IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE IN STATE-OWNED ENTERPRISES (SOEs)

Abstract

The implementation of risk management is part of Good Corporate Governance (GCG) with the aim of improving financial performance, competitiveness, and sustainability. This research aims to create a SOE sustainability model by analyzing the influence of GCG and SOEs' financial performance. Chief Risk Officer (CRO) and Risk Maturity Index (RMI) as moderation variables, and diversity of the Board of Directors as control variables. The sample number is 22 SOEs listed on the Indonesia Stock Exchange that issued sustainability reports from 2018-2022. Data analysis used a double linear regression method. The results of the study show that Financial Performance with Price Book Value (PBV) and Debt Equity Ratio (DER) proxies has a positive effect on sustainability with SOEs' revenue, profit, and Social and Environmental Responsibility (TJSL) proxies. CRO strengthens the positive influence of GCG on the sustainability of SOEs' revenues, profits and TJSL, and CRO strengthens the positive influence of PER Financial Performance on the sustainability of SOEs' revenues, profits and TJSL. RMI strengthens the positive influence of GCG on revenue sustainability and RMI strengthens the positive influence of DER and PER on profit sustainability.