Urgency of Local-Owned Enterprises (BUMD) Law as Good Corporate Governance Basis in Indonesia

DOI

10.2991/icoposdev-17.2018.24How to use a DOI?

Keywords

local-owned enterprises (BUMD); government regulation;Indonesian laws

Abstract

Indonesian Law Number 23 on Local Government provides an authority to the local goverment to establish a Local-Owned Enterprise which is well known as BUMD (Badan Usaha Milik Daerah). BUMD has strategic roles in the autonomy era for providing benefitfor the economic growth, conducting general benefit and raising profit. However, it is difficult to achieve the goals of BUMD since the absence of laws on BUMD. There are two impacts of the absence of the law namely the ambiguity of managing BUMD both promoting public profit and achieving the breach of good corporate governance principle. This study uses stakeholder theory of modern corporation as the grand theory, fiduciary theory of corporation as middle range theory and legislation theory as applied theory. The result shows that firstly, Indonesia needs to have a special regulation concerning BUMD. Nowadays, although there are some regulations mentioning about BUMD both in national and local levels, it does not specifically discuss BUMD. Secondly, it is a must to have a fitted management in order to achieve the Goal of Establishment of BUMD either using stakeholder or stakeholder prinsciples.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Darwin Nasution
AU  - Ningrum Natasya Sirait
PY  - 2017/10
DA  - 2017/10
TI  - Urgency of Local-Owned Enterprises (BUMD) Law as Good Corporate Governance Basis in Indonesia
BT  - Proceedings of the International Conference on Public Policy, Social Computing and Development 2017 (ICOPOSDev 2017)
PB  - Atlantis Press
SP  - 113
EP  - 118
SN  - 2352-5398
UR  - https://doi.org/10.2991/icoposdev-17.2018.24
DO  - 10.2991/icoposdev-17.2018.24
ID  - Nasution2017/10
ER  -