Since the crisis come in 1997, it is a vivid fact that while neighboring countries in Asian Region could get out of the crisis by providing significant improvement on their economic performance, Indonesia can hardly do the same. Indonesian's recovery has taken place at a slower rate. This partly caused by political instability, even after reform takes place, combined with a devastated and disfunctional banking sector, a deeply indebted corporate sector and pervasive corruption. The complicated problems above still added by the lack of national framework for the implementation of good corporate governance. This condition has something to do with the fundamental strength of company.

Corporate Governance refers to the process and procedures used to manage the business and affairs of a company, with the objective of enhancing stakeholders' values, which includes ensuring the financial viability of the business.

Corporate Governance is a prerequisite to Indonesia's sustainable economic recovery. A reform in the area of corporate governance in Indonesia is soon needed, because the implementation of corporate governance policy will create internal incentive, which is effective to encourage the management of companies to utilize resources efficiently. Even more, the universality of corporate governance's principles makes it an important requirement to global investment and trade. Thus, the implementation of these principles can be the real basis of the sustainable and stable growth of Indonesia's economy.

In the narrowest sense, Corporate Governance can be viewed as a set of arrangements internal to corporation that define the relationship between managers and shareholders. The shareholders may be public or private. These arrangements may be embedded in company law, security law and listing requirements. However, corporate governance is a matter of general business ethics and can not be imposed by regulations alone.

For company that has become or plan to become public company, the implementation of corporate governance principles is also necessary to face a tighter competition in the globalization era. JSX as the regulator of capital market has made re-orientation to its role by empowering all market participants to have self-control mechanism. It means that regulator does not need to issue a lot of rules, instead rely on market participant disclosure (as stated in Good Corporate Governance, Modul Pelatihan Bagi Pemodal dan Perusahaan Publik, Bursa Efek Jakarta 2000).

The four components /principles of Corporate Governance are Tranparency, Accountability, Responsibility, and Fairness. The four "pillars' are universally applicable regardless of the economic orientation, strategic priorities, or policy choices of the government in question.

Over all, the objectives of this GFP are:

1. To produce Good Corporate Governance Manual for Gobel International Group as a guideline for company's business practices

2. To conduct a gap analysis between embedded business practices and the good corporate governance codes

3. To recommend a change strategy for Gobel International Group to be implemented by the end of the year 2001

Reseach Location: PT. Gobel International

Supervisor: Achmad Dermawan Habir, PhD

Accepted :August 2001



For IPMI Internal -- Read at IPMI Library only.