Devotio: Journal of Business and Economic Studies

Governance Scorecard and the Indonesian Corporate Governance Roadmap 2015

Octavianus Digdo Hartomo — 2018-12-25

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.

Corporatism: Realities in the Philippines

Hung-Hwei Liu — 2018-12-25

The concept of corporatism is seen as a viable mechanism toward economic growth in the Philippines, with its democratic form of government. Currently, the economy of the country is rising as a number of business process outsourcing companies are investing in most of its capital cities. However, there is still a question as to the sustainability of the economic growth of the country. The study uses corporatism as the framework to see how it fits in the Philippine context as it entails tripartism among the three major actors—the labor group, the industry, and the government—in carrying their best to uplift the economic status of the country.

The findings of the study showed that the relationship between the three is far from the ideals of corporatism. The labor group is the underprivileged interest group as manifested in most cases of labor dispute wherein they received unfavorable decisions over the industry. Meanwhile, the industry enjoys most of the advantages in terms of labor disputes, labor-policy formulation, and other perks from the government. This is one of the realities of the country for the reason that the owners and officers of these giant industries are cronies, relatives of the government officials and politicians. On the other hand, the government seems to lack the ultimate power and control. It appears that most of the economic policies that are being formulated are under the influence of the giant industries. There is indeed a big challenge for the three major economic players in the Philippines if the interest of the economic growth of the country is considered.

Green Accounting: Integrating Environmental Impact on Financial-Reporting Framework

Fe R. Ochotorena — 2018-12-25

This study attempted to examine the environmental compliance of selected Philippine mining, oil, and power-generation sectors as viewed by auditing practitioners and to discover what these companies have been doing about this matter for the purpose of corporate financial reporting. These sectors were chosen because of their undoubted environmental impacts.

To achieve the objectives of this paper, purposive sampling and a qualitative research method were utilized through documentary analysis and conducting interviews among directors and associates of the big four auditing firms that are considered conversant about the topic and that generally contemplate on the significance of environmental issues.

Due to the nonexistence of specific accounting standards and since green/environmental reporting is technically voluntary, companies can theoretically adopt any approach to environmental reporting that they like. However, it was revealed that in practice, a number of voluntary-reporting frameworks have been implemented.

The Effects of Ethical Orientation and Moral Intensity on the Ethical Decision of an Auditor

Ida Rosnidah — 2018-12-25

This research examined the effects of the ethical orientation and moral intensity of an auditor’s ethical decision working in an inspectorate office in West Java, Indonesia. The research respondents are thirty-three (33) government auditors of the same office. The experimental method was used. Audit cases that analyzed an auditor’s ethical behavior when dealing with deviating conditions were utilized. Descriptive analysis was used in analyzing the behavior of an auditor in an audit scenario particularly multiple regression analysis, previously performed on the data quality and classical-assumption tests. The results of the study indicated that idealism has no influence on the ethical decisions of the auditor; however, relativism and moral intensity have positive influences on the auditor’s ethical decision. The research is a contribution to the professional board that supervises government auditors in implementing the code of conduct of the accounting profession.

A Review of the Supply Chain Management of Fresh Mangoes: Implications to the Supply Chain Management Of New Products from Mango By-Products

Grace Marie V. Lape — 2018-12-25

This study identified and described the supply chain management of new products from mango by-products in Cebu, Philippines. New products derived from mango by-products are mango kernel flour, mango butter, mango kernel tea, feed mix, mango pectin, mango polyphenols, and mango seed husk briquettes, to name a few. Expectedly, mango waste processors like GEMS are wholly dependent on the mango wastes such as peels, seeds, and husks produced by the mango processor. A review of the supply chain management of fresh mangoes with emphasis on its implications for the supply chain management of new products from mango by-products may provide directions for a more sustainable operation for mango waste processors.

The study interviewed leaders of associations of mango growers and processors, key officers of Profoods International Inc, one of the largest mango processing firms in the Philippines and Green Enviro Management Systems Inc. (GEMS), a mango waste processing company based in Cebu and the only mango waste processor in the country. It also used secondary data from the Philippine Council for Agriculture, Forestry, and Natural Resources Research and Development.

Findings of the study highlight the problems and limitations of the key players in the fresh mango supply chain in relation to the mango waste supply chain. The challenges faced by mango growers are additional capital requirements, weather risks, pesticide dependence and effects, marketing-related concerns, lack of government support, uneven profit sharing and pilferage.

Mango food processors, on the other hand, face the challenge of providing the promised products to foreign buyers on a regular basis. Moreover, should there be a low supply of fresh mangoes, the processing plant may not be able to meet its full production capacity and may incur certain losses in excess labor.

The study recommends exploring the possibility of developing the capability of the Philippine Mango Industry Foundation, Inc.(PMIFI) as the supply chain manager considering it has worked hand-in-hand with the various key players in the fresh mango supply chain who are also members of the foundation. The study further suggests that the mango growers be considered as phase one of the CSR projects for GEMS and document the practices, processes, and performance metrics of the mango growers.

Ensuring Food Security and Reducing Poverty through Gender Development: The Case of Indonesia

Angelina Ika Rahutami — 2018-12-25

Poverty, food security, and gender inequality have a strong causality relationship and have been a focus of socioeconomic development in the world. The World Food Program stated that gender inequality is a major cause and effect of hunger and poverty, but the fact also shows that women play a pivotal role in food security. Those are in food production, distribution, the keeping of indigenous knowledge of biodiversity, and utilization. This concern could be seen in the 3 goals of sustainable development goals (SDGs) that represent a continuity of the millennium development goals (MDGs). The Indonesian data show that approximately 60% of Indonesian poverty is rural poverty. Most of the poor in rural areas are farmers, who have a big problem with the low farmers’ exchange rate.

This study aimed to describe the conditions of poverty and food security in Indonesia and conduct policy analysis in terms of gender and development. This study used secondary and primary data. The results of the study showed that the low farmers’ exchange rate causes difficulty for farmers to escape from the poverty trap. In addition, because women hold various roles in food security but also have various limitations in accessing food, women tend to have a bigger burden than men. The case study in Central Sumba showed that women empowerment in dealing with food security and poverty should be accompanied by the cultural approach. A cultural approach is important because this research found that the indigenous culture affected the household’s decision-making. If there is no adjustment and simplification of tradition, there will be a poverty trap. On the other hand, indigenous knowledge also needs to be preserved, especially in the agriculture sector. The Indonesian government also needs to develop more specific policies that directly address women’s empowerment and gender equality to cope with the poor conditions and ensure food security in their household.