Abstract
Corporate Governance is a structure consisting of shareholders, directors, managers, a set of objectives to be achieved by the company, and tools that will be used in achieving goals and monitoring performance. This study aims to determine the application and benefits of Corporate Governance at POSCO, using descriptive qualitative analysis methods. The application of the principles of Corporate Governance at POSCO has been carried out since 1997 through the management philosophy of "Corporate Citizenship: Building a Better Future Together". For example, the principle of equality is carried out by POSCO by making stronger shareholder protection through the Cumulative Voting System to strengthen the rights of small shareholders. The principle of independence is implemented through the separation of share ownership from company management, assigning 7 out of 12 members of the BoD (Board of Directors) to be external directors, and to separate the functions of the CEO and Chairman of the Board. The principle of responsibility is applied through the establishment of an audit committee, the Corporate Social Responsibility program. Corporate Governance had earned POSCO many national and international awards
Highlights
Increasing profits, expanding business, or adding capital is a goal that is commonly found in companies, but companies have evolved from something that is relatively obscure to a very dominant world economic institution
The application of the principle of equality is carried out by POSCO by making stronger shareholder protection through the Cumulative Voting System to strengthen the rights of small shareholders (March, 2004), the postal voting system (March, 2004), and the electronic voting system (February, 2019) introduced to facilitate shareholder decision making
The principle of independence is applied by POSCO by separating share ownership from company management. 7 of the 12 members of the BoD (Board of Directors) are external directors, and carrying out an objective and transparent process for the selection and appointment of external directors
Summary
Increasing profits, expanding business, or adding capital is a goal that is commonly found in companies, but companies have evolved from something that is relatively obscure to a very dominant world economic institution. The economic crisis is one example due to unethical business practices of companies. Many large companies in Indonesia were troubled and even bankrupt due to poor corporate governance practices. Examples include government banks that have been liquidated (Bank Pembangunan Indonesia, Bank Dagang Negara, Bank Bumi Daya, Export Import Bank), PT Lapindo Brantas (an oil and gas exploration company in Sidoarjo-East Java), and PT Freeport Indonesia (Papua). The bankrupt of several govermant banks was caused by the bank's directors' credit expansion policy was unwise (unprudential credit policy). Large amounts of credit were given without going through a careful and objective study of their business feasibility study. The govermant banks are experiencing financial difficulties because the company is unable to repay loans and interest
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