THE EFFECTIVENESS OF GOOD CORPORATE GOVERNANCE PRINCIPLES IN PUBLIC COMPANIES IN INDONESIA

Abstract

This study examines the effectiveness of Good Corporate Governance (GCG) principles in public companies in Indonesia. GCG implementation is crucial for achieving transparent, accountable, and integrity-based corporate governance, enhancing investor confidence and enhancing company performance. GCG principles encompass transparency, accountability, responsibility, independence, and fairness, as stipulated in various regulations, such as the Limited Liability Company Law, the Capital Market Law, and regulations of the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX).

However, studies show that GCG implementation in public companies remains ineffective. Many companies implement GCG principles merely as a formality, rather than as part of their corporate culture. Key inhibiting factors include a lack of management commitment, weak oversight, and an organizational culture that does not fully support transparency and accountability.

Therefore, improving the effectiveness of GCG requires strengthened regulations, top management commitment, and ongoing independent oversight. With optimal GCG implementation, public companies in Indonesia are expected to improve performance, public trust, and competitiveness in the global market.