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INDONESIA
CORPORATE GOVERNANCE AFTER
ASIAN FINANCIAL CRISIS
Presented by:
R A J A A B U M A N S H U R M AT R I D I810083
S H A H R I L B U D I M A N810089
J U N R I A N A810058
SEMINARISSUES AND
CHALLENGES IN CORPORATE GOVERNANCE
COLGIS MPM ROOMSUNDAY, 16 DECEMBER 2012
.Corporate governance pillar
. Indonesia Corporate Governance Timeline
.The causes of financial crisis In Indonesia
.Asian corporate governance association towards Indonesia CG
INDONESIA CORPORATE
GOVERNANCE AFTER ASIAN FINANCIAL CRISIS
Presented by:
RAJA ABUMANSHUR MATRIDI810083
SHAHRIL BUDIMAN810089
JUNRIANA810058
CONTENTS
OF
INTRODUCTIONUnderstanding Corporate Governance
OF
Fairness
Accountability
Responsibility Transparency
Kaen,Shaw, 2003
Independency
O E C D
INDONESIA CORPORATE GOVERNANCE
1997 Indonesia suffered
economic depression up to 80%
1998 Index of
corporate governance
In Indonesia was have minimum
score (2,88) rather than Singapore
(8,93), Malaysia (7,72) and Thailand
(4,89)
1999 Indonesia government establish
National Committee
of Corporate Governance
And started draft of
ICGCGP
2000Jakarta Stock
Exchange (JSX),
Released Regulation
about improving implement
ation of CG and ICGCGP
completed by NCCG
2001 NCCG release the final
of ICGCGP
2004NCCG
transformed to
National Committe
e on Governance (NCG)
2005WorldBank
issued Reporting on
the observance of standards and codes (ROSC) on accounting
and auditing standards of Indonesia
2006 NCG make revision for
ICGCGP and Bank Indonesia amended the
good corporate governance regulation
mainly to do with the roles and duties of the Board of
Commissioners and the Board
of Directors
TIMELINE
1996, Indonesia had
more than
200 Banks
199716 Bank Closed, followed by
38 banks in 1999
2004 Bank Dagang Bali and Bank Aspac were
liquidation
2005 Bank Global closed
INDONESIA CORPORATE GOVERNANCE Factors causing the crisis in Indonesia:
First, concentration of ownership
Second, ineffective oversight
Third, lack of transparency in the implementation of corporate mergers and acquisitions
Fourth, overly high dependency on external funding
Fifth, inadequate supervision by the creditors
Asian Development Bank (Daniri, 2006)
Establish a national policy • 2004: Sectoral code, audit commitee code, commissioner independent code• 2006: to create a check and balance situation, enforcement of transparency
and accountability, and realization of social responsibility for the company's survival
Enhance the regulatory framework • 1998, Indonesia Bank act• 1999, anti corruption act• 1999, competition act• 2003, SOEs act
Build a private sector initiative
Daniri (2006), Rifai (2009)
Three activities of Indonesia government in implementing CG:
Indonesia Code Of
Assessment of development Corporate Governance In Indonesia
Assessment of development Corporate Governance In Indonesia
Commitment
Transparency
Accountability
Responsibility
Independence
Fairness
Competence
Mission
Leadership
Collaboration
What is the results ofIndonesia’s Code of good corporate governance
Reference• Daniel. (2003). Corporate Governance in Indonesian Listed Companies – A Problem of LegalTransplant , 15
Bond Law Review.
• Hanazaki, Masaharu., Liu, Qun. (2003, July). The Asian Crisis and Corporate Governance:Ownership Structure, Debt Financing, and Corporate Diversification. Center for Economic Institutions Working Paper Series Number 2003-18.
• Kaihatu, Thomas S. (2006, March). Good Corporate Governance and their Application in Indonesia. Journal Management and Entrepreneurship, Volume 8, Number 1, pp. 1-9.
• Kamal, Miko. (2011) Concept of Corporate Governance in Indonesia: Study of Corporate Governance Code. Journal Management Technology, Volume 10, Number 2.
• Kurniawan, Dudi M., and Indriantoro, Nur. (2000). Corporate Governance in Indonesia. From The Second Asian Roundtable on Corporate Governance: The Role of Disclosure in Strengthening Corporate . Governance and Accountability. Hongkong, China.
• Lemmon, Michael., and Lins, Karl. (2001, April) Ownership Structure, Corporate Governance, and Firm Value: Evidence from the East Asian Financial Crisis. William Davidson Working Paper Number 393.
• Lukviarman, N. (2004). Implementation Constraints of Good Corporate Governance in Indonesia.
• Study Team. (2010). Study about Guidance of Good Corporate Governance in Countries’ Member of ACMF. Jakarta: Ministry of Finance of Republic Indonesia, National Agency of Capital Market, and Financial Institutions.
• Tabalujan. (2002). Why Indonesian Corporate Governance Failed – Conjectures Concerning Legal Culture. 15 Columbia Journal of Asian Law
THANKS FOR YOUR AT T E N T I O N