CORPORATE GOVERNANCE LEMBAGA KEUANGAN ISLAM DI INDONESIA

Abstract

The purpose of this conceptual paper is to develop a discussion expounding the Islamic perspective of corporate governance in Islamic Financial Institutions in Indonesia as a special case of a broader decision-making theory that uses the premise of Islamic overview. This paper discuses, in the light of a sample survey of Islamic Financial Institutions in Indonesia, the measures that need to be taken to improve the overall corporate governance in these institutions. Corporate Governance is defined as a set of relationships between a company’s management. They are Board of Directors. Is shareholders and other stakeholders which provides the structure through which: (1) the objectives of the company are set and (ii) the means of attaining those objectives and monitoring performance are monitoring determined. Since the effective performance of the mechanisms and tools of corporate governance as well as the establishment of shared institutions will take place gradually over a period of time, the Islamic financial system will evolve only gradually. This need for a gradual approach should not, however, be taken as a license for doing nothing to enable the system to expand and improve rapidly to be able to meet successfully the challenges that it faces.

Key Words:  corporate governance, islamic financial institutions and performance monitoring.