Two decades ago,
Global Economic Crisis was happened around the world which affected in
Southeast Asian. Some countries in Southeast Asian such as Indonesia, Malaysia,
Philippines, and Thailand got serious impact. Many of companies in Indonesia
are out of business due to economic crisis. One of the causes many companies bankrupts
is poor of implementation good corporate governance. Effendi (2009) state that
in article one of the degree of the minister of BUMN No. 117/ M-MBU / 2002,
corporate governance is the structure and process which is used by organs of
BUMN to increase the success of business and corporate accountability based on
laws and ethical values. After global economic crisis in 1997-1998, companies
have been apply good corporate governance in theirs companies. In this
day, not only private company adopted good corporate governance but
institutions like college, university, public company and government also apply
good corporate governance. There are five correlations among implementation
five principles of good corporate governance which are accountability,
transparency, independence, responsibility and fairness to the institution performance.
principle of good corporate governance is accountability. Accountability is the
clarity of functions, responsible management, and operations, so that the
management company can work with effectiveness and economist, Emirzon, 2006. This principle has positive
influence to the institution performance.
This is known from result of research which has beta value of
unstandardized test 0.84 or 84 percent. It shows that principle of
accountability has good influence to the Politeknik Negeri Batam performance.
the second principle of good corporate governance based on Emirzon (2006), is transparent
of the process of decision making and disclosure of information that is
relevant to the company. With transparency, governance of institution can be
applied with very well. This principle has greatly good influence to the
institution performance. This is proved by result of beta value of
unstandardized test which is score 0.73.8 or 73.8 percent. This score give
indication that principle of transparency has positive effect to Politeknik
Negeri Batam performance.
principle of good corporate governance is independence which is one condition
where the company is managed professionally without conflict of interest and
influence from anyone or other party that does not match with the law and the
principles of healthy corporate, Emirzon (2006). In this day, independence is
fully needed to apply in the governance institution. In this is research, beta
value of unstandardized test of independence is 0.729 or 72.9 percent which
indicate that it has a good adequate effect to the Politeknik Negeri Batam
principle of good corporate governance is responsibility. According to Emirzon
(2006), the principle of responsibility is a management company’s conformity
with laws and regulations in force and the principles of healthy corporate.
This principle is much essential to apply in governance of institution because
performance of institution is plentiful affected by this principle. The
principle of responsibility has score 0.956 or 95.6 percent of beta value of
unstandardized test which is the highest score of principle of good corporate
governance. It is confirmation that this principle has highly great influence
to the Politeknik Negeri Batam performance.
The last principle
of good corporate governance is fairness principle which is explain about objectivity
and equality in fulfilling the rights of stakeholders arising as a result of
the agreement and the legislation in force. The principle of fairness is very
well to apply in governance an institution such as university, public company,
and government because it will make similarity among stakeholders. In this
research, fairness, which has score of beta value of unstandardized test 0.799
or 79.9 percent, is the most important thing in good corporate governance and
the score of beta value shows us that fairness is significantly affected to the
Politeknik Negeri Batam performance.
this research, which has aim to know effect of implementation of principles of
good corporate governance to the institution performance, displays the result.
Each of principles of good corporate governance has significant effect to the
institution performance. The principle of responsibility becomes the most
principle which has influence to the Politeknik Negeri Batam performance.