IDEAS home Printed from https://ideas.repec.org/a/pal/jbkreg/v22y2021i3d10.1057_s41261-020-00140-2.html
   My bibliography  Save this article

The stakeholder model: its relevance, concept, and application in the Indonesian banking sector

Author

Listed:
  • Yafet Yosafet Wilben Rissy

    (Satya Wacana Christian University)

Abstract

This article examines the current Indonesian Financial Service Authority (IFSA) regulations on corporate governance that deal with the relevance, concept, and application of the stakeholder model in the Indonesian banking sector. This study shows that the current IFSA regulations on corporate governance in the Indonesian banking sector encourage the application of the stakeholder model. However, they contain a vague definition of a stakeholder, fail to properly identify the legitimate stakeholders of the Indonesian banking sector, and provide no principles that can be used to align bank stakeholders’ interests. IFSA should revise these regulations so that they are more compatible with the theoretical basis and international best practices. This can be done through providing a concise definition of the concept of a stakeholder and offering normative and practical principles to be used when identifying the Indonesian banking sector legitimate stakeholders and aligning stakeholders’ interests.

Suggested Citation

  • Yafet Yosafet Wilben Rissy, 2021. "The stakeholder model: its relevance, concept, and application in the Indonesian banking sector," Journal of Banking Regulation, Palgrave Macmillan, vol. 22(3), pages 219-231, September.
    • Handle: RePEc:pal:jbkreg:v:22:y:2021:i:3:d:10.1057_s41261-020-00140-2
    DOI: 10.1057/s41261-020-00140-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41261-020-00140-2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41261-020-00140-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. R. Edward Freeman, 2010. "Managing for Stakeholders: Trade-offs or Value Creation," Journal of Business Ethics, Springer, vol. 96(1), pages 7-9, August.
    2. Thankom Gopinath Arun & John Turner, 2009. "Corporate Governance and Development: Reform, Financial Systems and Legal Framework – An Overview," Chapters, in: Thankom Gopinath Arun & John Turner (ed.), Corporate Governance and Development, chapter 1, Edward Elgar Publishing.
    3. Michael Carney, 2005. "Corporate Governance and Competitive Advantage in Family–Controlled Firms," Entrepreneurship Theory and Practice, , vol. 29(3), pages 249-265, May.
    4. Astrid Rudyanto & Sylvia Veronica Siregar, 2018. "The effect of stakeholder pressure and corporate governance on the sustainability report quality," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 34(2), pages 233-249, May.
    5. Preston, Lee E. & Sapienza, Harry J., 1990. "Stakeholder management and corporate performance," Journal of Behavioral Economics, Elsevier, vol. 19(4), pages 361-375.
    6. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    7. Donaldson, Thomas & Dunfee, Thomas W., 1995. "Integrative Social Contracts Theory," Economics and Philosophy, Cambridge University Press, vol. 11(1), pages 85-112, April.
    8. Anant K. Sundaram & Andrew C. Inkpen, 2004. "The Corporate Objective Revisited," Organization Science, INFORMS, vol. 15(3), pages 350-363, June.
    9. Charles W. L. Hill & Thomas M. Jones, 1992. "Stakeholder‐Agency Theory," Journal of Management Studies, Wiley Blackwell, vol. 29(2), pages 131-154, March.
    10. Langtry, Bruce, 1994. "Stakeholders and the Moral Responsibilities of Business," Business Ethics Quarterly, Cambridge University Press, vol. 4(4), pages 431-443, October.
    11. Stijn Claessens & Joseph P. H. Fan, 2002. "Corporate Governance in Asia: A Survey," International Review of Finance, International Review of Finance Ltd., vol. 3(2), pages 71-103, June.
    12. Phillips, Robert & Freeman, R. Edward & Wicks, Andrew C., 2003. "What Stakeholder Theory is Not," Business Ethics Quarterly, Cambridge University Press, vol. 13(4), pages 479-502, October.
    13. Thankom Gopinath Arun & John Turner (ed.), 2009. "Corporate Governance and Development," Books, Edward Elgar Publishing, number 13485.
    14. Burton, Brian K. & Dunn, Craig P., 1996. "Feminist Ethics as Moral Grounding for Stakeholder Theory 1," Business Ethics Quarterly, Cambridge University Press, vol. 6(2), pages 133-147, April.
    15. Michael N. Young & Mike W. Peng & David Ahlstrom & Garry D. Bruton & Yi Jiang, 2008. "Corporate Governance in Emerging Economies: A Review of the Principal–Principal Perspective," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 196-220, January.
    16. Phillips, Robert, 2003. "Stakeholder Legitimacy," Business Ethics Quarterly, Cambridge University Press, vol. 13(1), pages 25-41, January.
    17. Phillips, Robert A., 1997. "Stakeholder Theory and A Principle of Fairness," Business Ethics Quarterly, Cambridge University Press, vol. 7(1), pages 51-66, January.
    18. Freeman, R. Edward, 1994. "The Politics of Stakeholder Theory: Some Future Directions1," Business Ethics Quarterly, Cambridge University Press, vol. 4(4), pages 409-421, October.
    19. Denis, Diane K. & McConnell, John J., 2003. "International Corporate Governance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(1), pages 1-36, March.
    20. Yafet Yosafet Wilben Rissy, 2019. "Corporate Governance in People’s Credit Banks in Indonesia: A Challenge for a Better Future," CSR, Sustainability, Ethics & Governance, in: René Schmidpeter & Nicholas Capaldi & Samuel O. Idowu & Anika Stürenberg Herrera (ed.), International Dimensions of Sustainable Management, pages 163-198, Springer.
    21. Dunfee, Thomas W. & Donaldson, Thomas, 1995. "Contractarian Business Ethics: Current Status and Next Steps," Business Ethics Quarterly, Cambridge University Press, vol. 5(2), pages 173-186, April.
    22. Edward Freeman, R. & Phillips, Robert A., 2002. "Stakeholder Theory: A Libertarian Defense," Business Ethics Quarterly, Cambridge University Press, vol. 12(3), pages 331-349, July.
    23. Steven Radelet & Jeffrey Sachs, 2000. "The Onset of the East Asian Financial Crisis," NBER Chapters, in: Currency Crises, pages 105-153, National Bureau of Economic Research, Inc.
    24. Hendry, John, 2001. "Missing the Target: Normative Stakeholder Theory and the Corporate Governance Debate," Business Ethics Quarterly, Cambridge University Press, vol. 11(1), pages 159-176, January.
    25. R. Edward Freeman & Andrew C. Wicks & Bidhan Parmar, 2004. "Stakeholder Theory and “The Corporate Objective Revisited”," Organization Science, INFORMS, vol. 15(3), pages 364-369, June.
    26. Wicks, Andrew C. & Gilbert, Daniel R. & Freeman, R. Edward, 1994. "A Feminist Reinterpretation of The Stakeholder Concept," Business Ethics Quarterly, Cambridge University Press, vol. 4(4), pages 475-497, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Allen Kaufman & Ernie Englander, 2011. "Behavioral Economics, Federalism, and the Triumph of Stakeholder Theory," Journal of Business Ethics, Springer, vol. 102(3), pages 421-438, September.
    2. Samantha Miles, 2017. "Stakeholder Theory Classification: A Theoretical and Empirical Evaluation of Definitions," Journal of Business Ethics, Springer, vol. 142(3), pages 437-459, May.
    3. Y. Fassin, 2008. "The Stakeholder Model Refined," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/529, Ghent University, Faculty of Economics and Business Administration.
    4. Samantha Miles, 2012. "Stakeholder: Essentially Contested or Just Confused?," Journal of Business Ethics, Springer, vol. 108(3), pages 285-298, July.
    5. Cedric Dawkins, 2014. "The Principle of Good Faith: Toward Substantive Stakeholder Engagement," Journal of Business Ethics, Springer, vol. 121(2), pages 283-295, May.
    6. Sefa Hayibor, 2017. "Is Fair Treatment Enough? Augmenting the Fairness-Based Perspective on Stakeholder Behaviour," Journal of Business Ethics, Springer, vol. 140(1), pages 43-64, January.
    7. Yves Fassin, 2012. "Stakeholder Management, Reciprocity and Stakeholder Responsibility," Journal of Business Ethics, Springer, vol. 109(1), pages 83-96, August.
    8. repec:eme:srjpps:v:6:y:2010:i:2:p:381-392 is not listed on IDEAS
    9. Nicolae Al. Pop & Steluta Todea & Cristina-Veronica Partenie & Cristina Ott, 2020. "Stakeholders’ Perception Regarding Sustainable Universities," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 22(54), pages 330-330, April.
    10. Silvana Signori & Gianfranco Rusconi, 2009. "Ethical Thinking in Traditional Italian Economia Aziendale and the Stakeholder Management Theory: The Search for Possible Interactions," Journal of Business Ethics, Springer, vol. 89(3), pages 303-318, November.
    11. Silke Machold & Pervaiz Ahmed & Stuart Farquhar, 2008. "Corporate Governance and Ethics: A Feminist Perspective," Journal of Business Ethics, Springer, vol. 81(3), pages 665-678, September.
    12. Brink, Alexander, 2011. "Spezifische Investitionen als Legitimationsgrundlage für Stakeholderansprüche," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 65(1), pages 50-68.
    13. Alejandra Marin & Ronald Mitchell & Jae Lee, 2015. "The Vulnerability and Strength Duality in Ethnic Business: A Model of Stakeholder Salience and Social Capital," Journal of Business Ethics, Springer, vol. 130(2), pages 271-289, August.
    14. Tommy Jensen & Johan Sandström, 2013. "In Defence of Stakeholder Pragmatism," Journal of Business Ethics, Springer, vol. 114(2), pages 225-237, May.
    15. Lauren Purnell & R. Freeman, 2012. "Stakeholder Theory, Fact/Value Dichotomy, and the Normative Core: How Wall Street Stops the Ethics Conversation," Journal of Business Ethics, Springer, vol. 109(1), pages 109-116, August.
    16. Lamin B. Ceesay, 2020. "Exploring the Influence of NGOs in Corporate Sustainability Adoption: Institutional-Legitimacy Perspective," Jindal Journal of Business Research, , vol. 9(2), pages 135-147, December.
    17. Valentinov, Vladislav, 2023. "Stakeholder theory: Toward a classical institutional economics perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 188(1), pages 75-88.
    18. Ayman Hassan Bazhair & Mohammed Naif Alshareef, 2022. "Dynamic relationship between ownership structure and financial performance: a Saudi experience," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2098636-209, December.
    19. Jill Brown & William Forster, 2013. "CSR and Stakeholder Theory: A Tale of Adam Smith," Journal of Business Ethics, Springer, vol. 112(2), pages 301-312, January.
    20. Andre Leonardo Pruner da Silva & Jeferson Lana & Rosilene Marcon, 2018. "Agreeing and Impacting: The Effect of the Shareholders' Agreement on Firms' Market Value," Brazilian Business Review, Fucape Business School, vol. 15(1), pages 88-104, January.
    21. Franck Aggeri & Aurélien Acquier, 2005. "La théorie des stakeholders permet-elle de rendre compte des pratiques d'entreprise en matière de RSE ?," Post-Print halshs-00645708, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jbkreg:v:22:y:2021:i:3:d:10.1057_s41261-020-00140-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.