• Amin Wibowo Gadjah Mada University, Indonesia
  • Robert Evans Curtin University of Technology
  • Mohammed Quaddus Curtin University of Technology


Despite the growing awareness, in many studies of organisational performance, of the importance of corporate governance, the majority of these studies have been based upon archival data from developed countries with one-tier board systems and have focused on governance structures rather than their performance. This study develops a measure of internal corporate governance based on managersassessment of the extent to which governance processes are effectively enacted. Reporting the responses of a sample of 496 managers of companies in Indonesia, where two tier boards are the norm, the study reveals that effective internal corporate governance mechanisms are only weakly associated with improved organisational performance.


Atkinson, A.A., Waterhouse, J.H. andWells, R.B. (1997) A stakeholder approach to strategic performance measurement. Sloan Management Review, 38(3) pp25-38.

Baird, M. (2000) Transparency and governance. Retrieved:27 September 2004 from,,contentMDK:20060327~menuPK:287094~pagePK:141137~piPK:141127~theSitePK:226309,00.html

Banks, E. (2004) Corporate Governance: Financial Responsibility, Controls and Ethics. Palgrave Macmillan, New York, NY.

Berle, A.A.J.andMeans, G.C. (1932) The Modern Corporation and Private Property. Macmillan, New York, NY.

Bhagat, S. andBlack, B. (1999) The uncertain relationship between board composition and firm performance. The Business Lawyer, 54(3)pp921-63.

Bhagat, S. andBlack, B. (2002) The non-correlation between board independence and long-term firm performance. Journal of Corporation Law, 27(2)pp231-73.

BPK (2007) Ikhtisar Hasil Pemeriksaan Semester II tahun 2006. BPK, Jakarta.

Brennan, N. (2006) Boards ofdirectors and firm performance: Is there an expectation gap? Corporate Governance An International Review, 14(6)pp 577-93.

Calori, R. andSarnin, P. (1991) Corporate culture and economic performance: A French study. Organization Studies, 12(1) pp49-74.Capulong, M.V.,Edwards, D.,Webb, D. and Zhuang, J. (2000)An analytic framework of corporate governance and finance. In M.V. Capulong, D. Edwards, D. Webb and J. Zhuang(eds) Corporate Governance and Finance in East Asia: A Study of Indonesia, Republic of Korea, Malaysia, Philippines, and Thailand. Asian Development Bank,Manila.

Carmeli, A.andTishler, A. (2004) The relationship between intangible organizational elements and organizational performance. Strategic Management Journal, 25pp1257-78.




How to Cite

Wibowo, A. ., Evans, R. . ., & Quaddus, M. . (2009). INTERNAL CORPORATE GOVERNANCE AND ORGANISATIONAL PERFORMANCE: EVIDENCE FROM INDONESIA. The Journal of Contemporary Issues in Business and Government, 15(2), 95–111. Retrieved from