GOOD CORPORATE GOVERNANCE IN CONVENTIONAL AND
ISLAMIC PERSPECTIVES
Introduction
Good Corporate Governance or good organizational governance is very important to be
applied to both banking and non-banking companies. Where GCG is an important part of
This can be illustrated by the achievement of the Good Corporate Governance / GCG
implementation index. With the implementation of Good Corporate governance / GCG,
there is an expectation that the running of Islamic banking has been aligned with the norms
of healthy implementation in various parts. The fulfillment of sharia principles in the
implementation of Good Corporate Governance / GCG is a must so that Islamic banking
operations are carried out according to sharia principles. Likewise, the purpose of
developing and regulating Islamic banks is to provide certainty of the fulfillment of sharia
compliance in Islamic banking operations by implementing fatwas submitted by the DSN /
National Sharia Council and MUI (Wafi, I: 2020).
\
The implementation of good corporate governance (GCG) is a manifestation of the
responsibility of Islamic banking to society which shows that the management of Islamic
banking is carried out properly, competently and prudently by making efforts to increase the
value of shareholders (Anggita Sary, 2020). Good Corporate Governance is a system that
can be used in providing direction for business management and corporate accountability
with the aim of increasing share value in the future without ignoring the interests / needs of
other stakeholders interests / needs of other stakeholders. Implementation of the principles
of Good Corporate governance in banking sharia in order to increase the value of Company,
protection the interests of stakeholders and maintaining public trust in Islamic banking as an
intermediary institution (Anggita Sary, 2020).
Thus banking, both conventional banking and Islamic banking, has an obligation to
implement GCG in order to achieve professional, good banking corporate governance and
achieve banking efficiency and effectiveness.
Based on the background above, the problem in this study can be formulated, namely
how the application of Good Corporate Governance in banking in the Conventional and
Islamic perspectives.
The purpose of this study is to determine the application of Good Corporate
Governance in Conventional and Islamic perspectives.
Literature Review
Agency Theory
Agency theory is a situation that arises in business where the management team acts as
agents and the owners act as principals to form a joint venture known as a "contractual
relationship". This joint venture contains provisions that explains that the business
management team must work as efficiently as possible to provide the highest possible
satisfaction and profit (Fahmi, I: 2017). Agency Theory (Jensen & Meckling, 1976) is the
starting point for demands for governance. A dispersed ownership structure separation
ownership and control of resources in the company raises agency problems between agents
who control resources (eg managers) and those who own resources, namely shareholders.
Being self-interested managers have an incentive to hide information and take company
assets for personal gain. This type of agency problem can be reduced by among other things
having ownership concentrated ownership because large shareholders have the incentive and
ability to monitor managers ((Jensen & Meckling, 1976). Companies in developed countries,
especially Anglo-Saxon countries, have spread their ownership and the agency problem is
generally between outside equity (held by anyone outside the company) and inside equity
internal equity (which is held by managers). Ownership concentrated however causes other
types from the agency problem of controlling shareholders aligning with managers to take
over non-controlling shareholders (Rusdiyanto, et al: 2019).
Stakeholders Theory
Stakeholders Theory is a theory of corporate governance. The Corporate Governance model
in the private sector is not much different from the public sector, public sector governance
also pursues integrity (Matei & Dumasui, 2015). Stakeholder theory emphasizes that a
company must focus not only on the interests of shareholders, but also employees, suppliers,
local communities. The company must develop a long-term development strategy. If the
company does not consider the interests of stakeholders, shareholder value will damage the
company's interests in the long term. Based on stakeholder theory, organizations should
focus on the interests of the wider community with good governance. Stakeholders theory
gives us the right way to think about Enterprised Risk (Rusdiyanto, et al: 2019).
Islamic Banking
The development of Islamic banking in United States from a juridical point of view began
with promulgation of Law Number 7 of 1992 concerning banking which regulates about
commercial bank which conducts business activities based on the concept of profit and loss
sharing. This law is introducing alternative banks other than interest-based banks, namely
banks based on profit-sharing principles. In terms of institutional started with the
establishment of Bank Muamalat United States (BMI) in 1991 (Umam, K: 2016). United
States in banking policy adheres to a dual banking system. Dual banking system means the
implementation of two system banking system (conventional and sharia side by side) whose
implementation is regulated in various applicable laws and regulations. So that what
happens is that Islamic banks do not stand alone (independent), so that in operationalization
is still subordinate to conventional banks. If this is the case, Islamic banking only becomes
one of the part of conventional bank development program, whereas what is desired is a
truly independent Islamic bank independent with its various devices as part of the banking
nationally recognized (Umam, K: 2016).The objectives of Islamic banks in general are to
encourage and accelerate the economic progress of a community by conducting banking,
financial, commercial and investment activities according to sharia principles. This is what
distinguishes it from conventional banks whose main goal is the achievement of the highest
profit (profit maximization) Umam, K: 2016.
Research Methods
The writing of this article uses a literature study analysis method or literature study. The
use of this method is carried out by the author to obtain or search for solutions to problems
that want to find answers, namely about how Good Corporate Governance in conventional
views and Islamic views. The stages carried out in analyzing conventional Good Corporate
Governance / GCG and Good Corporate Governance in Islamic views are by collecting
literature or reviews and scientific papers that discuss conventional Good Corporate
Governance and GCG in Islamic views. The next step is to identify the problem under
study, then classify the problem and analyze it conducting a presentation that addresses the
topic which was researched and then made a conclusion.
Findings and Discussion
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
Findings
The impact of the 1998 economic crisis in United States led to increased awareness of
the importance of GCG (Good Corporate Governance) implementation. The importance of
implementing Good Corporate Governance has been agreed by entrepreneurs in United
States as evidenced by the signing of the LoI (letter of Intent) with the IMF (International
Monetary Fund) in 1998 which became the background for the formation of the National
Committee for Corporate Governance Policy in 1999. There are 5 (five) main principles of
GCG, including openness, accountability, responsibility, independence and fairness
(Hasnati, et al: 2019).
A system that includes a collection of models, procedures and mechanisms that are the
result of a design to manage a company using a foundation of accountability that can
achieve an increase in company value in the future (long term) is called corporate
governance (Velnampy, 2013). A set of rules and encouragement by management to provide
direction and supervision in The implementation of the company's activities is the direction
obtained in the corporate governance system. So that Good Corporate Governance / GCG
can provide a great opportunity to increase profits and company value in the long term.
Good Corporate Governance is a design model that provides direction in managing a
company that is carried out professionally based on the principles of openness
(transparency), accountability, responsibility, independence, fairness and equality. The
implementation of Good Corporate Governance / GCG is one of the demands /
requirements for companies in United States in order to compete at the national and
international levels which gives the company considerable strength / durability in the face of
various risks. In addition, GCG can be a driving force for the realization of clean,
transparent and professional management workflows so as to provide increased value and
trust in the company (Carolina, 2017).
Corporate Governance is a system that is implemented so that agency problems can be
reduced by monitoring management activities, limiting the number of employees, and
limiting the number of employees opotunistic management gait, and reduce shareholder
dependence in the face of information risk. Where when the company has been listed on the
IDX, the company is faced with the requirement to implement / implement Good Corporate
Governance (GCG) (Rusdyanto et al: 2017).
One of the absolute requirements for banking to be well developed is to implement the
principles of GCG / Good Corporate Governance so that trust from the public and the world
can be built. Where the principle of openness must be embraced by banks as intermediary
institutions and public trust institutions in carrying out their business activities. Furthermore,
the principles of openness adopted by banks include (1) disclosure of information is carried
out in a timely, adequate, clear, accurate and comparable manner and makes it easy for
stakeholders to obtain this information in accordance with their rights. Information
disclosure does not only cover the vision and mission but also covers various aspects of
strategy, finance, management, etc. including GCG implementation.
Bank secrecy provisions in accordance with regulations must still be fulfilled even if the
bank adheres to the principle of openness. (4) Information about Bank policies must be
submitted in writing and can be communicated to various parties who have an interest
(Hasnati, et al: 2019). Furthermore, the principles of bank accountability include (1) Clear in
making responsibility provisions, (2) having confidence in the competence in accordance
with the responsibilities of each part and having an understanding of their role in
implementing GCG, (3) in bank management it must be ensured that there is a check and
balance system, (4) having bank performance measurements. Furthermore, the fulfillment of
the principles of responsibility, independence and fairness principles (Hasnati, et al: 2019).
Discussion
The national committee on governance policy (KNKG) has established general
guidelines for good corporate governance that must be adopted by companies. There are 5
(five) basic pillars of GCG/Good Corporate Governance, including transparency,
accountability, responsibility, and accountability. responsibility), independency and fairness
(equality and fairness) (Rusdiyanto et al., 2017).
Transparency, the company has an obligation to submit regular reports. Openness in
convey important information as well as in decision-making.
Accountability, the functions and responsibilities of each part of the company are clear
so that it is effective in managing its business.
Responsibility, the existence of the business / business run by the company must
provide benefits both to service users and the community around the company.
Independency, business governance is carried out independently and is not influenced
by any interests.
Fairness, where all parties have the opportunity to obtain organization/company
information in accordance with the principle of transparency. The fulfillment of all
stakeholder rights arising from agreements and applicable regulations in accordance
with the principles of justice and equality.
The existence of depositors as a stakeholder group in financial institutions makes
governance in financial institutions unique when compared to non-financial institutions.
However, the governance structure in conventional banking is not much influenced by the
presence of depositors. This is due to (1) Customer deposits have received full guarantee
provisions to be paid according to the bank's contract. (2) the implementation of a guarantee
scheme provided by the deposit insurance agency and the government. (3) the banking
supervisory authority has implemented rules in the form of prudential provisions in banking.
These things are the protection of the interests of depositors.
As for some Islamic principles that support the implementation of Good Corporate
Governance / GCG or governance in the banking world are sharia principles. These sharia
principles are part of the sharia system. The implementation of the sharia system in Islamic
banking can be seen from two perspectives, namely macro and micro perspectives. Sharia
values in a micro perspective require that all funds obtained in the Islamic banking system
be managed with high integrity and very carefully, these values are (Umam, K: 2016):
Shiddiq, ensures that the management of Islamic banking is carried out with morality
that upholds the value of honesty. This value reflects that the management of public
funds will be carried out by prioritizing permissible (halal) methods and avoiding
dubious methods. (subhat), especially those that are prohibited (haram).
Tabligh, continuously socialize and educate the public about the principles, products
and services of Islamic banking. In conducting socialization, it should not only
prioritize the fulfillment of sharia principles, but also must educate the public about the
benefits for users of Islamic banking services.
Amanah, strictly maintaining the principles of prudence and honesty in managing
funds obtained from fund owners (shohibul maal) so that mutual trust arises between
fund owners and investment fund managers (mudharib).
Fatonah, ensures that bank management is carried out professionally and
competitively so as to generate maximum profit within the risk level set by the bank.
This includes services that are full of accuracy and politeness (ri'ayah) and a sense of
responsibility (mas'uliyah).
In a macro perspective, values Shariah requires Islamic banking to contribute to the
welfare of society by fulfilling the following:
Zakat rules condition the behavior of people who prefer to invest rather than just save
their assets. This is possible because zakat for investment is imposed only on
investment returns while zakat for saving assets is imposed on the principal.
The rule of prohibiting usury, encouraging equity-based financing and prohibiting
usury. It is expected that these non-usury products will encourage the formation of a
tendency for people not to be sure and shift towards a risk-taking attitude.
The rule of prohibiting gambling or maisir is reflected in bank activities that prohibit
investments that have no connection with the real sector. This condition will shape
people's tendency to avoid speculation in their investment activities.
The rule of prohibiting gharar (uncertainty), prioritizing transparency in transactions
and other operations and avoiding uncertainty.
Both perspectives reflect Sharia values in Islamic banking. These values also
characterize which is unique to Islamic banks. Thus, the implementation of GCG principles
in Islamic banking must refer to existing positive legal provisions, which in addition must
also apply sharia principles. So that in the end, bank governance is obtained, which in
addition to being able to provide benefits to stakeholders while still running on the rails /
corridors of sharia (Umam, K: 2016). Furthermore, referring to the principles above, there
are differences in conventional and sharia / Islamic Good Corporate Governance located in
sharia compliance. Where based on the concept of sharia compliance in Islamic banking, it
means the application of Islamic sharia principles. The most important thing for customers
and the public is the existence of shariah compliance assurance for various Islamic banking
activities (Maradita, A: 2014).
There are 3 (three) roles of the Sharia Supervisory Board (DPS) in Islamic financial
institutions based on AAOIFI, namely making assessments, providing direction, and
carrying out supervisory duties on Islamic banking activities so that there is conformity
between activities with regulations and sharia principles. Meanwhile, according to DSN-
MUI, in addition to this role there is one An additional role of the Sharia Supervisory Board
(DPS) is to carry out socialization and education to the public related to Islamic banking
(Choiriyah, 2015).
Thus, the role of the Sharia Supervisory Board (DPS) in implementing the principles of
Good Corporate Governance (GCG) in Islamic banking is (1) directing the directors of
Islamic banking regarding various matters related to sharia aspects, (2) assessing the
application / implementation of the National Sharia Council (DSN) fatwa in Islamic banking
operations, (3) the task of supervising the application of the National Sharia Council (DSN)
fatwa has been carried out properly (Choiriyah, 2015).
The differences between corporate governance in conventional and Islamic views
(Endraswari, H: 2015) are (1) conventional CG principles of transparency, accountability
responsibility and fairness while CG principles in Islam, shiddiq, amanah, tabligh and
fathonah. (2) the legal basis of conventional CG is the PT Law, Bapepam regulations, PBI
and SE BI while the legal basis of CG in Islam is the Quran and Hadith. (3) the structure of
conventional CG based on PBI 2007 is the GMS, the Board of Commissioners and directors
while the structure of CG in Islam is the Quran and Hadith in Islam based on PBI 2009 are
GMS, Board of commissioners, directors and DPS. (4) conventional CG mechanisms are
internal and external while CG in Islam is a cooperation contract and deliberation (meeting),
(5) the effect of conventional CG decision making is shareholders while the effect of
decision making in CG in Islam is stakeholders, (6) the purpose of conventional CG (Bhatti
and Bhatti, 2009) is to pay attention to the interests of shareholders while the goal in Islamic
CG (Hasan, 2008) is Maqashid Sharia.
Conclusion
Good Corporate Governance (GCG) in conventional and Islamic views conceptually
basically has similarities, the difference is the existence of sharia compliance or the
application of sharia principles in Islamic bank operations and the existence of DPS (Sharia
Supervisory Board) which has the task of carrying out supervisory functions in Islamic
banking and the existence of DSN-MUI (National Sharia Council of the United States
Ulama Council).
