Governance (indonesia: Tata Kelola). The term of governance usually closely related with collussion (corruption). It start with the public company that listed in stock exchange, the scandal such as Enron, influence the use of this term.
Governance is technically a made up word, basically it is a way of power distribution. When company listed, their power should be shifted in public money. So it is required an accountability.
Governance works effectively in financial institution, because when we do financial transaction we are directly have transfer the risk to other party.
Governance as disclosure (audit/control/risk), it is an old business of accounting firm. Financial report need to be reviewed as it process transparency and accountability. It is about finding (challenge the game)
Governance as process, it covers bigger aspects such as roles & responsibility, process interaction, policy and procedure. It is about designing power distribution. (design the game)
The economy history of Indonesia can be seen as governance transition. Here is the example:
The period of 1800-1899 of Indonesia can be divided by three phase:
- 1800 Dutch Colonial State (Daendels & Raffles)
- 1830 Cultivation (by 1850 Javanese & Chinese enterpreneurs involved, Bosch)
- 1870 Liberalization (private capitalism, train 1867, coal steamer 1869)
The period of 1900-1999 can be divided by three phase:
- 1900 Nationalism
- 1942 Japanese Invasion
- 1966 New Order (66-73 stabilization, 74-82 oil booms, 93-96 post-oil boom)
The period of 2000-2099 can be divided by three phase:
- 2000 Reformation
- 2030 ?