GOOD CORPORATE GOVERNANCE IN ISLAMIC FINANCIAL
INSTITUTIONS
Introduction
In almost all parts of the world, the term Good Corporate Governance, which is often
abbreviated in this study as GCG, has become an important and interesting issue. First, GCG
is one of the keys to a company's success to grow and be profitable in the long term, while
winning global business competition. Second, the economic crisis in Asia and Latin America
is believed to have arisen due to the failure of GCG implementation.
The issue of GCG before the economic crisis hit United States actually tended not to
be interesting to discuss. However, the term GCG is not new. Large companies listed on the
stock exchange and multinational companies have discussed GCG in advance. However, it
must be recognized that the practice of GCG itself was still very limited until the crisis in
1997.
This understanding confirms that United States corporations have not practiced good
governance. Survey from Booz Allen Hamilton Inc. in East Asia in 1998 showed that United
States has the lowest Corporate Governance (CG) index with a score of 2.88 far below
Singapore (8.93), Malaysia (7.72) and Thailand (4.89). The low quality of GCG of
corporations in United States is thought to be the trigger for the downfall of these companies
(Tri, Journal of Islamic Economics La Riba Vol 7 No 1 July 2013. p. 16). In 1998, The
Organization foe Economic Cooperation and Development (OECD) issued a set of GCG
principles that were developed in a comprehensive manner. The GCG principles were
developed to be used as a reference in various countries that have different legal systems,
cultures and environmental characteristics. These universal principles can be used as
guidelines by all countries or companies, but must be harmonized with the legal system,
regulations / laws and values that apply in their respective countries when needed.
Good CG is recognized as important by Islamic economists for all corporations, but it
is even more important for Islamic financial institutions. Here CG has a special meaning
because there are agreements that Islamic financial institutions must be part of the
paradigmatic ideals of the development of financial systems and Islamic financial systems
that emphasize moral content in all business behavior and transactions (Frank E. Vogel and
Samuel L. Hayes. 2007).
In connection with this, the implementation of GCG has become an obligation of all
banks operating in United States. This is marked by the emergence of Bank United States
Regulation (PBI) No. 8/4/2006 which was later amended by PBI No. 8/14/2006 concerning
the implementation of GCG for commercial banks and PBI No. 11/33/2009 which regulates
the implementation of GCG for Sharia Commercial Banks (BUS) and Sharia Business Units
(UUS) in United States. However, the fundamental question is how a bank, especially an
Islamic bank in United States, can develop corporate governance that is truly in accordance
with its specific needs and identity as initiated by Islamic economic thinkers. This is
important to emphasize considering that Islamic banking has certain characteristics that
require Corporate governance in accordance with these characteristics (Tri, Journal of Islamic
Economics La Riba Vol 7 No 1 July 2013. Page 17).
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
Understanding
Data mining in defining Good Cooperate Governance (GCG) has experienced
problems, especially in interpreting the meaning that can accommodate various interests. The
lack of a definition that can accommodate all parties is due to the cross-sectoral scope of
GCG. GCG can be approached with various disciplines, such as macroeconomics, accounting,
finance, management, psychology, sociology and politics.
GCG is a term derived from the English language, namely good which means good,
Corporate which means company and governance which means regulation. In general, the
term Good Corporate Governance is defined in United States as good corporate governance.
This term, in the banking world, is defined as good bank governance.
According to the World Bank, CGC are rules, standards and organizations in the
economic field that govern the behavior of company owners, directors and managers and the
detail and description of their duties and authority and accountability to the World Bank
investors (shareholders and creditors). The aim is to create a system of checks and balances to
prevent possible misuse of company resources and still encourage company growth.
Good organizational governance can be seen in terms of internal organizational
mechanisms or external organizational mechanisms. The internal mechanism focuses more on
how the leadership of an organization manages the running of the organization in accordance
with the principles above. Meanwhile, the external mechanism emphasizes more on how the
organization's interaction with external parties runs in harmony without neglecting the
achievement of organizational goals (Tri, Journal of Islamic Economics La Riba Vol 7 No 1
July 2013).
The Organization for Economic Co-Operation and Development (OECD) defines
GCG as a set of relationships between the company's management, board and shareholders
and other parties who have an interest in the company. GCG requires structure, tools to
achieve goals and monitoring of performance. Good GCG implementation can provide a good
stimulus or incentive for the board and management to achieve goals that are in the common
interest (Widyaastuti, Journal Panutan Bisnis, Volume 4, Number, 2001).
The Regulation of the Minister of State of State-Owned Enterprises (BUMN) states
that GCG is the principles that underlie a process and mechanism for managing a company
based on laws and regulations and business ethics. The aim is to optimize the value of the
company so that it has strong competitiveness, both nationally and internationally, so that it is
able to maintain its existence and live sustainably to achieve the company's goals and
objectives.
Bank United States explains that GCG is a bank governance that applies five
principles, namely:
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process,
Accountability is the clarity of the function and implementation of the accountability
of the bank's organs so that its management runs effectively,
accountability is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management,
Professionals are competent, able to act objectively and free from influence or
pressure from any party (independent) and have a high commitment to developing
Islamic banks.
Fairness, namely justice and equality in fulfilling the rights of stakeholders
based on agreements and applicable laws and regulations (Source: National
Committee on Governance Policy. (2006), General Guidelines for United States Good
Corporate Governance. Jakarta: National Committee on Governance Policy. pp. 5-7).
GCG is basically a system that includes inputs, processes and outputs as well as a set
of regulations that regulate the relationship between stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners and the board of
directors in order to achieve company goals.
GCG is intended to regulate these relationships and prevent irregularities in
implementing the company's strategy and to ensure that if mistakes occur, they will be
corrected immediately. the emergence of GCG is due to the relationship gap that occurs in the
company with what should happen (Fauzan, Journal of Islamic Economics La Riba Vol 7 No
1 July 2013).
Thus, GCG is a system that organizes, manages and oversees the process of
controlling the business to increase share value, as well as a form of attention to stakeholders.
GCG is expected to maintain a balance between the achievement of economic goals and
societal goals. The challenge that arises in GCG is to find ways to maximize wealth creation
in such a way that it does not impose unnecessary costs on third parties or society.
Implementation Of Islamic Banking
Along with the development of Islamic banking, which is characterized by the
increasing variety of Islamic banking products and the increase in service networks, the
implementation of GCG in Islamic banking has become increasingly important. Its
implementation in the world of Islamic banking must be based on five basic principles,
namely transparency, accountability, responsibility, professionalism, and fairness (Sri, Journal
of Business Role Model, Volume 4, Number, 2001).
Islamic banks must ensure that the GCG principles have been applied to every aspect
of the business and at all levels. The implementation of GCG principles is necessary to
achieve business continuity (sustainability) of Islamic banks while taking into account the
interests of shareholders, customers and other stakeholders. The basic principles of GCG in
Islamic banks as described, namely.
Transparency
Transparency is openness in disclosing material and relevant information and
openness in the decision-making process. This principle is needed so that the business
activities of Islamic banks run objectively, professionally, and to protect the interests of
stakeholders. Transparency contains elements of disclosure and provision of information in a
timely manner timely, adequate, clear, accurate, and comparable and easily accessible to
stakeholders and the public.
In applying the principle of transparency, Islamic banks provide material and relevant
information in a manner that is easily accessible and understood by stakeholders. Islamic
banks should also take the initiative to disclose not only matters required by laws and
regulations, but also matters that are important for decision-making by shareholders, creditors,
and other stakeholders.
Accountability
Accountability is the clarity of functions and the implementation of accountability of
bank organs so that management runs effectively. Accountability contains elements of clarity
of function in the organization and how to account for it. Accountability is a necessary
prerequisite for achieving sustainable performance of Islamic banking businesses.
In applying the principle of accountability, Islamic banks as institutions and officials
who have the authority must be able to account for their performance in a transparent and
accountable manner. For this reason, Islamic banks must be managed in a healthy,
measurable, and professional manner by taking into account the interests of shareholders,
customers, and other stakeholders.
Responsiveness
Responsibility is the conformity of bank management with applicable laws and
regulations and the principles of sound bank management. The principle of responsibility is
required in Islamic banks in order to ensure the maintenance of the bank's business continuity
in the long term.
In applying the principle of responsibility, Islamic banks must comply with applicable
laws and regulations and internal bank regulations and carry out their responsibilities to
society and the environment so that business continuity can be maintained in the long term
and gain recognition as a good corporate citizen. Islamic banks must also adhere to the
principle of prudence.
Professional
Professional, namely having competence, being able to act objectively and free from
influence or pressure from any party (independent) and having a high commitment to
developing Islamic banks. To facilitate the implementation of GCG principles, the company
must be managed independently so that each organ of the company does not dominate each
other and cannot be intervened by other parties.
Professionalism contains elements of independence from the domination of other
parties and applies objectively in carrying out its duties and obligations. In relation to the
application of professional principles, Islamic banks must be managed independently so that
each organ of the company and all levels under it cannot dominate each other and cannot be
intervened by any party that can affect objectivity and professionalism in carrying out their
duties and responsibilities.
Fairness
Fairness is justice and equality in fulfilling the rights of stakeholders based on
agreements and applicable laws and regulations. Islamic banks must always pay attention to
the interests of shareholders and other stakeholders based on the principles of fairness and
equality.
Fairness contains elements of fair treatment and equal opportunity in accordance with
their proportions. In carrying out its activities, Islamic banks must always pay attention to the
interests of shareholders, customers and other stakeholders based on the principles of fairness
and equality of each party concerned (Sri, , Journal of Business Role Model, Volume 4,
Number, 2001).
The Role Of The Sharia Council
A role is a pattern of attitudes, values and goals expected of a person based on their
position in society. This position is an identification of a person's status or place in a social
system and is a manifestation of self-actualization. According to the Big United States
Dictionary, a role is a set of behaviors that are expected to be possessed by someone who is
positioned in society. Meanwhile, according to Chaplin, a role is an individual's function or
role in a group or institution. According to him, a role is also a function or behavior that is
expected of an individual or that characterizes or characterizes him.
In performing his role, a person is influenced by social circumstances both from
within and from outside and is stable. Thus, a role is a set of behaviors expected by others of a
person according to his position in a system. AAOIFI in Governance Standard for Islamic
Financial Institutions (GSIFI) explains that the role of DPS is directing, reviewing and
supervising the activities of Islamic Financial Institution in order to ensure that they are in
compliance with Islamic shari'a rules and principles. This means that the role of DPS is DPS
directs, assesses and supervises all activities of Islamic financial institutions to ensure that
their activities are in accordance with sharia principles and rules. Thus, according to AAOIFI,
there are three roles of DPS in Islamic financial institutions, namely assessing, directing and
supervising the activities of Islamic banks so that they are in accordance with sharia rules and
principles.
In addition to the three roles above, DSN MUI added one role of DPS which is to
socialize and educate the public about Islamic banks through media that have been running in
the community, such as khutbah, majelis ta'lim, recitations. Or, more precisely, the role of
DPS according to DSN MUI is as a party who also participates in marketing Islamic banks to
the public.
Considering the role of DPS according to AAOIFI and DSN-MUI, the role of DPS in
the implementation of GCG principles in Islamic banks is as follows:
Directing is providing direction, thoughts, suggestions and advice to the directors of
Islamic banks on matters relating to sharia aspects.
Reviewing is scrutinizing, examining, reviewing and assessing the implementation of
DSN fatwas in Islamic bank operations.
Supervising is carrying out supervisory duties both actively and passively on the
implementation of DSN fatwas in Islamic bank operations.
Conclusions
GCG implementation in Islamic banks is based on five principles, namely
transparency, accountability, responsibility, professionalism and fairness. In order to
implement these five principles, Islamic banks must comply with sharia principles. Therefore,
the role of the Shari'ah Council in the implementation of GCG is very important, namely to
supervise and ensure that an Islamic bank in its operations is in accordance with sharia
principles. The role of DPS in the implementation of GCG principles in Islamic banks is:
Provide direction, thoughts, suggestions and advice to the board of directors of Islamic
banks on matters relating to sharia aspects.
Observe, examine, review and assess the implementation of DSN fatwas in Islamic bank
operations.
Carry out supervisory duties both actively and passively on the implementation of DSN
fatwas on Islamic bank operations.
namely conducting socialization and education to the public about Islamic banks through
media that are already running in the community, such as khutbah, majelis ta'lim,
recitations.
