Business Judgment Rule and Corporate Governance as the Strategic Imperative of Indonesian State-owned Enterprise

Abstract

The business judgment rule in state-owned enterprises can serve as either a protective shield or a boomerang for those involved within the mechanism of corporate governance. As such, this study aims to explore the relationship between good corporate governance and the business judgment rule principle in the context of the integrity and sustainability of directorial decisions amidst the dynamically changing context of a company’s legal responsibilities. Through a juridical normative method employing a conceptual approach, this study finds that good corporate governance cannot determine the implementation of the business judgment rule principle. This means that even though good corporate governance is significant in creating a conducive work environment for a responsible decision-making process, it cannot directly influence the implementation of the business judgment rule in cases involving state-owned enterprises.