Corporate Governance in Indonesian State-Owned Enterprises: Is it on the Right Track?

Abstract

This paper looks at the reformation of corporate governance Indonesia in the sector of state-owned enterprises, especially from the perspective of law. The focusing is to examine the voluntary and mandatory corporate governance models by comparing the prevailing corporate governance systems, pre-existing in several countries such as the US, Australia, Germany and Indonesia. The voluntary model means listed companies that might not abide by the principles but have to provide sufficient and reasonable arguments as to why it is not complying are protected against; while the latter is a model in which a listed company has to comply with the corporate governance code for avoiding penalties.The US employs the mandatory model; Australia, Germany and Indonesia apply the voluntary one.This paper suggests that the mandatory model is suitable to be implemented. The existing of corporate spivs and new hope of the Indonesian Corruption Eradication Commission are the article's central arguments to suggest employing the mandatory model.