Corporate Governance Principles in Sovereign Wealth Fund : (The Case of Indonesia Sovereign Wealth Fund)

Open Access

Abstract

Indonesia established a Sovereign Wealth Fund aimed at obtaining funds from foreign investors. The fund aimed to develop the Indonesian economy, especially in the infrastructure sector. In addition, ISWF will be partnered with foreign investors in investing in Indonesia. ISWF will ensure the implementation of good corporate governance for foreign investors in Indonesia. ISWF consists of two boards, namely the Supervisory Board and the Board of Directors. The two boards have different functions. This research aims to determine the application of corporate governance principles for the Indonesian Sovereign Wealth Fund (ISWF). The research used a normative juridical research method. The research concludes that the government needs to review the implementation of the principles of institutional corporate governance in the Indonesian Sovereign Wealth Fund. The principles of corporate governance need to be rearranged, mainly the functions and powers of the Supervisory Board and the definition of the authority of the Board of Directors. It is considered that the research has its particular limitation as the discussion is based only on two laws and one corporate governance manual. It is suggested that further research have more development by comparing corporate governance in other countries.