The political economy of Indonesia’s large-scale industrial structure is two-fold: business
groups of allied firms under common control, typically by family-based (and frequently) founding
owners; and state-owned enterprises. While beyond the scope of this paper, it should be stressed
that the implementation of good corporate governance rules and practices for state enterprises is
at least as important as for private listed companies. Because of their central importance,
business-group corporate governance issues will be raised throughout this paper.