1. Board Structure
1.1. Anglo-Saxon Countries
1.1.1. One Tier/ Single Board system
1.2. Continental Europe
1.2.1. Two Tier/Double Board System
2. CG Risks = Decrease Firm Value
2.1. CEO duality
2.1.1. ONE TIER
2.1.1.1. TOO MUCH power in one hand, second of pair eyes are needed to reduce wrong decision made in one hand.
2.1.2. TWO TIER
2.1.2.1. Rivalry between the chair and CEO
2.1.2.2. Conflict between management and board
2.1.2.3. Confusion of 2 public corporate spoke person
2.1.2.4. curtails innovation
2.2. Independence of Non-Executive Directors
2.2.1. have to be someone who is truly independent;avoid personal & financial risks with the company
2.3. Constitution of the comitees
2.3.1. audit committee
2.3.2. Compensation committee
2.3.3. nominating committee
3. Board Mechanism
3.1. Internal Governance Mechanism
3.1.1. Ownership Concentration
3.1.2. Board of Directors
3.1.3. Executive Compensation
3.2. External Governance Mechanism
3.2.1. Market for corporate control
3.2.2. Executive labor market
4. Why do we need Corporate Governance?
4.1. Agency Problem
4.1.1. conflict of interest: the top management acts according to their self interest
4.1.2. asymmetrical information: the top management knows what the boards don't know
4.1.3. increase cost
4.1.3.1. agency cost: to monitor principal and agent relations
4.1.3.2. economic damage: management avoid high risk project for the sake of their position, management works in opportunistic way
5. Institutional Therory
5.1. coercive isomorphism: managements tend to follow the rules, while there is also informal pressure inside the company that even make them to be uncompliance
5.2. Mimetic isomorphism: copying and pasting both compliance and non compliance act from other company
5.3. normative isomorphism: people from same background think and act the same way
5.3.1. "group think"
5.3.1.1. expected act that could be "read" by other company
6. Corporate Governance Practices in Indonesia
6.1. TWO TIER SYSTEM
6.1.1. POJK NO. 33/POJK04/2014