Corporate Governance Strategy Execution with Balanced Scorecard Approach: The Most Comprehensive Framework for 360 Degree CG Internalization in Indonesia

Abstract:     
Since the multidimensional crisis hit Indonesia in late 1997, the discourse regarding the whole issue of Corporate Governance (CG) instantly became so warm buzzword discussed. Remarkable deterioration occurred due to these events, has opened the eyes of this nation, that fundamental factors cause the crisis due to CG principles have been ignored by doer of business.

However, the irony is the empirical facts show that most business people in Indonesia do not understand exactly how to implement CG in the field systematically, comprehensively, effectively and efficiently.

Based on: (1) The study of literatures; (2) Best practices and/or benchmarking; and (3) Profound observations about the whole issues of CG for over 12 years, even as practitioners who work directly in the implementation of CG, the authors strive to formulate a comprehensive framework which most are expected to provide guidance for the full business people in Indonesia in the internalization of CG in a company. This paper clearly reveals and covers several major topics, such as: CG Strategy Formulation, that cover some steps, specifically: (1) Pre-Implementation Stage; (2) Implementation Stages; and (3) Implementation Cycle Stage. In a hope that this strategy can be executed with as well as possible, then author uses Balanced Scorecard (BSC) Approach to do cascading and aligment against Key Performance Indicators (KPI), Target and Strategic Initiatives to the whole job activity of business unit in a company.

Keywords: CG Framework, Strategy Formulation, Strategy Execution, Balanced Scorecard Approach

JEL Classification: G34

working papers series