Abstract
This study examined how corporate governance mechanisms moderate the relationship between firm size and financial distress in Indonesia. Departing from prior research that dichotomizes firms, we employ a continuous moderation framework to capture how governance effectiveness varies across the firm size spectrum. Using panel data regression on 480 firm-year observations from Indonesian manufacturing firms (2019–2023), we test the moderating effects of managerial ownership, institutional ownership, audit committee size and independent commissioner proportion on the size-distress relationship. Firm size significantly increases financial distress risk, challenging the ‘too-big-to-fail’ assumption. Managerial ownership (β = 0.300, p 0.10), indicating symbolic rather than substantive independence. Governance quality, not merely quantity, determines financial resilience. Ownership-based mechanisms prove more effective than board-based mechanisms in mitigating distress risk. Regulators should prioritize ownership structure disclosure over quantitative board composition requirements; investors should incorporate governance-quality assessments into risk evaluation; managers should recognize that ‘more governance’ does not necessarily mean ‘better governance’.