significant for Tobin's Q and ROA, suggesting that larger firms with higher assets' tangibility have higher firm value with the higher number of audit committee members. Apart from Industry 2, 3 and 4, all industries exhibit a positive and significant result for Tobin's Q, while for ROA only Industry 5 and Industry 7 exhibit a positive and significant result. For ownership status, all type ownership (state-owned enterprise, privately owned enterprise, foreign-owned enterprise) yield a positive and significant result for Tobin's Q while it yields non-significant results for ROA.

Conclusions
In the last few decades, there has been a considerable theoretical emphasis on the committees serve on the boardroom. This paper is an attempt to empirically test for the role of committee for firm value in the Indonesian context in which this study examines a recent data-set of Indonesian Sharia-based firms Index. Using GLS, the results revealed that the audit committee and the nomination committee have a significant impact on firm value (Tobin's Q). The non-significant result for ROA suggesting that the mixed measured of book and market is viewed more reliable for investors as it indicates the overall performance of accounting and market measure. Meanwhile the result of the number of audit committee meeting yielded no significant impact on firm value; this may be due to no restrictions on the number of positions of audit committee serves in firms, therefore, the auditor may be manifold in some companies which can be overlapping. Further, the number of audit committee only meets the regulations and yet the transparency is still beyond far. In addition, there is no clear rule and criteria regarding the process of audit committee selection since it is carried out in accord with the management preferences so that the corporate governance conduct have not been implemented to the fullest. Moreover, the absence of clear sanctions for companies that do not implement the full corporate governance, such as the number of audit committee and nomination committee that is below standard, there are even some companies that do not have a nomination committee, causing no effective implementation of corporate governance.