Exploring Stakeholder Engagement Governance Practices in the State Owned Enterprises

Abstract

This study explores and assesses the implementation of governance practices related to stakeholder engagement governance at PT. Industri Kapal Indonesia (IKI) and PT. Semen Tonasa. Both companies are State-Owned Enterprises (SOE) located in South Sulawesi, Indonesia. The purpose of this study is to identify best practices in the implementation of governance in the SOE. The maturity level of the implementation of stakeholder engagement governance is also explored. The multiple case study method used in this study covers two companies observed. The qualitative data obtained were then analyzed by assessing the level of implementation. Several findings are revealed in this study. First, the governance of stakeholder engagement practices in PT. IKI is still at a basic level, while in PT. Semen Tonasa is in the leadership level. Second, stakeholder mapping conducted by both companies provide positive results in managing stakeholder engagement. In addition, standards and procedures for communicating with stakeholders, complaint mechanisms, and external communication mechanisms for affected communities are identified as an important practice in this study. However, there are several facts that need to pay more attention, for instance employees are given confidential and direct access to independent board member to raise complaints with the company in order to improve the quality of stakeholder engagement governance. Various other factors that potentially arise in the practice of the stakeholder engagement governance in SOEs, such as company commitment to the environment, social, and governance, requires further exploration in the future.