Corporate Governance (Tata Kelola Perusahaan)
Materi 2
UNIVERSITAS ISLAM DR KHEZ MUTTAQIEN FAKULTAS EKONOMI DAN BISNIS
PROGRAM STUDI MANAJEMEN
Learning Objectives
• Describe the role and responsibilities of the board of directors in corporate governance
• Explain how the composition of a board can affect its operation
• Discuss trends in corporate governance
• Explain how executive leadership is an important part of strategic management
Pengertian Corporate Governance
• The relationship among the board of directors, top management, and shareholders, determining the direction and performance of the corporation
• Tata Kelola Perusahaan atau Corporate Governance (CG) merupakan suatu sistem yang dirancang untuk mengarahkan pengelolaan perusahaan secara profesional berdasarkan prinsip- prinsip transparansi, akuntabilitas, tanggung jawab, independen, kewajaran dan kesetaraan untuk mencapai kinerja perusahaan.
• Penerapan komitmen CG yang baik disebut Good Corporate Governance (GCG)
Role of board directors
• Describe the role and responsibilities of the board of directors in corporate governance
• The board of directors has an obligation to approve all decisions that might affect the long-term performance of the corporation. This means that the corporation is fundamentally governed by the board of directors overseeing (mengawasi) top management, with the concurrence (persetujuan) of the shareholder.
• The term corporate governance refers to the relationship among these three groups (board of directors, top management & shareholder/investor/pemegang saham) in determining the direction and performance of the corporation
Role (Peran) of the Board in Strategic Management
1. Monitor: By acting through its committees, a board can keep abreast (perkembangan) of developments inside and outside the corporation, bringing to management’s attention developments. A board should, at the minimum, carry out this task.
2. Evaluate and influence: A board can examine management’s proposals, decisions, and actions; agree or disagree with them; give advice and offer suggestions; and outline alternatives. More active boards perform this task in addition to monitoring.
3. Initiate and determine: A board can delineate (menggambarkan/membuat) a corporation’s mission and specify (menentukan) strategic options to its management.
Board of director responsibilities
1. Effective board leadership including the processes, makeup, and output of the board 2. Strategy of the organization
3. Risk vs initiative and the overall risk profile of the organization
4. Succession planning for the board and top management team
5. Sustainability
• Four most important issues boards (National Association of Corporate Directors) should address are :
corporate performance
CEO succession
strategic planning
corporate governance.
• Directors must also ensure management’s adherence (mematuhi) to laws and regulations, such as those dealing with the issuance of securities, insider trading and other conflict
Board of Directors’ Continuum
Board of Directors Composition
• Explain how the composition of a board can affect its operation
• Inside directors (sometimes called management directors) are typically officers or executives employed by the corporation.
• Outside directors (sometimes called non- management directors) may be executives of other firms but are not employees of the board’s corporation
Agency Theory
• People who favor (menyukai/memilih) a high proportion of outsiders state that outside directors are less biased and more likely to evaluate management’s performance objectively than are inside directors.
• This view is in agreement with agency theory which state that problems arise in corporations because the agents (top management) are not willing to bear responsibility for their decisions unless they own a substantial amount of stock in the corporation. The theory suggests that a majority of a board needs to be from outside the firm so that top management is prevented from acting selfishly (egois) to the detriment (merugikan) of the shareholders.
• Proponents (pendukung) of agency theory argue (berpendapat) that managers in management-controlled firms select less risky strategies with quick payoffs in order to keep their jobs
• Agency theory is concerned with analyzing and resolving two problems that occur in relationships between principals (owners/shareholders) and their agents (top management):
1. Conflict of interest arises when the desires or objectives of the owners and the agents conflict. For example, attitudes toward risk may be quite different. Agents may shy away from riskier strategies in order to protect their jobs
2. Moral hazard refers to the situation where it is difficult or expensive for the owners to verify what the agents are actually doing.
Stewardship theory
• Mereka yang lebih menyukai direktur internal daripada direktur eksternal berpendapat bahwa direktur eksternal kurang efektif dibandingkan dengan direktur internal karena direktur eksternal cenderung tidak memiliki minat, ketersediaan, atau kompetensi yang diperlukan.
• Karena masa jabatan yang panjang di perusahaan, para insiders/senior eksekutif lebih termotivasi untuk bertindak demi kepentingan terbaik perusahaan daripada kepentingan pribadi mereka. Teori yang menyatakan bahwa seiring berjalannya waktu, para eksekutif senior cenderung memandang perusahaan sebagai perpanjangan dari diri mereka sendiri.
• Stewardship theory argues that senior executives over time tend to view the corporation as an extension of themselves. Rather than use the firm for their own ends, these executives are most interested in guaranteeing the continued life and success of the corporation.
• Stewardship theory argues that in many instances top management may care more about a company’s long-term success than do more short-term– oriented shareholders
When Outsiders can be considered Insiders
• Affiliated directors, who, though not really employed by the corporation, handle the legal or insurance work for the company or are important suppliers. These outsiders face a conflict of interest and are not likely to be objective
• Retired executive directors (Direktur eksekutif yang sudah pensiun, yang dulu bekerja di perusahaan tersebut), who used to work for the company, such as the past CEO
• Family directors, who are descendants of the founder (keturunan pendiri) and own significant blocks of stock
Should Employees (karyawan) Serve on Boards (menjabat menjadi direktur)?
• Codetermination, the inclusion of a corporation’s workers on its board (Pelibatan pekerja perusahaan dalam jajaran direksi)
• Union agreements or Employee Stock Ownership Plans (ESOPs)
Board of Directors
• CEOs often nominate chief executives (as well as board members) from other firms to membership on their own boards in order to create an interlocking directorate (direktorat yang saling terkait) :
1. direct interlocking directorate occurs when two firms share a director (dua perusahaan berbagi seorang direktur) or when an executive of one firm sits on the board of a second firm
2. indirect interlock occurs when two corporations have directors who also serve on the board of a third firm, such as a bank
Nomination and Election of Board Members
• Banyak perusahaan yang direkturnya menjabat lebih dari satu tahun, membagi dewan direksi ke dalam beberapa kelas dan melakukan pemilihan secara bertahap sehingga hanya sebagian dari anggota dewan yang mencalonkan diri setiap tahun. Ini disebut dewan bertahap (staggered board)
Transformational leaders
• Transformational leaders : leaders who provide change and movement in an organization by providing a vision for that change. The positive attitude characterizing many well- known current and former leaders
• These transformational leaders have been able to command respect and execute effective strategy formulation and implementation because they have exhibited three key characteristics :
The CEO articulates a strategic vision for the corporation
The CEO presents a role for others to identify with and to follow
The CEO communicates high-performance standards and also shows confidence in the followers’ abilities to meet these standards
Executive leadership & Strategic vision
• Executive leadership is the directing of activities toward the accomplishment of corporate objectives. Executive leadership is important because it sets the tone for the entire corporation
• Strategic vision is a description of what the company is capable of becoming. It is often communicated in the company’s vision statement
Strategic Management Process
• Strategic Planning Staff
Supports top management & business units in the strategic planning process
Identify & analyze company-wide strategic issues
Generate strategic alternatives
Facilitate business units in coordinating activities related to strategic planning process
