Abstract
Nowadays, companies are not only required to provide information on financial accountability but also about corporate performance related to social and environmental aspects in order to promote shareholder values and sustainable practices, which eventually lead to the concept of corporate governance. This study aims to discuss the implementation of corporate governance, in palm oil companies in Aceh Province. A qualitative research method is applied with an empirical juridical approach. Data were collected by interviewing respondents and analyzing corporate reports. The result found that the implementation of corporate governence by the companies through the availability of code of good corporate governance (GCG) and code of conduct. Although it does not necessarily guarantee the implementation applied properly, but it can show company commitment to run a good business. Some companies also implement corporate social and environmental responsibility in a different approach. However, some of the activities are actually not in accordance with existing regulations, but is only limited to activities that have no direct impact on community.
Highlights
Palm oil is a strategic commodity that contributes to Indonesia's income
This study aims to discuss the implementation of corporate governance, in palm oil companies in Aceh Province
The result found that the implementation of corporate governence by the companies through the availability of code of good corporate governance (GCG) and code of conduct
Summary
Palm oil is a strategic commodity that contributes to Indonesia's income. Aceh is one of the provinces where 30% of its economic growth is obtained from the palm oil industry. Data shows that palm oil plantation areas in 2017 reached 421,820 hectares consisting of community plantations covering 220,092 hectares (27.06%) and company-owned plantations of 201,728 hectares (10.46%). The plantation area has increased by 65,976 Ha (18.54%) in 2010, covering an area of 355,844 Ha of smallholder plantations, 173,217 Ha, and company-owned plantations of 182,627 Ha. The increase was due to the implementation of sustainable palm oil production programs and the high interest of the community in developing oil palm plants because it has high economic value. Data from Agriculture and Plantation Services, Aceh Province (Dinas Pertanian dan Perkebunan Propinsi Aceh) found that there are about 61 companies recorded, of which 39 are still operating, 8 are in the development stage and there are around 14 companies that are no longer operating.[1]
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