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

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