Corporate Governance Code and Development in Indonesia - An Update

Abstract

Corporate governance is a relatively recent field of economic research. Interest in this field has been spurred by the high number of corporate scandals at the turn of the 21st century (Enron, Tyco, Adelphia, WorldCom, etc.). They opened the eyes of the public all over the world to the abuses that companies can do when they are not under strict surveillance. In Indonesia, the Government has become more aware that for GCG to be suc¬cessfully implemented, it needs to have the public support and the existence of good public governance. Encouraged by that, the Government has established the National Committee for Governance (NCG) and issued The Code of Good Corporate Governance of Indonesia, hereinafter called the GCG Code, as a living instrument offering standards as well as guidance for companies to implement GCG. At the same time, as part of ASEAN country, Indonesia also have to comply with regulation when doing business across countries in ASEAN. ASEAN Finance ministries plan to promote integrated capital market by issuing ASEAN CG scorecard. These two documents are use OECD principles as benchmark for developing the scorecard. As these document using the same benchmark, these two documents should have same principles. This article attempts to provide a comparison of Indonesia ‘ Code of Corporate Governance and Asean Corporate Governance Score card.