Good Governance

Good Governance

Good governance
• Having a good understanding of regulation, this is actually very closely related to the
implementation of good ethics of the company

• The concept of good governance is closely related to the concept of development, where the
sustainability of the process of improving the standard of living of the surrounding community
through the empowerment of natural resources is in accordance with the synergy between the
government, the private sector and civil society.

Some things that can support the occurrence of good governance:

• Transparency, transparent management of assets by the government.
• Accountability, can be calculated.
• Participation, involvement of all levels of society
• Legal empowerment, control of activities.
Good Governance

1. Transparency
The Company and all Subsidiaries must always disclose (disclose) and provide adequate information that is
easily accessible to all stakeholders.
2. Accountability
The Company and all Subsidiaries manage the Company correctly and measurably in accordance with the
interests of the Company, taking into account all stakeholders.
3. Responsibility
The Company and all Subsidiaries always comply with laws and regulations and carry out responsibilities to the
community and the environment on an ongoing basis.
4. Independence
The Company and all Subsidiaries undertake to manage the Company and all Subsidiary entities and their
employees so as not to dominate each other and cannot be intervened by any party.
5. Fairness
The Company and all Subsidiaries always pay attention to the interests of capital owners and other stakeholders
by implementing the principle of fairness and equality in carrying out the Company's activities.
Good Governance

In implementing good governance there are three important and interrelated

focuses, namely:
1. The economy
includes decision making processes that affect economic activities by taking
into account aspects of justice, poverty and life justice.
2. Politics
consider the entire decision making process in the form of policy formulation
Administrative
relating to the implementation of policies at the national and regional level.
 Good Governance
The concept of governance has basically gone hand in hand with human life as social creatures and also as
natural beings.

The need for an arrangement in regulating the relationship between humans with each other also between
humans and nature is important. This is needed to create a balance in life.

Nature
Human Human
 Good Governance
Good governance is broader in understanding than just rules relating to administration in
conventional terms.
Good governance is very closely related to the basics carried out in ethics. Its application is
very easy to apply to various communities as below.

Private Sector

Good
Governance

Government NGO
 Good Governance
There are 8 characteristics in good governance that affect each other, where in the
interrelation between these 8 characteristics can provide flexibility for minorities and also
suppress the superiority of the authorities.
Participation

Responsibility Rule of law

Effective
and Transparency
efficient

Fair and
general
Responsive

Consensus
oriented
Good Governance

1. Participation
Government

Development

Private Society
Good Governance

In participating in development, the government has an important role to play in regulating.

Where natural resources and infrastructure managed by the government together with the
private sector must involve the community.

Participation in government can be realized through:

Participation in the benefits of the project and groups affected and influences the running of
a project.
Improve relations between the public and the private sector, especially social economic
relations that are beneficial to all parties. Where the government acts as a facilitator.
Empowering local government with ownership of regional projects known as regional
autonomy.
Using a non-governmental organization as a vehicle for profit through a project where it
acts as a supervisor of the project.
Good Governance

2. Law
Acting as a regulator that has the power to force the people involved in carrying out
an ongoing process.
Legalization and regulation carried out by the government is an important factor for
the process of the continuation of state life.

3. Transparency
Decisions are taken and made through rules that are followed correctly and are very
open to things that are supposed to be open. The information is very free and can be
accessed directly for the whole community members.
Transparency refers to the availability of information for the general community and
an explanation of government rules, regulations and decisions.
Good Governance

4. Responsive
In the principle of good governance here, being responsive means
providing various forms of service to each community that is
incorporated in the stakeholder elements in providing a quick response
to the various problems encountered.
Benchmarks in terms of service can be seen through a bureaucratic
process that is not complicated. The level of good regulatory measures
can be seen through the speed of the institution's response in solving
problems without having to go through a long process.
Maintaining responsiveness can be maintained through a system of
supervision and social inspection.
Good Governance

5. Consensus oriented
A good arrangement, basically combines the interests of several social groups
in a system that is fair and impartial, even if there is partiality on the ethics of
social relations between communities or socially interconnected parties.
Regarding the condition of the Indonesian community, this consensus
orientation is very important, in the sense that the regulation must be able to
reach all the interests and characteristics of the community that are different
from each other.
The differences between social groups and communities that cause conflict is
a joint effort to form something that can accommodate the aspirations and
togetherness in understanding the same rules.
Good Governance

6. Fair and general nature

Fair and general categories must be based on shared ethics, this is
because of the diversity that exists in communities in Indonesia. Where
in this case the interests of one particular community cannot be imposed
on another community, the concept of one justice for all communities
must be applied fairly.
The concept of good governance must be based on an equitable view of
justice for each community. This is useful to avoid conflicts in the
future.
The emergence of good governance must be based on a general concept,
where regulation is not based on a particular community.
Good Governance

7. Effective and efficient

The concept of effectiveness in good governance means a process and
institution that produces a meeting between the needs in the community by
producing a useful output and also output that is not useful.
Effectiveness in this case how the process of good regulation is able to
suppress the useless output to a minimum.
This is usually seen in natural resource management.
The concept of efficiency in the context of good governance means that it
includes sustainable use of natural resources while protecting the
environment. Where the utilization of natural resources must have a positive
impact on the surrounding communities.
 Good Governance

8. Liability
Accountability is the key to good governance. Not only government institutions but also the
private sector and civil society organizations must be accountable to the community and also
to their institutions as stakeholders.
Government

LAW
Private Society
Good Governance

EXAMPLE OF VIOLATION OF GOOD CORPORATE GOVERNANCE (GCG) PRINCIPLES

1. Violation of business ethics against the law

A company X because of a bankrupt company condition finally decided to lay off its employees. But in carrying
out the layoffs, the company did not provide severance as stipulated in Law No. 13/2003 on Employment. In this
case company X can be said to violate the principle of compliance with the law.

2. Violation of business ethics against transparency

A Foundation X organizes high school level education. In the new school year the school will charge a fee of
Rp. 500,000 for each new student. These school levies were not informed at all when they were about to
register, so after being accepted they inevitably had to pay. Besides that, there is no official information or
explanation regarding the use of the money to the parents.
After being urged by many parties, the new Foundation gave information that the money was used to purchase
teacher uniforms. In this case, the Foundation and the school can be categorized as violating the principle of
transparency
Good Governance

EXAMPLE OF VIOLATION OF GOOD CORPORATE GOVERNANCE (GCG) PRINCIPLES

3. Business ethics violations of accountability
A private hospital through the management announced to all employees who will register civil servants automatically declared
resign. A as one of the employees in the Private Hospital ignored the announcement from the management because in his
opinion he was appointed by the Manager in this case the director, so that all of his rights and obligations related to the
manager not the management. The Management itself did not provide an official circular regarding the policy.
Because of his attitude, A finally resigned. From this case the Private Hospital can be said to violate the principle of
accountability because there is no clarity of the function, implementation and accountability between the Hospital Manager
and Management
4. Violation of business ethics against the principle of accountability
A PJTKI company in Jogja recruits baby sitters. The announcement and agreement stated that the company promised to send
prospective migrant workers after 2 months of training promised to be sent to the destination countries. The company even
promised that all costs incurred by applicants would be returned if they did not go to the destination country. B, who was
attracted by the offer, immediately registered and paid a fee of Rp. 7 million for administrative and visa fees and passports.
But after 2 months of training, B never departed, even up to one year there was no clarity. When confirmed, the PJTKI
company always argued that there were delays, and so on. From this case it can be concluded that the PJTKI company has
violated the principle of accountability by ignoring the rights of B as a prospective migrant worker who should have been
dispatched to the destination country to work.
Good Governance

5. Violation of business ethics against the principle of fairness

A well-known property company in Yogjakarta did not give permission to build a
house (IMB) from the developer to two of its customers in the company's residential
plot of land. The first consumer has fulfilled his obligation to pay the price of land
according to the agreement and other administrative costs.
While the second consumer still has an obligation to pay excess land, because every
time he will pay the developer always refuses on the grounds there is no permission
from the company's center (its center in Jakarta). The strange thing is that in the plot
of land only two of these people have yet to obtain a permit to construct a house,
while 30 other consumers have been given permission and all of their houses have
been built. The reason given by the company was that they wanted to give lessons to
the two consumers because these two people had provoked other consumers to
immediately prosecute the granting of housing construction permits. In this case the
property company has violated the principle of fairness (fairness) because it does
not fulfill the rights of stakeholders (consumers) for reasons that do not make sense.
Good Governance

EXAMPLE OF VIOLATION OF GOOD CORPORATE GOVERNANCE (GCG) PRINCIPLES

6. Violation of business ethics against the principle of honesty
A development company in Sleman entered into an agreement with a contracting company to build a housing
estate. In accordance with the agreement the developer gave the building specifications to the contractor. But
in its implementation, the contracting company decreased the quality of building specifications without the
knowledge of the developer company. After a few months the condition of the building has suffered serious
damage. In this case the contracting company could be said to have violated the principle of honesty because it
did not meet the building specifications that had been agreed with the developer company

7. Violation of business ethics against the principle of empathy

A customer, you name it X, from a finance company is late paying the car installments according to the due
date because his child is seriously ill. X has told the company about the delay in paying installments, but did not
get a response from the company. A few weeks after the due date the company immediately went to X to
collect the installments and threatened to take the car that was still paid in installments. The company invoices
in an impolite way and exerts psychological pressure on the customer. In this case we can categorize the
company as having violated the principle of empathy for the customer because in fact the company can warn
the customer in a wise and appropriate manner.