COMPETITIVE ADVANTAGE AS A MEDIATOR of THE RELATIONSHIP BETWEEN COMMISSIONER EDUCATIONAL BACKGROUND AUTHORITY AND FINANCIAL PERFORMANCE

Abstract

This study examines the influence of commissioners’ educational background on financial performance with competitive advantage as a mediating variable. The research problem arises from inconsistent empirical findings regarding whether commissioners’ qualifications strengthen corporate decision-making and contribute to superior financial outcomes. Using a quantitative causal design, this study investigates companies in the energy manufacturing sector from 2020 to 2024. Secondary data were collected from annual reports, and a total of 426 firm-year observations were obtained based on purposive sampling. Panel data regression using the Random Effect Model was applied to test the hypotheses. The empirical results reveal that the educational background of commissioners has a negative and significant effect on market-based financial performance, indicating that higher education levels do not necessarily translate into effective supervisory roles. The findings also show that competitive advantage significantly mediates the relationship between commissioners’ education and financial performance, suggesting that educational attainment alone is insufficient to generate competitive strength without alignment to strategic business needs. Overall, the study concludes that while corporate governance through commissioners’ education plays an important supervisory function, it does not automatically enhance competitive positioning or financial outcomes. These results highlight the need for aligning expertise with strategic competencies to create sustainable competitive advantage.

Keywords: Corporate Governance, Commissioners Education, Competitive Advantage, Financial Performance.