Self Assessment GCG in Indonesian Commercial Banks

Bank Indonesia has issued out a regulation PBI No 8/4/PBI/2006, PBI NO. 8/14/PBI/2006 – SE No. 9/12/DPNP that starts all commercial banks must conduct a self assessment on the implementation of good corporate governance. The factors to be assessed are in regards to the (1)board of commissaries, (2)board of directors, (3)Committee and internal control bank(4)conflict of interest,(5)compliance, (6)internal audit and (7)external audit, (8)risk management and internal control system, (9) affiliated and large debtor,(10)Bank Strategic plan and (11)transparency on financial and non financial aspects.

A the composite value of each bank is assess through each of the indicators that has been determined by Bank Indonesia. This online survey will analyze to what extent the availability of information concerning the implementation of Good Corporate Governance from a certain bank. This study is focus on the banks that have gone public which means that it has been listed in the Indonesian Stock Exchange. Data from the Indonesian stock exchange states that there are 28 commercial bank that are listed. From the 28 bank online one bank does not have an official website on the internet hence make it difficult to access data about GCG, the bank is BANK NUSANTARA PARAHYANGAN TBK. It would mean that only 27 bank would be able to participate in this study.

The underlying question for this brief study is to what is the composite of value of banks implementing GCG that are listed in the Indonesia Stock Exchange? This study starts from 2007, 2008 and 2009. Since the for 2009 annual reports have not been issued out yet to the public then we would have to wait until the end of may for the results.

The composite Value for 2007
Sangat Baik - 7
Baik - 8
Cukup Baik - 1
Kurang Baik - 0
Tidak Baik - 0
Not Available - 12
(Pie Graph Under-construction)

The Composite Value for 2008
Sangat Baik - 9
Baik - 11
Cukup Baik - 1
Kurang Baik - 1
Tidak Baik - 0
Not Available - 7
(Pie Graph Under-construction)

From the table above we can see that the concentration of commercial bank that are listed in the Indonesian Stock Exhange and have data available about GCG online show a positive implementation which is 7 very good in 2007 and increase to 9 in 2008. For the good category from 8 in 2007 becomes 11 in 2008. Therefore we can see that there is a positive progress in the implementation of the GCG in commercial bank listed in the Indonesian Stock Exchange.

Recommendation from this brief study

1. BANK NUSANTARA PARAHYANGAN TBK is advised to have an official website on the profile and activities of the bank. An important data online is about the investors relation which is the annual reports and also the GCG report of the bank.
   
2. For 12 banks that did not uploaded the results of the GCG report of 2007 and 7 bank in 2008 is advised to upload the data to the official website. Some have integrated information about GCG to the Annual report, while some just upload information about GCG but the important thing is to mention the Composite value.
3. Need further study need to explain why is there a generally positive results in commercial banks that have gone public and listed in the Indonesia Stock Exchange.
   
4. Need further study to analyze the level of implementation of GCG between State owned enterprise (BUMN) working the banking sector with other commercial banks listed in the Indonesian Stock Exchange (Bank Mandiri, BNI, BRI dan BTN).