The Urgency of Corporate Governance In Running Regional Companies

ABSTRACT The urgency to solidify the structure of governance in regional companies is due to the imbalance in the distribution of inter-componential roles and authorities in such companies. Governance structure has the function to distribute roles and functions of the organs within the companies, and to run as well as control the companies. The concepts adopted in the running of regional companies which are connected to the power and authority of the state’s agents (as held by state’s officers), the weakness of the regional government to motivate individuals for achieving the goal of the organization, and the stiff bureaucratic attitude, all cause the weakness of the governance structure in the regional companies. The imbalance in the distribution of roles and authority between various agents in regional companies is due to the disharmony or lack of synchronization in the rules that regulate the regional companies, to the dominant involvement and intervention of regional government, and to the weakness in the governance of regional companies due to the management concept that emphasizes power and authority. The measure for strengthening the structure of governance in the regional companies through the adoption of Good Corporate Governance needs the establishment of a mandatory regulation which can protect the interests of the parties involved in the running of the regional companies. Key words: Corporate Governance, Regional Companies