[48] Peer-Reviewed Article Jurnal Keuangan dan Perbankan Volume 25, Issue 1 2021, page. 48 - 62 ISSN: 1410-8089 (Print), 2443-2687 (Online) DOI: https://doi.org/10.26905/jkdp.v25i1.4974 Corporate Governance and Dividend Policy in the Banking Sector on the Indonesian Stock Exchange Muhamad Umar Mai 1* , Mochamad Edman Syarief 2 1,2 Department of Accounting, Bandung State Polytechnic, Indonesia *Corresponding Author: umar.mai@polban.ac.id Abstract This study is aimed at exploring the impact of corporate governance on dividend policy. The study was undertaken on the banking sector indexed in Indonesian Stock Exchange from 2009 to 2019. The method of data analysis used logistic regression and ordinary least squares regression. The findings demonstrated that four of five criteria of Corporate Governance had a major impact on dividend policy, such as propensity to pay dividends and dividend pay-out ratio. Institutional ownership, board of directors’ size and audit committee size have a positive influence on propensity to pay dividends while the female board of directors has a negative effect. This study did not show that independent board of commissioners had a substantial impact on the propensity to pay dividends and dividend pay-out ratio. The findings of this research contribute to the financial literature, in particular the relationship between corporate governance and dividend policy. These findings should be properly taken for consideration among investors when making decisions on their investments. Keywords : Corporate governance, dividends policy and banking sector. JEL Classification : G21, G32 1. INTRODUCTION Dividend policy is one of the topics that gain the most controversy till now. Financial academics are very involved in the discourse of dividend policy which offers extensive theoretical modeling and ongoing empirical research (Al-Najjar & Kilincarslan, 2019). Even though research on dividend policy has been extensively studied, it is difficult to grasp an understanding of factors that influence dividend policy and the relationship between these variables (Rajput & Jhunjhunwala, 2019). Over 40 years ago, Black (1976) suggested that the more focused we pay attention to the image of dividend, the more it looks like a puzzle whose pieces are different. Even though Black (1976) had come to such a conclusion over 40 years ago, his statement remains true, evidences, and theories of dividend policy have not been developed yet.