Comparative Analysis of Good Corporate Governance Implementation Based on ASEAN Corporate Governance Scorecard from the Indonesian Banking Industry

The phenomenon of Good Corporate Governance (GCG) implementation in Indonesia is still lagging compared to the other countries in the ASEAN region. For the first time, Indonesia only placed 2 (two) issuers from the banking industry as the ASEAN Top 50 publicly listed companies in the event of Awards and Recognition of Top ASEAN Publicly Listed Companies in 2015. This study aims to analyze significant difference of the GGG implementation among the Top 50 and non-Top 50 ranked banks using ASEAN Corporate Governance Scorecard (ACGS) index and its correlation with the human resources (HR) policies. The data analysis of this study uses descriptive and nonparametric comparative analyses with the Mann-Whitney test method. Despite some limitations, the empiric results showed that there are significant differences in the implementation of the GCG among the Top 50 and non-Top 50 ranked banks as proxied by the total score of the ACGS. On the contrary, there are no significant differences in the HR policies as proxied by the ACGS score on the Role of Stakeholders.


INTRODUCTION
A bank is an institution that functions as an intermediary between parties with excess funds and parties in need of funds, smoothing the flow of payments where its activities aim to improve the standard of living of the people so that banks have an important role in the economy of a country.
Banking management must be carried out carefully so that stakeholders and shareholders can get the maximum benefit. Good management of a bank or company is better known as good corporate governance (GCG). According to Sedarmayanti (2012), good corporate governance is a system, process, and set of regulations that regulate the relationship between various interested parties, especially in the narrow sense, the relationship between shareholders, the board of commissioners and the board of directors for the achievement of organizational goals.
Since Indonesia has undertaken corporate governance reforms through the development of a corporate governance roadmap, the corporate governance framework in Indonesia has moved gradually by adopting best practices. The corporate governance road map was developed based on the principles of the Organization for Economic Co-operation and Development or OECD (2015) regarding the corporate governance framework, protection of shareholder rights, the role of stakeholders, disclosure and transparency, and board responsibilities. The main objective of this road map is as a milestone to improve the implementation of corporate governance practices in Indonesia (ASEAN Corporate Governance Experts, 2017).
Several new regulations and / or amendments to existing regulations have been issued by the Financial Services Authority or the Financial Services Authority (OJK) as a consequence of the road map. A better regulatory framework is needed to meet international standards, such as those set out in the Association of Southeast Asian Nations (ASEAN) Corporate Governance Scorecard (ACGS). To measure improvements in the implementation of corporate governance and how corporate governance reforms have contributed to improved implementation, the ACGS assessment is used (ASEAN Corporate Governance Experts, 2017).
The Financial Services Authority (OJK) assesses that the implementation of GCG in Indonesia in ASEAN region is still lagging behind four countries, namely Thailand, the Philippines, Singapore and Malaysia (OJK, 2017). Based on a report from the Asian Corporate Governance Association or ACGA (2018), Indonesia only ranks 12, with a value of 34, after the Philippines. Knowing this situation, Hadad (2017) as the Chairman of the Board of Commissioners of the OJK from 2015 to 2017 has stated that there are many things need to be considered by today's business world in terms of developing corporate governance. One of them is the development of the quality of human resources (HR). Quality human resources and the application of good GCG principles will ensure business continuity and national economic development.
To measure the quality of human resources, the United Nation Development Program (UNDP) calculates the Human Development Index (HDI) and ranks all countries in the world. Based on the UNPD report (2019), the HDI score for Indonesia is 0.707, ranking 111 out of 189 countries assessed. The same rank is held by the State of Samoa.
Therefore, the development of the quality of human resources is very crucial to be carried out, one of which is by increasing the competence of human resources. The competency factors will shape abilities, skills and knowledge that will affect directly or indirectly the performance of a person in doing work, so that it will further improve the performance of the company's governance.
Based on the aforementioned phenomenon, the authors are interested to conduct further research related to the implementation of GCG and the development of human resources in the organization which is implemented by issuing the human resources (HR) policies. The companies studied were issuers from the banking sector because for the first time since the participation in 2012 (ASEAN Corporate Governance Experts 2017), Indonesia only placed 2 (two) public listed companies (issuers) that were included in the top 50 listed ASEAN-ranked issuers in the event of Awards and Recognition of the Top ASEAN Publicly Listed Companies 2015.
In this study, the authors will further analyze a). Are there any significant differences in the implementation of GCG among the banks that are ranked in the Top 50 and the non-Top 50 of the ACGS? b) Are there any significant differences in the HR policies among the banks that are ranked in the Top 50 and the non-Top 50 of the ACGS?

HYPOTHESES DEVELOPMENT
The agency theory underlies the concept of good corporate governance (GCG). Sutedi (2012) argued that agency theory emphasizes the importance of shareholders to handover company management to the professional so-called agents who have better understanding in running the company's daily business. These professionals are tasked for the interests of company and have the full authority to carry out the management of company, whom in this case act as the agents of the shareholders. He further argued that the corporate governance will provide assurance that the management will perform their best for the interest of the company. Hence, Zarkasy (2019) also concluded that the GCG aims to ensure the management's actions are always directed toward improving the company's sustainable performance.
According to Sedarmayanti (2012), GCG is a system, process and a set of regulations that regulate the relationship between various interested parties, specifically, the relationship between shareholders, the board of commissioners, and the board of directors, which solemnly aim to achieve organizational goals. Meanwhile, according to the OECD (2015), GCG is a structure in which stakeholders, shareholders, commissioners, and managers formulate company goals and mean to achieve these goals and supervise its performance.
One of the GCG's scorecards used in the region is the ASEAN Corporate Governance Score Card (ACGS). The ACGS is a scorecard of the GCG assessment and rating for public companies in ASEAN. This scorecard is a regional initiative from the ASEAN Capital Market Forum (ACMF) in collaboration with the Asian Development Bank (ADB) since 2011 (ASEAN Corporate Governance Experts, 2017). The ACGS framework adopts five GCG principles of the OECD namely, Part A: Rights of Shareholders; Part B: Equitable Treatment of Shareholders; Part C: Role of Stakeholders; Part D: Disclosure and Transparency; and Part E: Responsibilities of the Board.
According to the ASEAN Corporate Governance Experts (2017), "The use of two levels of scoring is designed to better capture the actual implementation of the substance of good corporate governance. Level 1 comprises descriptors or items that are, in essence, indicative of the laws, rules, regulations, and requirements of each ASEAN member state and the basic expectations of the OECD principles. Level 2 consists of bonus items reflecting other emerging good practices and penalty items reflecting actions and events that are indicative of poor governance." Therefore, the ACGS total score used to measure company's implementation of the GCG is the total score of Level 1 and Level 2 which the maximum attainable score is 126 points.
All ASEAN companies scoring above or 75% of the total attainable score will be recognized in alphabetical order (Singapore Institute of Directors, 2019). In 2015, two issuers from the banking industry in Indonesia were successfully ranked in the Top 50 in the ACGS for the first time in ASEAN region. Sulastri et al., (2018) stated in their research that companies who had higher score in ACGS reflects its higher implementation level of the GCG principles. Lukviarman and Johan (2018) stated in their research that higher score of corporate governance perception index (CGPI) measures indicated better implementation of corporate governance practices of a company within its environment. Nurharjanto et al., (2018) stated in their research that corporate governance (CG) index is needed to conduct a valuation of the CG implementation in the company. Wahyudin and Solikhah (2017) stated in their research that the CG rating could improve company's performance. Albeit Setiyawati and Basar (2017) had stated in their study that implementation of the GCG has no effect on company's performance. From such findings therefore, formulation of the hypothesis is as follows: H1: There is a significant difference in implementation of the GCG among the banks that are ranked as Top 50 and non-Top 50 in the ACGS.
According to Sukirno (2017), the HR is defined as people in the organization who contribute thoughts and do various types of work to achieve organizational goals. Martin and Golan (2012) linked the GCG and HR in their study that is after the global financial crisis, the shareholder's value is more in line with the senior leadership, hence the organizational climate and the HR department strategy is much more consistent with the corporate governance regime. In addition, the research conducted by Oyewunmi et al., (2017) has shown that there is an influence of good corporate governance on the HR-related policy outcomes. The GCG should increase the effectiveness of the HR management, so that employee's satisfaction, commitment, loyalty, and bounds will also increase. While Irvan et all., (2017) stated in their research that human resource competencies directly influence positively and significantly related to good governance.
The HR policies are measured from the scores in Items C.3 and C.4 of the ACGS. Item C.3 consists of the role of stakeholders to improve performance, development, and involvement of the employees in the company. Item C.4 consists of the freedom for stakeholders and employees to communicate illegal and unethical practices within the company and is provided with protection for such actions. Therefore, formulation of the hypothesis as follows: H2: There is a significant difference in HR policies among the banks that are ranked as Top 50 and non-Top 50 in the ACGS.

METHOD, DATA, AND ANALYSIS
This study is a quantitative research with comparative research approach. According to Nazir (2017), comparative research is a type of descriptive research that seeks to find answers fundamentally about cause-and-effect, by analyzing the factors that cause the occurrence or appearance of a certain phenomenon. While, according to Sugiyono (2014) a comparative research is a research that compares conditions of one or more variables within two or more different samples, or within two different times.
The population in this study is fifteen (15) issuers from the Indonesian banking industry who participated in the ACGS. The two (2) (1) year recent participation. This study uses saturated sampling technique. Saturated sampling uses all populations as the sample. Hence the total sample is fifteen (15) issuers within the total time-series observations of forty-three (43) all together.
This study uses archival data collection technique, in the form of secondary data which were obtained with the permission of the Indonesian Institute for Corporate Directorship (IICD). IICD is a non-profit organization appointed by the OJK as the Domestic Ranking Body of the ASEAN Corporate Governance Scorecard (ACGS) in Indonesia from 2013 to 2015 (IICD, 2015).
The data analysis in this study uses descriptive and nonparametric comparative analyses utilizing the Mann-Whitney test method. The Mann-Whitney test is used if the data are not normally distributed on two unrelated samples. For this study, the sample size is fifteen (15) issuers that are not related to each other, so the data is expected not distributed normally.
According to Sujarweni (2015), the decision making for the results using Mann-Whitney's parameters t o test the hypothesis a r e a s f o l l o w : a . ) I f t he value of α <0.05, then, there are differences between the two groups; b.) If the value of α >0.05 then, there are no differences between the two groups.

RESULTS
The results of descriptive statistics analysis for implementation of the GCG among the banks that are ranked as Top 50 and non-Top 50 in the ACGS are summarized in the graph as follows: Total ACGS score for the GCG implementation of the Top 50 has a minimum value equal to 99.97, maximum value equal to 103.15, average value equal to 101.56 and standard deviation value equal to 2.25. The minimum total ACGS score of 99.97 was achieved by PT Bank CIMB Niaga, Tbk. in 2015, while the highest t o t a l score was achieved by PT Bank Danamon Indonesia, Tbk. a l s o in 2015. The average of 101.56 indicates a high ACGS score. While the standard deviation value of 2.25 indicates a relatively small data deviation because it is smaller than its average value.
Total ACGS score for the GCG implementation of the non-Top 50 has a minimum value equal to 51.75 maximum value equal to 92.2, average value equal to 75.75 and standard deviation value equal to 9.9. The minimum total ACGS score of 51.73 was achieved by PT Bank Mega Tbk. in 2014, while the maximum total score was achieved by PT Bank Tabungan Negara (Persero) Tbk. in 2015. The average of 75.75 indicates a medium ACGS score. While the standard deviation value of 9.9 showed that the data deviation is relatively small, because it is smaller than its average value.
The results of descriptive statistics analysis for the HR policies among the banks that are ranked as Top 50 and non-Top 50 in the ACGS are summarized in the graph as follows: The average of 2.54 indicates a high ACGS score for the HR policies. While, the standard deviation value of 0.67 showed that the data deviation is relatively small, because it is smaller than its average value.
The following table summarizes the output of comparative analyses using the Mann-Whitney test on the total score of the ACGS for implementation of the GCG among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS: Based on Man-Whitney test result using SPSS software for total score of the ACGS shows the Man-Whitney's coefficient is equal to 0 with significance value equal to 0.018. Since significance value of α(0.018) <0.05 therefore, it can be concluded that there is significant difference in the implementation of the GCG among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS. Therefore, the hypothesis H1 is accepted and empirically proven.
The table also summarizes the test results for each part of the ACGS as follows: Part A: Significance value of α(0.040) <0.05 therefore, there is significant difference in the right of shareholder among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.
Part B: Significance value of α(0.024) <0.05 therefore, there is significant difference in the equitable treatment of shareholder among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.
Part C: Significance value of α(0.054) >0.05 therefore, there is no significant difference in the role of stakeholders among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.
Part D: Significance value of α(0.018) <0.05 therefore, there is significant difference in the disclosure and transparency among the banks that are ranked a s t h e T o p 5 0 a n d t h e n o n -T o p 5 0 in the ACGS.
Part E: Significance value of α(0.019) <0.05 therefore, there is significant difference in the responsibility of the boards among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.
Notwithstanding, there is no significant difference in Part C, the Man-Whitney test result for total score of Level 1 has significance value of α(0.018) <0.05 therefore, there is significant difference in the total scores from Part A to Part E among banks that are Also, the Man-Whitney test result for total score of Level 2 of the ACGS shows significance value of α(0.047) <0.05 therefore, there is significant difference in the total scores Bonus and Penalty among banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.

Governance (GCG) ACGS Scores Per-Parts
In summary, the test result of total score Level 1 and Level 2 is equal to final total score of the ACGS has theref ore, shown a significant difference o n the implementation of the GCG among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.
The following table summarizes the output of comparative analyses using the Mann-Whitney test on the total score of Item C.3 and Item C.4 of the ACGS for the HR policy of the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS: Based on Man-Whitney's test result using SPSS software for the total score of Item C.3 and Item C.4 of the ACGS shows Man-Whitney's coefficient is equal to 10 with significance value equal to 0.066. Since significance value of α(0.066) >0.05 therefore, it can be concluded that there is no significant difference in the HR policy among the banks that are ranked in Top 50 and non-Top 50 in the ACGS. Therefore, the hypothesis H2 is rejected and empirically not proven.
The table also summarizes the test results for each Items C . 3 a n d C . 4 o f the ACGS as follows: Item C.3.1: Significance value of α(0.461) >0.05 therefore, there is no significant difference in the HR policy of disclosing the health, safety, and welfare for the employees among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS. Item C.4.1: Significance value of α(0.647) >0.05 therefore, there is no significant difference in the HR policy on procedures for complaints by employees concerning illegal (including corruption) and unethical behaviors among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.
Lastly, Item C.4.2: Significance value of α(0.528) >0.05 therefore, there is no significant difference in the HR policy on policy or procedures to protect an employee or person who reveals illegal or unethical behaviors from retaliation among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.
In summary, the test result of total score from Items C.3.1 to I t e m C.4.2 of the ACGS has shown no significant difference in the HR policy among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS.

DISCUSSION
In principal, the good corporate governance (GCG) will provide assurance that the management will perform their best for the interest of the company (Sutedi, 2012) and to improve its sustainable performance (Zarkasy, 2019). This research has empirically proven that the banks ranked a s t h e Top 50 i n t h e A C G S s h o w e d b e t t e r p e r f o r ma n c e i n the GCG implementation compared to t h o s e a r e t h e non-Top 50 banks. Such significant differences are proxied by the total score of the ACGS with an indication of the significance value of (0.018) <0.05. It is understood that the banks are ranks the Top 50 in the ACGS had high scores with an average value of 101.56, while the non-Top50 banks had scores in the medium category with an average value of 75.54. The minimum ACGS score for banks that are in the Top 50 is, achieved by PT Bank CIMB Niaga, Tbk. in 2015, while the maximum value achieved by PT Bank Danamon Indonesia, Tbk. also, in 2015. The average scores of the non-Top 50 banks are lower than the Top 50 banks in the ACGS. Thus, the banks ranked as the Top 50 in the ACGS are better in implementing the GCG compared to the non-Top 50 banks, amid there is no significant difference in the role of stakeholders.
Therefore, if the r e s u l t o f t h e ACGS scores is ranked per P arts then this study has empirically proven that the banks ranked as the Top 50 in the ACGS are significantly better at implementing the GCG compared to the non-Top 50 banks in the following orders namely, Part D -Disclosure and Transparency; Part E -Responsibilities of the Board; Part B -Equitable Treatment of Shareholders; and Part A -Rights of Shareholders. Only in Part C that is the Role of Stakeholders where the HR policy is included in it has shown no significant difference among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS. Hence this finding in Part C reinforces the result of previous research by Setiyawati and Basar (2017) which stated that the implementation of the GCG has no effect on company's performance (proxied by profitability).
Nevertheless, this research empirically strengthens the results of previous studies conducted by Sulastri, et. al., (2018) which stated that companies with high ACGS scores reflect the high implementation of the GCG a nd i s e c h o e d by Lukviarman and Johan (2018) which stated that higher score of CGPI measures indicated better implementation of corporate governance practices of a company within its environment hence also reinforces the research by Nurharjanto et. al., (2018) which stated that a corporate governance (CG) index is needed to conduct a valuation of the CG implementation in the company and is echoed by Wahyudin and Solikhah (2017) which stated that the CG rating could improve company's performance.
On the contrary, the results of this study has empirically proven that there is no significant difference in the HR policies among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS, with an indication of a significance value of (0.066)> 0.05. The ACGS score of the HR policies of th e Top 50 banks had an average score of 3.33 which is the maximum score, while the non-Top 50 banks had an average score of 2.54, indicating a high ACGS score of the HR policy as well.
In general, Part C-Role of the Stakeholders, which includes the HR policy in it, shows that there is no significant difference in terms of performance improvement, development, and employee involvement in the company as well as in the freedom to communicate illegal or unethical practices that occur in the company. This is understandable because the banking sector is a highly regulated industry. Therefore, the HR policies at the staffing level among the banks that are ranked a s t h e Top 50 and the non-Top 50 are strictly governed by the regulations issued by the OJK that is to have the same standards and level of service agreement to prudently serve their clients.
If the ACGS scores of Items C.3 and C.4 are individually ranked, the results of this study empirically has proven that there is no significant difference in the HR policies among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS in the following orders namely, Item C.3.2 -Publication of data on occupational health, safety, and welfare for its employees; Item C.3.5 -Compensation and reward policy based on company performance beyond the short-term financial measure; Item C.3.1 -Explicit disclosure of occupational health, safety policies and welfare for its employees; Item C.4.2 -Policies or procedures to protect employees or persons who disclose suspected illegal or unethical behavior without any form of retaliation; Item C.4.1 -Whistleblowing policy which includes procedures for complaints by employees and other stakeholders regarding suspected illegal and unethical behavior; Item C.3.4 -Publication of data on training programs and employee development; and lastly, Item C.3.3 -Training and development programs for its employees Although this research did not empirically prove a significant difference in the HR policies at the staffing level among the banks that are ranked as t h e Top 50 and t h e non-Top 50 in the ACGS which are proxied by the result of the ACGS scores Items C.3 and C.4 however, the results of this study relevance with previous study by Shabi, et al., (2014) which stated that effective corporate governance is all about the Board's performance. In order for the Board of Commissioners and the Board of Directors to function effectively, the members of the Boards must consist of people who are independent, talented, having a wide range of knowledge, experienced, and possess multiple perspectives in determining the GCG-based company policies.
Thus, o n e o f t h e underlying phenomenon q u e s t i o n s of this s t u d y might still be relevant t h a t there is a significant difference in the HR policy among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS. Amid i t i s a t the level of the Boards as proxied by the result of the ACGS score Part E.

Conclusion
Based on the results of the analysis and testing of research hypotheses presented in the aforementioned discussions, we come to the conclusions for this study are as follows: (1) There is a significant difference in the implementation of the GCG among the banks that are ranked as t h e Top 50 and t h e non-Top 50 in the ACGS; (2) There is no significant difference in the HR policies at the staffing level among the banks that are ranked as the Top 50 and the non-Top 50 in the ACGS. However, the determination of vision and mission of the HR policies at the level of the Board of Commissioners and Directors has a significant impact on the implementation of the GCG.

Limitation and Suggestions
In conducting this research, the authors have several limitations that may be explored in future research. Those limitations are as follows: 1.