The Role of Good Corporate Governance Banking Sector in Supporting Risk Management Principles as the Implementation of Prudential

Abstract

Implementation of good corporate governance in the banking industry should always be based on five basic principles. First, transparency, namely openness in expressing material information and relevant as well as transparency in the decision making process. Second, accountability, the clarity of the functions and the implementation of the accountability organ bank that effective management. Third, accountability  that the suitability of the bank management with the legislation in force and the principles of management of healthy banks. Fourth, independence that bank management in a professional manner with no influence / pressure from any party. Fifth, fairness, namely justice and equality in meeting stakeholder rights arising under the agreement and the legislation in force. In order to establish the five basic principles mentioned above, the bank shall be guided by the various regulations and minimum requirements and guidelines related to the implementation of good corporate governance).

Key Words: Good corporate governance, risk management, precautionary principle