Governance Scorecard and the Indonesian Corporate Governance Roadmap 2015

Octavianus Digdo Hartomo; Theresia Dwi Hastuti; Agnes Advensia Christmastuti; Stephana Dyah Ayu; Stefani Vena Purnamasari; Alexandra Adriani Wijaya

Octavianus Digdo Hartomo Soegijapranata Catholic University
Theresia Dwi Hastuti Soegijapranata Catholic University
Agnes Advensia Christmastuti Soegijapranata Catholic University
Stephana Dyah Ayu Soegijapranata Catholic University
Stefani Vena Purnamasari Soegijapranata Catholic University
Alexandra Adriani Wijaya Soegijapranata Catholic University

Keywords: Indonesian Corporate Governance Roadmap, Corporate Governance Scorecard, blue-chip company

Abstract

In 2009, finance ministers agreed on an implementation plan to promote the development of an integrated capital market. The Corporate Governance (CG) Scorecard assessment is based on documentation accessible to the public and aims to develop good governance among public companies in the region and that can be promoted to foreign investors. Based on assessment results in 2012, 2013, and 2014, there has been a significant improvement in the governance of issuers in Indonesia, however, compared to other countries, Indonesia’s CG score and rank were relatively low. In 2015, the Indonesian Financial Services Authority released the Indonesian Corporate Governance Roadmap. The roadmap was expected to be a reference for the improvement of the governance of issuers and public companies in Indonesia to strengthen the corporate-governance implementation.

The objective of this research is to conduct exploratory research about the CG Scorecard in Indonesia after the implementation of the Indonesian Corporate Governance Roadmap in 2015 by using 30 Indonesian blue-chip companies. The 30 blue-chip companies were chosen as they were assumed to be the benchmark of the implementation of good corporate governance in Indonesian publicly listed companies (PLCs).

Findings showed continued improvement in the corporate governance practices of Indonesia PLCs. The average score in 2016 is 73.59 points from 100 scale point, with a maximum score of 94.60 points and a minimum score of 40.14 points. This score is higher than the average Indonesian Corporate Governance Scorecard in the previous years. This result indicates that blue-chip companies have implemented Good Corporate Governance as suggested by the Indonesian Corporate Governance Roadmap 2015.

This research will give empirical evidence about corporate-governance practices in Indonesian blue-chip companies by using content analysis and weighted mean scores using the CG scorecard. Improved corporate-governance implementation in Indonesia, as mentioned by the Indonesian Corporate Governance Roadmap, requires a commitment not only from the regulators but also from the issuers and public companies.

Author Biographies

Octavianus Digdo Hartomo, Soegijapranata Catholic University

Octavianus Digdo Hartomo is a lecturer and researcher at Soegijapranata Catholic University in Semarang, Central Java, Indonesia since 1995. He teaches Ethics and Forensic Accounting in the said University. His major interest is in Business Ethics and Value Based Education. He earned his Ph.D. in Economics from Padijadijaran University in Bandung, Indonesia. One of his recent publications includes "Value Creation Model in Indonesia" published in South East Asia Journal of Contemporary Business and Law and “The Implementation of Peace Building, Education Based on Local Wisdom in Indonesia Post Conflict Areas” published in the International Journal of Humanities and Management Science. He has various researches in Ethics, Value Based Education, and Corporate Governance

Theresia Dwi Hastuti, Soegijapranata Catholic University

Theresia Dwi Hastuti is a full-time lecturer at the Accounting Department of Soegijapranata Catholic University in Semarang, Central Java, Indonesia. Her interests are in Auditing and Advance Financial Accounting. She completed her Ph.D. Program in Accounting at Diponegoro University Semarang in 2017. She has conducted researches and had publications in good corporate governance and corporate social responsibility.

Agnes Advensia Christmastuti, Soegijapranata Catholic University

Agnes Advensia Christmastuti is a full-time lecturer and researcher at the Accounting Department of Soegijapranata Catholic University in Semarang, Central Java, Indonesia. Her interest is in Accounting Information System and Database Management System. She completed her Ph.D. program in Accounting at Diponegoro University, Indonesia. She has conducted many research and published articles on Accounting Information System.

Stephana Dyah Ayu, Soegijapranata Catholic University

Stephana Dyah Ayu is a full-time researcher and lecturer at the Accounting Department of Soegijapranata Catholic University in Semarang, Central Java, Indonesia. She teaches Managerial And Cost Accounting.

Stefani Vena Purnamasari, Soegijapranata Catholic University

Stefani Vena Purnamasari is a full-time lecturer at the Accounting Department of Soegijapranata Catholic University in Semarang, Central Java, Indonesia. She holds a master’s degree in Accounting from Gadjah Mada University, Yogyakarta, Indonesia. She has had researches and published articles on good governance and management accounting.

Alexandra Adriani Wijaya, Soegijapranata Catholic University

Alexandra Adriani Wijaya is a lecturer at the Accounting Department of Soegijapranata Catholic University in Semarang, Central Java, Indonesia. She earned her degree in Master of Management from the same University. She teaches Accounting Information System and Financial Accounting. She has had researches and published articles on good governance and management accounting.