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

Mohamad Fajri Mekka Putra (), Sihabudin, Budi Santoso and Reka Dewantara
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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

A chapter in Proceedings of the 1st Brawijaya International Conference on Business and Law (BICoBL 2022), 2023, pp 123-135 from Springer

Abstract: 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.

Keywords: State-Owned Enterprises; Concurrent Positions; the Board of Commissioners; Good Corporate Governance (search for similar items in EconPapers)
Date: 2023
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DOI: 10.2991/978-94-6463-214-9_14

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