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Application of Good Corporate Governance Principles in the Appointment of the Board of Commissioners in State-Owned Enterprises to Actualize Sustainable Development

In: Proceedings of the 1st Brawijaya International Conference on Business and Law (BICoBL 2022)

Author

Listed:
  • Mohamad Fajri Mekka Putra

    (Universitas Brawijaya, Doctoral Program in Law)

  • Sihabudin

    (Universitas Brawijaya, Faculty of Law)

  • Budi Santoso

    (Universitas Brawijaya, Faculty of Law)

  • Reka Dewantara

    (Universitas Brawijaya, Faculty of Law)

Abstract

This perspective paper presents the existence of State-Owned Enterprises (SOE) as business entities that have an important role in economic development in Indonesia related to the livelihood of many people, whose entire or most of the capital is owned by the state through direct investment originating from separated state assets. After the COVID-19 pandemic, the existence of SOEs became more important in order to be the driving force for Indonesia’s economic recovery. The organs of SOEs generally consist of the General Meeting of Shareholders (GMS), the Board of Commissioners, and the Board of Directors. The Board of Commissioners generally plays an important role, namely the supervisory function on the management of SOEs that is adjusted to the principles of Good Corporate Governance (GCG), therefore the appointment must be made through an election in accordance with the laws and regulations. However, in practice, the nomination and appointment of the Board of Commissioners in SOE in some cases is not in accordance with the provisions, causing the elected Commissioner to have concurrent positions. The purpose of this study is to prevent concurrent positions in SOEs, with a comparison to other countries law and implementation on this matter. This study highlights the limitations/criteria for the placement of the Board of Commissioners in SOEs based on GCG principles, and regulatory reformulation regarding the placement of the Board of Commissioners in SOEs in accordance with GCG principles.

Suggested Citation

  • Mohamad Fajri Mekka Putra & Sihabudin & Budi Santoso & Reka Dewantara, 2023. "Application of Good Corporate Governance Principles in the Appointment of the Board of Commissioners in State-Owned Enterprises to Actualize Sustainable Development," Advances in Economics, Business and Management Research, in: Adi Kusumaningrum & Airin Liemanto (ed.), Proceedings of the 1st Brawijaya International Conference on Business and Law (BICoBL 2022), pages 123-135, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-214-9_14
    DOI: 10.2991/978-94-6463-214-9_14
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