American Journal of Humanities and Social Sciences Research (AJHSSR) 2021 AJHSSR Journal Page | 555 American Journal of Humanities and Social Sciences Research (AJHSSR) e-ISSN :2378-703X Volume-5, Issue-2, pp-555-563 www.ajhssr.com Research Paper Open Access The Effect of Implementing Good Corporate Governance Principles, Tri Hita Karana Culture and Organizational Commitments on LPD Financial Performance Kadek Mitananda Pradnya Nugraha 1 , I Ketut Suryanawa 2 12 (Faculty of Economics and Business, Udayana University, Indonesia) ABSTRACT : Economic development at the village level is realized through the establishment of Lembaga Perkreditan Desa (LPD) to help empower the village boarding economy through targeted savings and provision of effective capital. The purpose of this study is to explain the effect of applying the principles of good corporate governance, tri hita karana culture and organizational commitment on LPD financial performance. The population in this study were 35 LPDs in Denpasar City. Sampling was done by using non-probability sampling techniques and saturation sampling methods (saturated samples). Respondents in this study were Pamucuk and Panureksa. The data in this study were obtained through questionnaires and LPD financial reports in 2019. The data analysis technique used was multiple linear regression analysis. The results showed that the principles of good corporate governance, tri hita karana culture and organizational commitment had a positive effect on LPD financial performance. This means that the better the application of the principles of good corporate governance, tri hita karana culture and organizational commitment to the LPDs in Denpasar City, the more likely it is to improve the LPD's financial performance. Keywords: financial performance, good corporate governance principles, tri hita karana culture, organizational commitment I. INTRODUCTION The Lembaga Perkreditan Desa (LPD) is a financial enterprise belonging to the Pakraman village which carries out its operational activities in the local village environment. LPD has a function in terms of empowering the village court economy through targeted savings and providing effective capital. Basically, LPD work practices are not much different from other financial institutions, both formally and informally. LPD aims to increase company value which is reflected in the profit generated. According to Sastra and Erawati (2017), an LPD that produces better profits will have an impact on the economy where the LPD is growing. The effectiveness and efficiency of the operational activities of an organization can be assessed from its financial performance (Muhammad Arifin, 2015). LPD problems can generally be seen through their low financial performance (Yasa et al., 2018). LPD financial performance is generally measured by the profitability ratio, through the measurement of Return on Assets (ROA). This is because the LPD is an organization that relies on the absorption of assets, so that all assets are assumed to generate profits. ROA is a financial ratio that is generally used to measure overall profitability. Based on data obtained from the Empowerment Institution of Lembaga Perkreditan Desa (LP LPD) in Denpasar City, the amount of public funds collected in LPDs in Denpasar City as of December 2019 was IDR 2,121,103,030. These funds are classified into two types, namely savings and time deposits. The following is data regarding the development of LPD funds in Denpasar City during 2015-2019 which can be seen in Table 1. Table 1 Development of LPD Funds in Denpasar City from 2015-2019 (in thousands of rupiah) Year Funds Savings Deposits 2015 587.616.686 525.244.255 2016 682.064.859 629.574.187 2017 06.224.194 755.099.488 2018 949.353.974 912.064.908 2019 1.069.396.529 1.051.706.501 Source: LP LPD Denpasar City, 2020