Implementation Of Corporate Government In Indonesia: A Comparative Analysis The Islamic Perspective With OECD Principles

Widiyanti, marlina and Jusoh, Mansor and MD Tahir, MD Zyadi and Ghafar Ismail, Abdul (2011) Implementation Of Corporate Government In Indonesia: A Comparative Analysis The Islamic Perspective With OECD Principles. PROCEEDING OF THE VI MALAYSIAN NATIONAL ECONOMIC CONFERENCE 2011 (VOLUME 1), 1. pp. 46-60. ISSN 978-983-3198-65-8

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    Abstract

    A study in corporate governance by the Asian Development Bank supported the view that poor corporate governance was one of the major contributors to the build-up of vulnerabilities in the East Asian countries, including Indonesia, and that finally led to the financial crisis. The financial crisis has awakened investors to the fact that they need protection for their investment. There is a growing concern emerged with a great profile regarding the Islamic principles of corporate governance. A major ethical component of any economic activity in Islam is to provide justice, honest and fairness and to ensure all parties their rights and dues. Islamic economy has progressed a great deal during these last two decades with impetus as an important concern in developing an Islamic corporate system. This paper is an attempt to discuss the nature, applications and comparison of Islamic principles of corporate governance (IPCG) with conventional principles of corporate governance considering special reference to Organization of Economic Cooperation and Development (OECD) and Indonesia. After the discussion, it can be concluded that the dimension of Islamic perspectives of corporate governance has broader horizon and cannot compartmentalize the roles and responsibilities in which all actions and obligations fall under the jurisdiction of the divine law of Islam whereas, the OECD principles implements a firm with six different issue and obligations. . Implementation of corporate governance in Indonesia should consider the role of “Syariah Islam” for business and Accountability not only to stakeholders but also to God, the ultimate owner. Adoption of the principles of corporate governance in Indonesia should take into account the existence of domestic legal culture otherwise it will fail in its implementation.

    Item Type: Article
    Uncontrolled Keywords: corporate governance, islamic principles, conventional principles, accountability, Disclosure and transparency, OECD, applications and comparison.
    Subjects: H Social Sciences > HB Economic Theory
    H Social Sciences > HJ Public Finance
    Divisions: Faculty of Economics > Department of Management
    Depositing User: Dr Marlina Widiyanti
    Date Deposited: 24 Oct 2013 14:49
    Last Modified: 24 Oct 2013 14:49
    URI: http://eprints.unsri.ac.id/id/eprint/2881

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