Corporate Governance in PT Lippo Karawaci Tbk

Abstract

When mismanagement and misuse run rampant in giant corporations, as in the case ofEnron in 2001, good corporate governance becomes mandatory. From the perspective ofthe agency theory, the separation of capital owners and management must lead tostrictly applied good corporate governance. The purpose is to eliminate anydisadvantages to the corporation's objective, namely providing added values to allrelevant parties. The agency theory also covers two aspects: agency issues and agencycosts. The research uses the qualitative approach and data is gathered through extensiveinterview, secondary data, and bibliography study. Key persons among the sources areselected based on specific criteria. Data validity is obtained through the triangulationtechnique, and the samples used are PT Lippo Karawaci Tbk and subsidiaries. Theresults show that governance practices are unique in each corporation, in accordancewith their characteristics. Keywords: agency theory, agency problem, agency cost, corporate governance,expropriation of minority shareholders