Good corporate governance in cooperatives organization: Lesson learn from Indonesia

Abstract

Governance is a set of compliance principles that are now being applied to all types of companies, including non-bank financial corporations such as cooperatives. A cooperative is a national institution based on the principle of mutual cooperation that collects funds from the community and channels them back into the community. Governance has five main principles: transparency, accountability, responsibility, independence, and fairness and equality. This research aims to analyze the existing good corporate governance at cooperative organizations in East Lombok, Indonesia. The results of this research show that the principle of responsibility is the most widely implemented principle by the cooperatives in East Lombok, namely 67.75%. According to the principle of fairness and equality, an average of 48% of the cooperatives have undergone fair cooperation between each existing stakeholder. Then in third place is the principle of independence, with an average of 44.25%. The findings also demonstrate that 41% of cooperatives in East Lombok operate transparently, allowing all members, administrators, supervisors, and employees to access financial and non-financial information. The lowest figure is in accountability; that is, only 35.5% of the cooperatives have clarity of the functioning of the structure, system, and responsibility in its enforcement. The results of this study show that cooperatives in East Lombok have a good corporate governance system of only 59.12%. This is not a high value, so the cooperative in East Lombok should improve the good governance of cooperatives according to its principles.

Keywords

• corporate governance
• cooperatives organization
• accountability and responsibility
• east lombok