This study aims to investigate the corporate governance practices on
State-Owned Enterprises (SOEs) and to find out their impacts on the
operating performance of the firms. This study finds out the substantial
improvements of the quality of corporate governance practices in
public-listed Indonesian SOEs. Total corporate governance (CG)
compliance score and each component score show an upward trend
improvement. With regard to the relationship between CG compliance and
operating performance, as represented by Return on Assets, Net Profit
Margin, and Assets Turnover, this study finds out that there is a direct
relationship between the governance quality and operating performance.
This positive relationship is coused by the reduction of the operating
cost and not coused by the increase of sales or the better use of
assets.