The ideal board remuneration issue has always been a challenge in many countries. The reason for looking at ideal board remuneration is that the ideal remuneration should have an impact on the
board performance and, in turn, lead to board effectiveness. However, the development of ideal board remuneration in Indonesian state-owned enterprises (SOE) has been based on relatively little research. Considering the relative importance attached by boards to a variety of governance tasks in SOEs, the primary aim of this article is to shed light on the extent of board remuneration impact performance
of the board in implementing good corporate governance in Indonesian SOEs. The exploratory nature of this study led to the adoption of a qualitative research methodology that uses semi-structured
interviews and publically available documents to collect a range of data pertaining board remuneration
and the work of boards. Interviews were conducted with six informants from four Indonesian SOEs
and Ministry of SOEs. The findings of this research demonstrate that the current Indonesian SOEs
board remuneration system is not adequate as well as has a negative impact on the performance of the
board. This was due to demotivation of active members and conflict of interest among members of
the board, peculiarities to the performance of individual members of the board of commissioners.
This study makes a significant contribution to both the board and the corporate governance field by
addressing the basic research gaps of board remuneration issues in SOEs. The gap is addressed by providing a more coherent framework for effective board remuneration system that reflects more clearly
the real experiences of those involved at the board level.
Sari S. A and Tjoe T. F. (2017). Board Remuneration and Good Corporate Governance in Indonesian State-Owned Enterprises (SCOPUS). Global Business Review, 18 (4), 1-15.
Board remuneration, board of commissioners, Indonesian stated-owned enterprises, good corporate governance