Examining Participatory-based on Share Ownership and Management in the Bank Pembangunan Daerah as Limited Liability Companies

Abstract

The Good Corporate Governance principle of limited company is required to increase the confidence, support, and participation of stakeholders or all parties concerned with the company. As it turns out in practice, however, it has certain weaknesses, particularly in view of the accountability and legitimacy aspects of its establishment. This research is an empirical legal research in examining participatory-based on share ownership and management in Bank Pembangunan Daerah (BPD) as limited liability companies. The outcomes of the research indicate that the essence of participatory share ownership and management in the BPD is not directly owned by the shareholders. Proof of ownership for the depositor is only obtained from the Cooperative that the person concerned has a nominal share deposit in the form of a certificate containing the amount of the nominal value of the ownership. Normatively, legal protection for share ownership and management is participatory based, in principle, shares that are protected under the name of Cooperatives are classified as legal protection for minority shares, while employees who de facto as depositors of nominal shares are not well protected by law. Hence, to provide legal protection and certainty to participatory share nominal depositors, there must be binding rules between the parties as outlined in the provision of fund management (management regulation) on the terms of participation.

Keywords: Good Corporate Governance, Limited Company, Local Government