Good Corporate Governance (GCG)

Share on :

Good Corporate Governance (GCG)

Corporate governance is a concept that can be used to improve economic efficiency, which includes a set of relationships between the company's management, board of directors, shareholders and other corporate stakeholders.  

Corporate governance also provides a structure that facilitates the determination of the goals of a company, and as a means to determine the performance monitoring techniques. Watts (2003), stated that one of the ways used to monitor and restrict the issue of contract management is the opportunistic behavior of corporate governance. Related with agency problems, corporate governance is a concept based on agency theory that expected to serve as means to give confidence to investors that they will receive a return of the funds that they have invested. In other words, corporate governance directed to reducing asymmetry information between principal and agent, which in turn could reduce earnings management measures (Ujiyanto and Bambang, 2007). 

Until now, there are many varying definitions of Good Corporate Governance (GCG). But generally have the same purpose and understanding. Forum for Corporate Governance in Indonesia or FCGI (2000) in the first publication is using the definition of the Cadbury Committee, that is: 

"seperangkat peraturan yang mengatur hubungan antara pemegang saham, pengurus (pengelola) perusahaan, pihak kreditur, pemerintah, karyawan serta para pemegang kepentingan intern dan ekstern lainnya yang berkaitan dengan hak-hak dan kewajiban mereka, atau dengan kata lain suatu sistem yang mengatur dan mengendalikan perusahaan."  

In addition, FCGI explained that the purpose of Corporate Governance is to create added value for all stakeholders.

Healthy | Smart | Rich, at: 4/20/2012

Related Posts

• AUDIT : Public Sector Performance During this time, the public sector often receives accusation as a hotbed of corruption, collusion, nepotism, inefficiency and waste of state the so ... readmore
• Investment (Part 1) According Kertonegoro (1995, 4) choice of investment of time can be divided into two, namely the short term or long term. Short-term investments are ... readmore
• Human Resources Human resources as being important for the company is a factor that has contributed greatly to the next performance. Human resources is defined as a ... readmore
• Accounting Understanding of the principles of bookkeeping and accounting is essential for anyone interested in accounting, even essential for anyone who want ... readmore
• Agency Conflict Companies that separating the functions of management and ownership will be vulnerable to agency conflicts. On agency theory designed a system tha ... readmore