The Basic Principles of Corporate Governance

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The Basic Principles of Corporate Governance

Komite Nasional Kebijakan Governance or KNKG (2006) stated that each company must ensure that the basic principles of good corporate governance is applied to every aspect of business and at all levels of the company. The basic principles that are:

1. Transparency

To maintain objectivity in business, companies must provide material and relevant information in a way that is easily accessible and understood by stakeholders. The companies should take initiative to reveal not only the problems implied by the regulatory legislation, but also important for decision-making by shareholders, creditors and other stakeholders.

2. Accountability

Companies should be accountable for its performance with transparent and reasonable. Therefore, the company must be properly managed, scalable, and in accordance with the interests of the company by considering the interests of shareholders and other stakeholders. Accountability is a necessary condition to achieve sustainable performance.

3. Responsibility

Companies must obey the legislation and carry out responsibilities for people and the environment that can be maintained in the long term sustainability and to be recognized as a good corporate citizen.

4. Independency

To accelerate the implementation of the principles of good corporate governance, companies must be managed independently so that each company does not dominate the other and did not receive the intervention from the other parties.

5. Fairness

In carrying out its activities, the company should always pay attention to interests of shareholders and other stakeholders based on the principles of fairness and equality.

Healthy | Smart | Rich, at: 4/21/2012