Corporate Governance, Nawacita, and Financial Performance of Soes in Indonesia

Abstract: This study examines the effect of Corporate Governance (CG) assessment with CG index, Nawacita, and elements of CG index (Board of Commissioners, Audit Committee, Ownership, and Risk Management and Nomination & Remuneration Committee/RMNR Committee) on the financial performance (ROE) of SOEs using panel data analysis. The samples used SOEs that is included in the sector of government program called “Nawacita” consisting of hunting and fishery sector, food sector, mining sector, manufacture industrial sector, and construction/tourism sector for the period 2012-2017. The results show that CG assessment, Board of Commissioners, Audit Committee, and RMNR Committee have significant effect, and the ownership has no effect on the financial performance of SOEs. The result indicates that the higher score of CG assessment will have impact on financial performance of SOEs in Indonesia. Nawacita program indicates that financial peiformance of SOEs has not been optimal yet for the citizen welfare in the short term.

Full-text Available: PDF

Authors: Alwiyah Alwiyah Universitas Wiraraja , Rini Fatmawat, Djoko Suhardjanto, Sigit Santosa, Universitas Sebelas Maret