The Role of Criminal Law in Enforcing Good Corporate Governance as an Instrument for Strengthening Business Integrity in Indonesia

Abstrak

The implementation of Good Corporate Governance (GCG) constitutes a fundamental element in establishing a corporate governance system that is transparent, accountable, and grounded in integrity. Nevertheless, in practice, many corporations in Indonesia continue to encounter significant challenges in consistently applying GCG principles. The increasing prevalence of corporate legal violations such as corruption, money laundering, and financial fraud reflects weak compliance culture as well as ineffective internal and external oversight mechanisms. This condition underscores the necessity of criminal law as an instrument of control and enforcement to ensure corporate compliance and ethical business conduct. This study aims to analyze the role of criminal law in enforcing Good Corporate Governance principles and to identify the factors influencing its effectiveness in Indonesia. The research employs a normative juridical method using statutory and conceptual approaches. The data are derived from primary legal materials, including legislation and court decisions, as well as secondary legal materials in the form of books, academic journals, and relevant legal literature. Data analysis is conducted through a qualitative-descriptive approach to interpret the relationship between legal norms and the practical implementation of GCG within corporate business practices. The findings indicate that criminal law plays a strategic role in strengthening the enforcement of Good Corporate Governance through both preventive and repressive functions. However, its effectiveness remains limited due to weak application of corporate criminal liability, inadequate institutional capacity among law enforcement agencies, and the absence of a strong compliance culture within corporations. Therefore, regulatory reform, enhancement of law enforcement capacity, and synergy between criminal law policy and corporate governance mechanisms are essential. Through these efforts, criminal law is expected to function not merely as a punitive instrument but also as a mechanism for fostering integrity, transparency, and accountability within Indonesia’s corporate sector