Abstract
This article examines the current Indonesian Financial Service Authority (IFSA) regulations on corporate governance that deal with the relevance, concept, and application of the stakeholder model in the Indonesian banking sector. This study shows that the current IFSA regulations on corporate governance in the Indonesian banking sector encourage the application of the stakeholder model. However, they contain a vague definition of a stakeholder, fail to properly identify the legitimate stakeholders of the Indonesian banking sector, and provide no principles that can be used to align bank stakeholders’ interests. IFSA should revise these regulations so that they are more compatible with the theoretical basis and international best practices. This can be done through providing a concise definition of the concept of a stakeholder and offering normative and practical principles to be used when identifying the Indonesian banking sector legitimate stakeholders and aligning stakeholders’ interests.
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