Implementation of Good Corporate Governance on Corporate and Market Performance

Good Corporate Governance (GCG) is a governance system that regulates and oversees the company's management process to increase share value and give attention to stakeholders, employees and the public. Indonesia in the implementation of GCG in 2010 to 2018 ranks last among 12 countries, Australia, Hong Kong, Singapore, Malaysia, Taiwan, Thailand, India, Japan, Korea, China, and the Philippines. The condition of state-owned enterprises in Indonesia is very difficult to develop due to government intervention so that directors do not perform well. The performance of state-owned enterprises (SOE) is not optimal due to the weak implementation of GCG principles as a whole. GCG variable as a corporate governance that will maximize the value of the company in the market. The management of assets and capital of a company can be seen from the existing financial performance. The data used in this study is the SOE found on the Indonesia Stock Exchange (IDX) for a period of three years, 2016-2018. This study used panel data analysis. The results of the study that there is no influence of GCG on market performance. The GCG mechanism has not been able to increase the value of SOE companies in the capital market. Financial information published as one of the elements of GCG is not used by investors. SOE need to reassess the implementation of GCG so that it can be carried out professionally in carrying out the oversight function of the company's management. Regulation regarding GCG must be stronger with clear sanctions.