A Challenge In Implementing Good Corporate Governance In Family-Controlled Listed Companies In Indonesia  

Oleh:

Daihani, Dadan Umar ; Darmawan, Johan

Jenis: Article from Proceeding
Dalam koleksi: Proceeding The 7th International Seminar on Industrial Engineering and Management (7th ISIEM) di Bali, March 11th – 13th, 2014, page IM 80-88.
Topik: Good Corporate Governance; concentrated ownership; dispersed ownership; Corporate Governance Scorecard
Fulltext: Paper 55 Dadan Umar Daihani Trisakti University.pdf (271.88KB)

Isi artikel

Good Corporate Governance (GCG) is one key element in improving economic efficiency and growth as well as enhancing investors’ confidence. Corporate Governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. The development of GCG in Indonesia and in the Asian countries in general became increasingly important especially after the 1997 Asian Crisis. Countries with relatively poor corporate governance such as Indonesia, Thailand, Malaysia and South Korea, in fact experienced more severe impact compared with countries with a better corporate governance standard such as Singapore and Hong Kong.The experts believe, that those crisis has been amplified due to the unsatisfactory performance of the Board of Commissioners in controlling and stewarding the shareholders’ interest, especially that of minority’s. It is a given fact that majority of companies in Indonesia (listed or not) own concentrated ownership feature. Hence, in orther to implement of the GCG principales in Indonesian’s companies, It is unrealistic to suggest that the companies must be transformed to become dispersed ownership enterprises. Regarding to this facts, the purpose of this study is to investigate if concentrated ownership affects the implementation of corporate governance in listed companies in Indonesia. The data are gathered based on a variety of publicly available information, such as annual report, Indonesian Security Exchange Commission (BAPEPAM) filing and Indonesia Stock Exchange filing. The analytical instrument used to measure the good corporate governance practice is named Corporate Governance Scorecard, promulgated by OECD. The final objective of this study is expexted to find out if the legislation and effective law enforcement can mitigate the negative effect of concentrated ownership on corporate governance practice

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