Strengthen GCG regulations

Oct 13, 2025 by talynt.org 125 views

Effect of Good Corporate Governance on Property and Real Estate Company Performance Listed on the 2008-2010 Indonesia Stock Exchange

Introduction

Good Corporate Governance (GCG) is a crucial aspect of a company's success, particularly in the property and real estate sectors. It encompasses a set of principles and practices that ensure the company operates in a transparent, accountable, and responsible manner. The Indonesia Stock Exchange (IDX) has been promoting GCG among listed companies, but its impact on company performance remains a topic of debate. This study aims to investigate the relationship between GCG and the performance of property and real estate companies listed on the IDX during the period 2008 to 2010.

Background

The property and real estate sectors in Indonesia have experienced significant growth in recent years, driven by increasing demand for housing and commercial spaces. However, the sector is also characterized by high risks, including market volatility, regulatory uncertainty, and environmental concerns. In this context, GCG becomes a critical factor in ensuring the sustainability and success of property and real estate companies. The IDX has been promoting GCG among listed companies, but its impact on company performance remains a topic of debate.

Methodology

This study focuses on the influence of GCG on the performance of property and real estate companies listed on the IDX during the period 2008 to 2010. The population of this study includes all property and real estate companies listed on the IDX in the 2008-2010 period and has issued an audited annual report. Research data obtained from the IDX website (www.idx.co.id). The sampling technique used is purposive sampling, and obtained 22 companies per year as research samples.

The data analysis method used in this study includes the classical assumption test, hypothesis test, T test, and F test with the help of SPSS software version 17. The results show that GCG, which is proxied through independent variables such as the Board of Commissioners, Independent Commissioners, Board of Directors, and the audit committee, did not have a significant influence on the performance of property companies and real estate listed on the IDX in the period 2008 to 2010.

Results

The results of this study show that GCG, which is proxied through independent variables such as the Board of Commissioners, Independent Commissioners, Board of Directors, and the audit committee, did not have a significant influence on the performance of property companies and real estate listed on the IDX in the period 2008 to 2010. This means both partially and simultaneously, independent variables have no influence on company performance.

This result is quite surprising and needs to be studied further. Several factors that might be the causes include:

Weak GCG regulations: GCG regulations in Indonesia in that period may not be strong enough to encourage the application of GCG optimally.
Corporate culture: Corporate culture in Indonesia at that time may not fully support the application of GCG principles.
External Factors: Fluctuating global economic conditions in 2008-2010 may also be a factor that affects the company's performance.

Discussion

The results of this study have important implications for stakeholders in the property and real estate sectors in Indonesia. Further efforts are needed to encourage the application of effective GCG, both through tighter regulations and through the development of corporate culture that focuses on good governance. The results of this study can also be taken into consideration for investors to assess the performance of property companies and real estate in Indonesia. It is essential to pay attention to not only the company's financial performance but also the quality of the governance.

Conclusion

In conclusion, this study provides important insights into the relationship between GCG and the performance of property and real estate companies listed on the IDX during the period 2008 to 2010. The results show that GCG, which is proxied through independent variables such as the Board of Commissioners, Independent Commissioners, Board of Directors, and the audit committee, did not have a significant influence on company performance. This study highlights the need for further research to investigate the factors that affect the application of GCG in the property and real estate sectors in Indonesia.

Recommendations

Based on the results of this study, the following recommendations are made:

Strengthen GCG regulations: The government and regulatory bodies should strengthen GCG regulations to encourage the application of GCG optimally.
Develop corporate culture: Companies should develop a corporate culture that focuses on good governance and encourages the application of GCG principles.
Investor awareness: Investors should be aware of the importance of GCG in assessing the performance of property companies and real estate in Indonesia.

Limitations

This study has several limitations, including:

Sample size: The sample size of this study is limited to 22 companies per year, which may not be representative of the entire population of property and real estate companies listed on the IDX.
Data availability: The data used in this study is limited to the period 2008 to 2010, which may not be representative of the current market conditions.
Methodology: The methodology used in this study is limited to the classical assumption test, hypothesis test, T test, and F test, which may not capture the complexity of the relationship between GCG and company performance.

Future Research Directions

This study provides several avenues for future research, including:

Investigating the factors that affect the application of GCG: Future research should investigate the factors that affect the application of GCG in the property and real estate sectors in Indonesia.
Developing a more comprehensive model: Future research should develop a more comprehensive model that captures the complexity of the relationship between GCG and company performance.
Investigating the impact of GCG on company performance: Future research should investigate the impact of GCG on company performance in the property and real estate sectors in Indonesia.
Frequently Asked Questions (FAQs) about the Effect of Good Corporate Governance on Property and Real Estate Company Performance Listed on the 2008-2010 Indonesia Stock Exchange

Q: What is Good Corporate Governance (GCG)?

A: Good Corporate Governance (GCG) is a set of principles and practices that ensure a company operates in a transparent, accountable, and responsible manner. It encompasses the company's leadership, management, and operations, and is essential for ensuring the company's long-term success and sustainability.

Q: What is the significance of GCG in the property and real estate sectors?

A: GCG is crucial in the property and real estate sectors because it helps to ensure that companies operate in a transparent and accountable manner, which is essential for building trust with stakeholders, including investors, customers, and employees. GCG also helps to mitigate risks and ensure that companies comply with regulatory requirements.

Q: What are the key components of GCG?

A: The key components of GCG include:

Independent Board of Commissioners: A board of commissioners that is independent and free from conflicts of interest.
Independent Board of Directors: A board of directors that is independent and free from conflicts of interest.
Audit Committee: An audit committee that is responsible for ensuring the accuracy and reliability of financial reports.
Transparency and Disclosure: Transparency and disclosure of financial information and other relevant information.

Q: What are the benefits of GCG in the property and real estate sectors?

A: The benefits of GCG in the property and real estate sectors include:

Improved transparency and accountability: GCG helps to ensure that companies operate in a transparent and accountable manner, which is essential for building trust with stakeholders.
Reduced risk: GCG helps to mitigate risks and ensure that companies comply with regulatory requirements.
Improved financial performance: GCG helps to ensure that companies make informed decisions and manage their finances effectively, which can lead to improved financial performance.
Increased investor confidence: GCG helps to build trust with investors and increase their confidence in the company.

Q: What are the challenges of implementing GCG in the property and real estate sectors?

A: The challenges of implementing GCG in the property and real estate sectors include:

Lack of awareness and understanding: Many companies in the property and real estate sectors may not be aware of the importance of GCG or may not understand how to implement it.
Resistance to change: Implementing GCG may require significant changes to a company's culture and practices, which can be resisted by some stakeholders.
Resource constraints: Implementing GCG may require significant resources, including time, money, and personnel.
Regulatory requirements: Companies in the property and real estate sectors may be subject to complex regulatory requirements, which can make it difficult to implement GCG.

Q: What are the next steps for companies in the property and real estate sectors to implement GCG?

A: The next steps for companies in the property and real estate sectors to implement GCG include:

Conducting a GCG assessment: Conducting a GCG assessment to identify areas for improvement.
Developing a GCG plan: Developing a GCG plan that outlines the steps to be taken to implement GCG.
Implementing GCG practices: Implementing GCG practices, including establishing an independent board of commissioners, independent board of directors, and audit committee.
Monitoring and evaluating GCG: Monitoring and evaluating GCG to ensure that it is effective and making adjustments as needed.

Q: What are the benefits of GCG for investors?

A: The benefits of GCG for investors include:

Improved transparency and accountability: GCG helps to ensure that companies operate in a transparent and accountable manner, which is essential for building trust with investors.
Reduced risk: GCG helps to mitigate risks and ensure that companies comply with regulatory requirements.
Improved financial performance: GCG helps to ensure that companies make informed decisions and manage their finances effectively, which can lead to improved financial performance.
Increased confidence: GCG helps to build trust with investors and increase their confidence in the company.

Q: What are the next steps for investors to take advantage of GCG?

A: The next steps for investors to take advantage of GCG include:

Researching companies: Researching companies to determine if they have implemented GCG.
Evaluating GCG practices: Evaluating GCG practices to determine if they are effective.
Monitoring GCG performance: Monitoring GCG performance to ensure that it is effective and making adjustments as needed.
Supporting companies that implement GCG: Supporting companies that implement GCG by investing in them and promoting their practices.