The Implementation of Good Corporate Governance in Maintaining Financial Stability at Perumda BPR Bank Kota Kediri
Main Article Content
Popy Setyaningrum*
The implementation of Good Corporate Governance (GCG) is considered a crucial mechanism for ensuring transparency, accountability, and sustainability in financial institutions, including regionally owned rural banks (BPRs). However, challenges related to governance practices, political intervention, and organizational capacity often affect the effectiveness of GCG in maintaining financial stability. This study aims to analyze the implementation of Good Corporate Governance (GCG) and its impact on financial stability at Perumda BPR Bank Kota Kediri. This qualitative study using a case study approach collected data through in-depth interviews with board of commissioners, directors, internal auditors, and external parties, as well as analysis of internal financial reports. The results show that the implementation of the five GCG principles which are transparency, accountability, responsibility, independence, and fairness remains formal and not yet fully substantive. Key obstacles include local government ownership structure leading to intervention, limited Human Resources (HR) capacity, hierarchical organizational culture, and suboptimal information technology systems. The impact of suboptimal GCG implementation on financial stability is reflected in the still high non-performing loan (NPL) ratio, although it shows an improving trend from 45% (2019) to 23.49% (2023). Other indicators such as Return on Assets (ROA) and operational efficiency (BOPO) also show positive improvement. The conclusion emphasizes that the effectiveness of GCG in maintaining the financial stability of regionally-owned BPRs highly depends on internalizing governance principles into the organizational culture and reducing political intervention, in addition to complying with the formal structures set by the Financial Services Authority (OJK) regulations.
Altaf, K., Ayub, H., Shabbir, M. S., & Usman, M. (2022). Do operational risk and corporate governance affect the banking industry of Pakistan? Review of Economics and Political Science, 7(2), 108–123. https://doi.org/10.1108/REPS-12-2019-0156
Anginer, D., Demirguc-Kunt, A., Huizinga, H., & Ma, K. (2018). Corporate governance of banks and financial stability. Journal of Financial Economics, 130(2), 327–346. https://doi.org/10.1016/j.jfineco.2018.06.011
Aslam, E., & Haron, R. (2020). Does corporate governance affect the performance of Islamic banks? New insight into Islamic countries. Corporate Governance: The International Journal of Business in Society, 20(6), 1073–1090. https://doi.org/10.1108/CG-11-2019-0350
Awaliah, D., & Sembiring, F. M. (2025). The Effect of Good Corporate Governance and Leverage on Company Value Moderated by Profitability in the Coal Sub-Sector. Journal of International Accounting, Taxation and Information Systems, 2(4), 446–457. https://doi.org/10.70865/jiatis.v2i4.134
BangsaOnline. (2020). Tuntut Direktur Diganti, Karyawan PD BPR Mogok Kerja. BangsaOnline. https://www.bangsaonline.com/berita/67362
Bastomi, M., Salim, U., & Aisjah, S. (2017). The Role of Corporate Governance and Risk Management on Banking Financial Performance in Indonesia. Jurnal Keuangan Dan Perbankan, 21(4), 589–599. https://doi.org/10.26905/jkdp.v21i4.1285
Bhagat, S., Bolton, B. J., & Subramanian, A. (2010). CEO education, CEO turnover, and firm performance. Available at SSRN 1670219. https://doi.org/10.2139/ssrn.1670219
Bhatia, M., & Gulati, R. (2021). Board governance and bank performance: A meta-analysis. Research in International Business and Finance, 58, 101425. https://doi.org/10.1016/j.ribaf.2021.101425
Boubaker, S., & Elnahass, M. (2024). Banking Resilience: New Insights on Corporate Governance, Sustainability and Digital Innovation (Vol. 9). World Scientific. https://doi.org/10.1142/q0421
Chasanah, U., Oktafiah, Y., & Rakhmawati, D. L. (2025). The Influence of Good Corporate Governance and Corporate Social Responsibility on Investment Risk: A Case Study of PT Sariguna Primatirta Tbk (CLEO) Listed on IDX in 2020–2023. Journal of Economic Equity, Finance, and Taxation, 1(3), 108–115. https://doi.org/10.70865/jeeft.v1i3.97
Crabtree, B. F., & Miller, W. L. (2025). Doing Qualitative Research. Sage Publication.
Duta.co. (2020). Penjelasan Direktur BPR Terkait Utang dan Mutasi. Duta.Co. https://duta.co/ini-penjelasan-direktur-bpr-kota-kediri
Ekadjaja, A., & Ekadjaja, M. (2020). Tata Kelola Perusahaan, Risiko Keuangan, dan Kinerja Perbankan di Indonesia. Jurnal Ekonomi, 25(3), 391–412. https://doi.org/10.24912/je.v25i3.687
Endah, N., Tarjo, T., & Musyarofah, S. (2020). The implementation of good corporate governance and efforts to prevent fraud in banking companies. Jurnal Reviu Akuntansi Dan Keuangan, 10(1), 136–149. https://doi.org/10.22219/jrak.v10i1.10268
Fernandes, C., Farinha, J., Martins, F. V., & Mateus, C. (2018). Bank governance and performance: A survey of the literature. Journal of Banking Regulation, 19(3), 236–256. https://doi.org/10.1057/s41261-017-0045-0
Iramani, R. R., Muazaroh, M., & Mongid, A. (2018). Positive contribution of the good corporate governance rating to stability and performance: Evidence from Indonesia. Problems and Perspectives in Management, 16(2), 1–11. https://doi.org/10.21511/ppm.16(2).2018.01
Irchani, E., Wibowo, E., & Astuti, D. S. P. (2025). Analysis of Capital Structure and Non Performing Loans on Financial Performance in the Activity Management Unit (UPK) of Boyolali District in 2022-2023. Journal of International Accounting, Taxation and Information Systems, 2(1), 93–112. https://doi.org/10.70865/jiatis.v2i1.97
Jannah, S. F. (2016). Pengaruh Good Corporate Governance Terhadap Pencegahan Fraud Di Bank Perkreditan Rakyat (Studi Pada Bank Perkreditan Rakyat Di Surabaya). AKRUAL: Jurnal Akuntansi, 7(2), 200–213. https://doi.org/10.26740/jaj.v7n2.p178-191
Kafidipe, A., Uwalomwa, U., Dahunsi, O., & Okeme, F. O. (2021). Corporate governance, risk management and financial performance of listed deposit money bank in Nigeria. Cogent Business & Management, 8(1), 1888679. https://doi.org/10.1080/23311975.2021.1888679
Karyani, E., Dewo, S. A., Santoso, W., & Frensidy, B. (2020). Risk governance and bank profitability in ASEAN-5: a comparative and empirical study. International Journal of Emerging Markets, 15(5), 949–969. https://doi.org/10.1108/IJOEM-03-2018-0132
Kediripost. (2020). NPL Tembus 45 Persen, Perumda BPR Bank Kota Kediri Terancam Bangkrut. Kediripost. https://kediripost.co.id/npl-tembus-diangka-45-persen-pd-bpr-kota-kediri-terancam-bangkrut
Kompas. (2012). Kasus Dugaan Korupsi di Kediri. Kompas.Com. https://nasional.kompas.com/read/2012/07/03/20100539/regionaljawa
Lassoued, M. (2018). Corporate governance and financial stability in Islamic banking. Managerial Finance, 44(5), 524–539. https://doi.org/10.1108/MF-12-2016-0370
Magnan, M., & Michelon, G. (2024). Corporate governance and corporate social responsibility: A continuity perspective. In Handbook on Corporate Governance and Corporate Social Responsibility (pp. 12–23). Edward Elgar Publishing. https://doi.org/10.4337/9781802208771.00011
Musah, A., & Adutwumwaa, M. Y. (2021). The effect of corporate governance on financial performance of rural banks in Ghana. International Journal of Financial, Accounting, and Management, 2(4), 305–319. https://doi.org/10.35912/ijfam.v2i4.336
Nugroho, A. R., & Muharam, H. (2023). The Influence of Net Interest Margin, Bank Size, Bank Age, Non-Performing Loan, LDR, and GCG on the Risk of Misconduct With Real GDP as a Moderation: Case Study of Conventional Commercial Banks 2014–2021. SIBATIK JOURNAL: Jurnal Ilmiah Bidang Sosial, Ekonomi, Budaya, Teknologi, Dan Pendidikan, 2(12), 3763–3784. https://doi.org/10.54443/sibatik.v2i12.1522
Oteng-Abayie, E. F., Affram, A., & Mensah, H. K. (2018). Corporate governance and efficiency of rural and community banks (RCBs) in Ghana. Econometric Research in Finance, 3(2), 93–118. https://doi.org/10.33119/ERFIN.2018.3.2.2
Permatasari, I. (2020). Does corporate governance affect bank risk management? Case study of Indonesian banks. International Trade, Politics and Development, 4(2), 127–139. https://doi.org/10.1108/ITPD-05-2020-0063
RadarKediri. (2021). Kasus Korupsi: Pencairan Tanpa Persetujuan Dewas. RadarKediri. https://radarkediri.jawapos.com/hukum-kriminal/781287744/kasus-korupsi-bpr-kota-kediri-pencairan-tanpa-persetujuan-dewas
Srivastav, A., & Hagendorff, J. (2016). Corporate Governance and Bank Risk-taking. Corporate Governance: An International Review, 24(3), 334–345. https://doi.org/10.1111/corg.12133
Tabassum, N., & Singh, S. (2020). Corporate Governance and Organisational Performance. Springer.
Ullah, S., Hanif, M. N., & Nobanee, H. (2023). Corporate governance, credit risk and financial soundness of banks. Intellectual Economics, 17(2), 362–383. https://doi.org/10.13165/ie-23-17-2-06
Wali, K., van Paridon, K., & Darwish, B. K. (2023). Strengthening banking sector governance: challenges and solutions. Future Business Journal, 9(1), 95. https://doi.org/https://link.springer.com/article/10.1186/s43093-023-00279-0
Yin, R. K. (2018). Case study research and applications (6th ed.). Sage Thousand Oaks, CA.
