Applications of good corporate governance relating to shareholders, commissioners, and directors of limited liability companies in Indonesia
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Author(s)Joseph Andy HartantoLink to ORCID Index: https://orcid.org/0000-0001-9142-0067
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Sulaksono SulaksonoLink to ORCID Index: https://orcid.org/0000-0001-6397-6391
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DOIhttp://dx.doi.org/10.21511/ppm.17(3).2019.33
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Article InfoVolume 17 2019, Issue #3, pp. 410-420
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This critical analysis seeks to explore the inclusivity and feasibility of the legal application of organizational governance principles related to limited liability companies (LLCs) in Indonesia, which are considered essential pillars of Indonesia’s economic stability. The investigators employed the non-probability purposive sampling to select 150 study participants from a population of 250 administrative panel members working in PT Bank Rakyat Indonesia and PT Bank Mandiri. Structured and semi-structured questionnaires were constructed and distributed online through emails. The subjects’ responses were coded manually, using the NVivo software for ease of analysis. The result showed that (1) 84.5% of participants believed that ineffective relationship building approaches, corruption, and inadequate information disclosure mechanisms among internal and external shareholders formed the main challenges to implementation of corporate governance principles in Indonesian LLCs, (2) 97.8% of the respondents believed the Indonesian Company Law (ICL) had achieved significant milestones in guiding the application of sound corporate governance principles by explicitly outlining the roles and responsibilities of stakeholders and providing sufficient protection for minority stakeholders, and (3) 78% of participants agreed that the ICL has introduced and reinforced critical rights and protections to shield shareholders from unfair regulations internally formulated by a company. In its findings, the investigation confirmed that poorly structured information sharing systems, fraud, and ineffective relationship building were the main factors that contributed to current inadequacies. 84.5% of the respondents believed that ineffective relationship building approaches, corruption, and inadequate information disclosure mechanisms among internal and external shareholders formed the main challenges, trends, and issues to the implementation of corporate governance principles in Indonesian LLCs. The study also confirmed that the implementation of GCG related legislations had reinforced the professional duties and obligations of stakeholders, alongside offering legal protections for minority business actors.
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JEL Classification (Paper profile tab)K22, O16, G34
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References57
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Corporate governance and financial performance in Islamic banks: the role of the sharia supervisory board in multiple-layer management
Banks and Bank Systems Volume 14, 2019 Issue #4 pp. 183-191 Views: 2174 Downloads: 381 TO CITE АНОТАЦІЯThis study aims to investigate the impact of Good Corporate Governance (GCG) on the financial performance of sharia banking. GCG is measured by the Board of Commissioners Performance, the Board of Commissioners Composition, the Number of Audit Committees, the Board of Directors, and the Sharia Supervisory Board Performance, whereas financial performance is proxied by Return on Assets, financing risk (Non-Performing Financing), and capital (Capital Adequacy Ratio). Sharia commercial banks registered by Bank Indonesia made the sample of this study. Annual reports and GCG reports of sharia commercial banks from 2014 to 2017 are used as a data source. The study uses a panel data regression approach to analyze the data; some interesting results have been obtained. The Sharia board positively affected financial performance of Islamic banks in terms of return on assets and capital adequacy ratio, and negatively as to non-performing financing. Similarly, the board of directors had a significant impact on the financial performance of Islamic banks in the same direction as the sharia supervisory board in terms of the three components. Meanwhile, the board of commissioners had a significant and positive impact only on the return on assets of Islamic banks in Indonesia.
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Corporate governance quality, firm size and earnings management: empirical study in Indonesia Stock Exchange
Yulia Saftiana , Mukhtaruddin ,
Krisna Winda Putri ,
Ika Sasti Ferina
doi: http://dx.doi.org/10.21511/imfi.14(4).2017.10
Investment Management and Financial Innovations Volume 14, 2017 Issue #4 pp. 105-120 Views: 1943 Downloads: 516 TO CITE АНОТАЦІЯEarnings management (EM) is manipulation done by management in preparing financial statement in order to gain management advantages or to increase the firm value. EM can reduce the quality of financial statements because it does not show the real earning periodical. This research aims to identify the effect of good corporate governance (GCG) (institutional ownership, managerial ownership, frequency of board meetings, frequency of audit committee (AC) meetings), firm size, and leverage on the EM. Population comprises the companies in LQ 45 index of Iindonesia Stock Exchange (IDX) for the period 2010–2014. Samples of the research were taken using purposive sampling method, and the variables are tested using multiple linear regression analysis. The results of the research show that partially, only leverage has significant effect on EM, while institutional ownership, managerial ownership, frequency of board meeting, frequency of AC meetings, and firm size have no significant effect on EM, but all of the variables have simultaneously significant effect on EM. Limitations of the research are the only used 6 independent variables and 21 companies as samples of the research.
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The impact of good corporate governance and Sharia compliance on the profitability of Indonesia’s Sharia banks
Nur Fitriana Hamsyi
doi: http://dx.doi.org/10.21511/ppm.17(1).2019.06
Problems and Perspectives in Management Volume 17, 2019 Issue #1 pp. 56-66 Views: 1904 Downloads: 365 TO CITE АНОТАЦІЯThis article aimed to observe the influence of Good Corporate Governance (GCG) and Sharia compliance on the profitability of Sharia banks in Indonesia. This study uses secondary data obtained from 2012 until 2016 with nine samples of Indonesia’s Sharia banks according to purposive sampling criteria. Data are processed by using data panel regression analysis. The independent variables used are the composite value of GCG, which is the result of the self-assessment of the Sharia bank, as well as the proxy of Sharia compliance, namely Islamic Income Ratio (IsIR) and Profit Sharing Ratio (PSR), while the dependent variable used is profitability with a Return on Equity (ROE) as the proxy. The results showed that GCG and PSR variables have negative values indicating that there is no influence of GCG and PSR on ROE, while the variable of IsIR influences ROE value. This study provides benefits in presenting useful information to assess the compliance of Islamic banks based on Sharia principles.
