SOEs and the People's Control Functions

Writer: Dony Abdul Chalid

Government and Parliament need to pay attention because of indications of agency problems in SOEs. Conflicts of interest between the management agent and the owner (agency problem) is the main problem corporate governance. In developed countries like the U.S. is also still a serious concern, for example the case of Goldman Sachs. This incident shows continue to put forward management what they thought was right without regard to the condition of the company. (Agency problems between management and the government is whether the actions of management in managing SOEs in line with the interests of the government as a shareholder of SOEs). This problem can be minimized relative, given the government a majority control of state-owned shares.
SOE has a great economic potential and to the very sectors that have a strategic role in the development process and improving people's welfare. Of course the public is also aware of SOEs has a function as public servants and help the government carry out development programs. However, this inefficiency should not be the shadow state. (The availability of information on SOE performance will encourage the formation of corporate governance both as a necessary condition of formation of an efficient state-owned and have a good quality service).

Government should continue to monitor the performance of SOEs, so that will not harm society. For example in the case of Goldman Sachs, the division of a major bonus in the company accepting government bailouts.

Governance: pemerintahan
The availability of information on SOE performance will encourage the formation of corporate governance both as a necessary condition of formation of an efficient state-owned and have a good quality service.
SOEs: BUMN
Agency problems between management and the government is whether the actions of management in managing SOEs in line with the interests of the government as a shareholder of SOEs.

References:
Chalid, A. D. (2010, February 12). SOEs and the People's Control Functions. Opini. Jakarta: Kompas.