Governance Scorecard and the Indonesian Corporate Governance Roadmap 2015
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.