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2023 | OriginalPaper | Chapter

Principal-Agent or Patron-Client? The Unspoken Concord of Indonesia’s Two-Tier Corporate Governance

Authors : Novita Ikasari, Umanto, Ika Sri Hartantiningsih

Published in: Sustainable Finance, Digitalization and the Role of Technology

Publisher: Springer International Publishing

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Abstract

Corporate governance (CG) in the banking sector is deemed as one of the most structured and regulated. When it applies to regional development banks, the regional dynamics contribute to the quality of corporate governance. Using Indonesia as a case in point, this paper aims at analyzing corporate governance practices based on dynamics amongst actors in regional development banks. Using agency and patron-client theory, the underlying dynamics amongst different actors representing the two-tier system applied by Indonesia are presented and elaborated. The study applies a qualitative approach. Data are collected using in-depth interviews with representatives from the board of directors and board of commissioners of selected regional development banks as well as regulatory agencies in Indonesia. This study proposes the application of the patron-client approach to understand the interactions amongst controlling shareholders, the board of commissioners, and the board of directors. In conclusion, a model of dynamic interactions amongst the actors is proposed based on two case studies constructed from a series of interviews to elaborate the dynamics.

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Metadata
Title
Principal-Agent or Patron-Client? The Unspoken Concord of Indonesia’s Two-Tier Corporate Governance
Authors
Novita Ikasari
Umanto
Ika Sri Hartantiningsih
Copyright Year
2023
Book
Sustainable Finance, Digitalization and the Role of Technology

Print ISBN: 978-3-031-08083-8

Electronic ISBN: 978-3-031-08084-5

Copyright Year: 2023

DOI
https://doi.org/10.1007/978-3-031-08084-5_33

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