TITLE

The Impact of Board Structure to the Roles of Board of Commissioners in Implementing Good Corporate Governance at Indonesian State‐Owned Enterprises

TYPE

Journal Article

Abstract

This study discusses the impact of board structure to function of board of commissioners in the implementation of good corporate governance. The research focuses on the issues of corporate governance in Indonesian state‐owned enterprises where the majority/all of the shares are still owned by the government. The reformation to achieve good governance in Indonesian state‐owned enterprises has been conducted since 2002 including the improvement of the board structure to achieve the board effectiveness. However, many fraud cases over the Indonesian State‐Owned Enterprises have still occurred. Most of these fraud cases happened as a result of the board of commissioner weak control against the board of management. The primary aim of this paper is to shed light on the extent of the board structure impact upon the effectiveness of the board of commissioner in controlling and monitoring the board of management at Indonesian stateowned enterprises by analyzing three characteristics of board structure, namely size, composition, and diversity. Being exploratory in nature, this study uses qualitative method for data collection in order to enhance an understanding of the real practices of board of commissioner. A triangulation method was used for data collection, including semi‐structured interviews with 21 informants from 10 state‐owned enterprises. The findings in this research demonstrate the existing board structure did not highly impact to the roles of the board of commissioner. This was due to professionalism and personal characteristics of the members of the board of commissioner, peculiarities over selection and nomination process over members of the board of commissioners, and the culture of Indonesian State‐Owned Enterprises

Citation

Sari S. A, Kuncoro D. E. A and Sarjono H.. The Impact of Board Structure to the Roles of Board of Commissioners in Implementing Good Corporate Governance at Indonesian State‐Owned Enterprises, .

Keywords

board structure, board of commissioners, stated‐owned enterprises, good corporate governance

Author

  • Dr. Engkos Achmad Kuncoro
  • Haryadi Sarjono

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