Introduction*
Corporate governance
is applied to State-Owned Enterprises to improve company performance. The
importance of corporate governance is to overcome agency problems by management
affecting employee satisfaction and ultimately forming an engagement attitude
on Employees (Mochamad Muslih, 2020). By implementing corporate governance, it
is expected to improve performance because company performance is a benchmark
of competitive advantage (Winda Widyanty et al., 2020).
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If we look
at the current state of State-Owned Enterprise It
cannot be separated from the accusation of political and bureaucratic
restraints although some State-Owned Enterprises already have diverse
shareholders. Corporate governance of State-Owned Enterprises is in the
spotlight following the continued presence of officials in the state-owned
enterprises involved in corruption cases. Seeing the phenomenon of several
State-Owned Enterprises caught in corruption cases, there should be attention
from state-owned companies to improve governance improvements. A series of
legal cases faced by State-Owned Enterprises directors seemed to show that
state-owned corporate governance had not improved from year to year.
These State-Owned Enterprises corruption cases
are all the same cases as our State-Owned Enterprise corruption cases in the
past. In the past, our state-owned companies have managed their businesses to
be controlled and intervened with a political-bureaucratic approach that is no
different from other government agencies, such as funds sourced from the state
budget, civil servants, inward-looking programs to bureaucracy, poor services,
and entrenched corruption.
The Organization for
Economic Co-operation and Development (2005, 2015) illustrates that State-Owned
Enterprises have difficulty developing due to excessive state intervention in
company management, especially when there is a conflict of interest in leadership
multi-levels, many of the goals of shareholders are in line with politicians
and bureaucracy's lack of understanding of the direction of progress and
State-Owned Enterprise business risk (Ukhiya Rana, 2019).
This demand as a
result of the old patterns of governance was felt to be no longer appropriate
for the changing social order or in other words the ineffectiveness of
governance in addition to the development of the quality of democracy, human
rights and public participation in the framework of public services (Muhammad
Amirul Haq Muis, 2014).
The many roles that
must be carried out by State-Owned Enterprises simultaneously reflect the lack
of clarity as to what roles State-Owned Enterprises must do in optimizing
public services. The main problem faced by State-Owned Enterprises at the
moment lies in governance and professionalism because State-Owned Enterprises'
performance is demanded by professionals as well as the private sector.
The practice of
bribery between State-Owned Enterprises can be very detrimental to State-Owned
Enterprises and is at the same time a very sad practice because it should be
with stronger GCG obligations and standards in State-Owned Enterprises that can
be an example of corruption prevention practices in the private sector. The
Ministry of State-Owned Enterprise, but why do corruption cases still occur so
often in the State-Owned Enterprise environment.
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THEORY/ LITERATURE REVIEW
Definition of state-owned
enterprise
Another definition of State-Owned
Enterprise based on Article 1 paragraph 1 of Act No. 19 of 2003 concerning
State-Owned Enterprises is "a business which is wholly or most of its
capital owned by the state through direct participation from the separated
state assets".
Law Number 19 of 2003 concerning State-Owned
Enterprises explains that the implementation of the role of business entities
is very instrumental in the national economy to optimally optimize the welfare
of the community so that the management and supervision must be done
professionally based on good corporate governance.
Definition of good corporate governance
An organizational culture based on the
values of Good Corporate Government (GCG) can create a conducive work
environment and can trigger employee job satisfaction and improve employee
performance (Setyo Riyanto
et al., 2019).
According to the Cadbury Committee of the
United Kingdom (1922), Good Corporate Governance is: "A set of regulations
governing the relationship between shareholders, managers (managers) of the
company, creditors, government, employees, as well as other internal and
external stakeholders related to rights their rights and obligations or in
other words a system that directs and controls the company ". Muh. Effendi (2009) in his book The Power of Good Corporate
Governance, the understanding of GCG is a system of internal control of the
company that has the main goal of managing significant risks to meet its
business objectives through securing company assets and increasing the value of
shareholders' investments in the long term.
According to Monks and Winow
in Tricker (2009: 39) in (Myrza
Pahlevi et al, 2016), Good Corporate Governance (GCG)
is "the relationship among various participants in determining the
direction and performance of corporations. The primary participants are the
shareholders, the management and the board of directors "(the relationship
between various parts within the company in determining the direction and
performance of the company, where the main parts are shareholders, management
and the board of directors).
From some of the definitions stated above
it can be concluded that corporate governance is a system, process and set of
regulations that are built to direct and control the company to create a good,
fair and transparent relationship between the various parties involved and have
interests (stakeholders) in the company.
Issuance of Decree of the Minister of
State-Owned Enterprises Number: KEP-117 / M-MBU / 2002 concerning the
Implementation of Good Corporate Governance Practices in State-Owned Enterprises.
State-Owned Enterprise Minister Decree No. Kep-117 / M-MBU / 2002 in Article 2
paragraph 1 decides to oblige State-Owned Enterprises in Indonesia to
consistently apply GCG principles and / or make GCG principles an operational
basis.
The definition of Good Corporate Governance
(Good Corporate Governance) according to the Regulation of the Minister of
State-Owned Enterprises Number: 01 / MBU / 2011 are "principles that
underlie a process and mechanism of corporate management based on laws and business
ethics". The principles of Good Corporate Governance referred to in the
Regulation of the Minister of State-Owned Enterprises Number: 01 / MBU / 2011
are:
1) Transparency ;
2) Accountability;
3) Responsibility ;
4) Independency;
5) Fairness
Then made changes to the Regulation of the
Minister of State-Owned Enterprises Number PER-01 / MBU / 2011 namely the
Regulation of the Minister of State-Owned Enterprises Number PER-09 / MBU /
2012 of 2012 Regarding the Implementation of Good Corporate Governance in Owned
Enterprises Country.
Method
GCG-related regulations set by the Ministry of State-Owned Enterprises should be able to improve the performance of State-Owned Enterprises. According to (Mochamad Muslih, 2020) Corporate governance should have a positive effect on company performance. Thus the efforts made by the Ministry of State-Owned Enterprises to implement corporate governance in State-Owned Enterprises are not in vain. Corporate governance that has been applied was successful in driving company performance. Following its objectives, governance will improve company performance. Performance can be in the form of profit, an increase in stock prices, and corporate image.
The following table can be used to find out how effective the existing regulations related to the implementation of GCG in the State-Owned Enterprise environment are related to corruption committed by State-Owned Enterprise officials.
Table 1. Corruption Acts by Agency
Source:https://acch.kpk.go.id/id/statistik/tindakpidana-korupsi/tpk-berdasarkan-instansi
Table
2. Criminal Acts Based on Corruption Institutions
Source:https://www.kpk.go.id/images/Integrito/LampiranLaptah2019/PENINDAKAN.pdf
Table 1 and Table 2, if connected with the
appeal from the Government regarding the Implementation of Good Corporate
Governance in the following regulations:
1.Decree of the Minister of State-Owned
Enterprises Number: KEP-117 / M-MBU / 2002 concerning the Implementation of
Good Corporate Governance Practices in State-Owned Enterprises. State-Owned
Enterprise Minister Decree No. Kep-117 / M-MBU / 2002 in Article 2 paragraph 1
decides to oblige State-Owned Enterprise in Indonesia to consistently apply GCG
principles and/or make GCG principles an operational basis. In 2004, there is
no State-Owned Enterprise corruption, but in 2005 there was 4 corruption and in
2006 and 2007 there was zero corruption. After 2007 every year there were
trends in corruption varying to 2011.
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2.Regulation
of the Minister of State-Owned Enterprises Number PER - 01 / MBU / 2011
concerning the Implementation of Good Corporate Governance in State-Owned
Enterprises. In 2012 there was only 1 corruption.
3.Regulation of the Minister of State-Owned
Enterprises Number PER-09 / MBU / 2012 of 2012 Amendment to the Regulation of
the Minister of State-Owned Enterprises Number PER-01 / MBU / 2011 Regarding
the Implementation of Good Corporate Governance in State-Owned Enterprises. In
2013 and 2014 there was zero corruption but next, there was a corruption that
varied until 2018.
results
and discussion
The GCG Implementation Regulation has been
established by the Ministry of State-Owned Enterprises, but in accordance with
the corruption table of the Corruption Eradication Commission, when the
regulation was enacted it only had a positive influence at the beginning of its
emergence, over time the Gratification and Corruption Practices still occur
within the State-Owned Enterprise environment. This means that the
implementation of GCG is not going well and the supervision of the
implementation is not consistent.
The evaluation of governance should not
only be carried out by the State-Owned Enterprise itself. However, the role of
the Ministry of State-Owned Enterprises, in this case, the government must be
able to conduct detailed evaluations and periodic monitoring related to the
implementation of this GCG, while the assessment is carried out by independent
assessors who are competent and accountable. Synergy is needed with the
government's commitment to forcing State-Owned Enterprises to implement GCG
transparently and accountably, with a high level of professionalism and
effectiveness. One of them is by the commitment of the Cooperation with the
Corruption Eradication Commission to counter corruption and improve the
implementation of GCG in the State-Owned Enterprise environment.
conclusion
State-Owned Enterprise plays a
role as implementing public services, distribution of resources that control
the lives of many people is expected to be a pioneer in the business sector
that has not been interested in by the private sector and a source of state
revenue. This role can be realized if the State-Owned Enterprise in its
objectives can implement the principles of Good Corporate Governance (GCG)
well. However, a series of corruption cases committed by State-Owned Enterprise
officials occurred, one of which was due to the intervention of State-Owned
Enterprise business management.
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This is not in line with the regulations
established by the Ministry of State-Owned Enterprise related to the
implementation of GCG within the State-Owned Enterprise environment. It is as
if the regulation only has the power to regulate at the beginning of its
stipulation, but afterward it is not obeyed by State-Owned Enterprise because
there is no consistent supervision in its implementation.
references
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https://acch.kpk.go.id/id/statistik/tindak-pidana-korupsi/tpk-berdasarkan-instansi
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