BUMI Plc: Case of Contrasting Governance Cultures?

Malla Praveen Bhasa

South Asian Journal of Business and Management Cases, 2015, vol. 4, issue 2, 240-250

Abstract: For an inquisitive student of corporate governance, the BUMI Plc case offers an extraordinary insight into the nuances of contrasting corporate governance cultures and their associated problems. The marriage of the East–West governance models and its subsequent failure has brought to the fore the vulnerability of the Anglo-Saxonic corporate governance model in the face of entrenched relationships characterizing Eastern governance structures. Western investor Nat Rothschild joins hands with the Bakries of Indonesia to build a mining behemoth. Despite the Bakries’ supposed lack of governance integrity, Nat allies with them with the confidence that the demands of Anglo-Saxonic corporate governance model would play a great leveller in ironing out any mis-governance-related issues. Whether he was too confident of the Western model of governance, or on his own competence as a successful investor, or whether he failed to grasp and appreciate other models of governance is a matter of debate. Suffice it to say that Nat sensed a huge business potential in Indonesia, and despite a contrasting governance model followed by Indonesian businessmen, he partnered with them in the hope that at the end the Anglo-Saxonic governance model would prevail and maximize shareholder value. Was he proven right or whether he misjudged his partner’s governance model forms the basis of this case. The case does not argue for or against any governance model. Instead it draws the student’s attention to the existence of different governance models and their interplay in a unified setting.

Keywords: BUMI; Indonesia; Bakries; entrenched governance; Nat Rothschild; mining (search for similar items in EconPapers)
Date: 2015
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/2277977915596261 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:sajbmc:v:4:y:2015:i:2:p:240-250

DOI: 10.1177/2277977915596261

Access Statistics for this article

More articles in South Asian Journal of Business and Management Cases
Bibliographic data for series maintained by SAGE Publications ().