This research aims at finding out the impact of the audit committee's competence and the impact•of the corporate governance policy committee's existence on financial distress of the banking institutions listed at the Indonesia Stock Exchange in the years of2006-2010. The variable of the audit committee's competence is measured based on the committee's educational background and their job resume in accounting and finance; the variable of corporate governance policy committee is measured with its existence; and, the variable of financial distress is measured with
the proxy of interest coverage ratio. Logistic regression is used to test the hypothesis. The result shows that audit committee's competence influences negatively on the condition of financial distress; meanwhile, corporate government policy committee's existence does not influence the condition of financial distress.