FIT AND PROPER TEST: A DETERMINANT OF GOOD CORPORATE GOVERNANCE BANKING INDUSTRY IN INDONESIA

Abstract

This study aims to identify the determinants and effectiveness of good corporate governance
(GCG) practices in Indonesia banks.This study used verification method based on some
theories. The analysis technique used the presentation of descriptive statistics and the
Structural Equation Model (SEM) for factor analysis and calculation.The results showed that
there are weaknesses in upholding the principles of good corporate governance (GCG) in
Indonesian banking related to aspects of leadership and business areas. The implementation
of good corporate governance (GCG) in banking sector is very essential to build the trust of
society and international world as an absolute requirement to ensure the soundness of the
financial institutions.This research using of fit and proper test as a moderate variable and
determinant in enhancement the implementation of good corporate governance (GCG) for
Indonesia banking industry.