https://edunity.publikasikupublisher.com

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Edunity

Universitas Ngudi Waluyo, Indonesia

Email: meidalea[email protected]

The village government plays a crucial role in providing support for economic growth

in Indonesia (Huda, 2015). So, in improving the economy in Indonesia, the first step that must

be reviewed is economic growth in the village. Villages have a crucial position in improving

the community's economy by implementing economic development plans. Therefore, they

can provide opportunities for the community to develop businesses. In the village itself, there

is a lot of potentials that can be developed, however, it is often not well developed (Melia,

2015).

2018).

The village is a self-government whose management is carried out autonomously

without any structural hierarchical ties with higher structures. A village is a legal community

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what is available in the natural surroundings. In processing this potential, of course, the

village is expected to be able to establish an economic institution that is fully managed by the

village community. Economic institutions are one way to build the economic strength of

village communities, for example, Village-Owned Enterprises (BUMDes) (Handoko, 2000).

BUMDes is a form of institution that can advance the economy of the village community.

BUMDes are regulated in Article 87 of Law Number 6 of 2014 concerning Villages (Village

Law) where in fulfilling the needs and potential that exist within the village, the village can

establish BUMDes. BUMDes is an institution established by the village government whose

capital ownership and management are carried out by the community and village

government (Kurniawati, 2021). In establishing BUMDes, villages are obliged to hold village

resources (HR). This problem can be minimized by implementing good business management

by applying the principles of good corporate governance (Njatrijani et al., 2019).

The formation of BUMDes itself with HR problems must be by the 5 (five) principles of

good corporate governance: transparency, accountability, responsibility, independence, and

fairness. The principle of good corporate governance with the formation of BUMDes is carried

out to make BUMDes an independent legal entity and prosperous village (Alfinur, 2016). In

filling positions and managing BUMDES, community empowerment in terms of human

resources is crucial. Village community empowerment is an effort to develop community

independence and welfare by increasing knowledge, attitudes, skills, actions, competencies,

and awareness and also utilizing resources through establishing policies, programs, activities,

governance can control existing problems (Hasibuan, 2003). Human resources are the

potential competencies possessed by humans which consist of the competence to think,

communicate, take action, and have morals so that they can carry out activities that have a

technical or managerial nature. The problem in BUMDes is the inadequacy and incompetence

of human resources in BUMDes. Good human resources for an organization or corporation

are competent resources in carrying out their duties and responsibilities (Murwadji et al.,

2017).

This problem is not in line with one of the principles of good corporate governance,

namely the principle of accountability. Accountability is an explanation of the function,

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implementation, and responsibility of management of an organization or corporation with the

aim of managing the organization or corporation to run effectively. Accountability means

individual responsibility for performance in organizational units within a corporation. The

practice of good corporate governance principles is the basis for improving company

performance, namely financial and non-financial performance. So, the application of the

principles of good corporate governance has obstacles or constraints that need to be corrected

in order to improve the human resources of BUMDEs so that they can achieve sustainable

economic efforts. Moreover, a strategy for implementing good corporate governance is

needed to improve human resources in BUMDes which can advance and improve the

economy of local village communities.

with an emphasis on in-depth analysis of descriptive and interpretive data. This research will

involve in-depth interviews with various related parties, including BUMDes administrators,

members of the HR management team, as well as representatives from regional government

and local communities. Apart from that, document analysis and participatory observation will

also be carried out to obtain a holistic understanding of the dynamics of GCG implementation

and its impact on the quality of human resources and the performance of BUMDes.

BUMDes do not have formal education or adequate training in the fields of management,

finance, marketing, or business development, which can hinder their ability to manage

BUMDes activities efficiently and optimize their business potential. Apart from that, a lack of

understanding of the concepts of good governance and modern management practices can

also lead to a lack of transparency, accountability, and participation in decision-making and

resource management in BUMDes. This condition can lead to ineffective decision-making,

inappropriate resource allocation, and a lack of development of sustainable initiatives. As a

result, the performance and sustainability of BUMDes can be hampered, and their potential

contribution to local development and community welfare can be limited.

The implementation of Good Corporate Governance is a framework for managing

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c. Lack of level of participation and involvement of community members

d. Barriers in cultural and traditional aspects

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e. Barriers to social change

Implementation of Good Corporate Governance (GCG) in BUMDes has a significant

impact on improving the quality of Human Resources (HR) and overall organizational

performance. One of the key aspects of implementing GCG is increasing transparency and

accountability in the HR management process. By ensuring that policies, procedures, and

decisions related to HR in BUMDes can be accessed and well understood by all relevant

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communication between management and employees, which in turn can improve the quality

of working relationships and motivation.

Implementation of GCG in BUMDes is not only related to formal aspects of management

but is also closely related to the development of a healthy organizational culture. Through the

application of GCG principles, BUMDes can encourage the formation of an organizational

culture oriented towards integrity, ethics, and professionalism. GCG emphasizes the

importance of integrity and ethics in all aspects of BUMDes operations. By upholding these

values, BUMDes builds a strong foundation for an organizational culture of integrity, where

team members are expected to act honestly, fairly, and responsibly in every interaction and

decision they make. This not only creates a more transparent and trustworthy work

where HR feels valued and recognized for their contributions, thereby increasing their

motivation and involvement in achieving organizational goals.

The impact of a healthy organizational culture is very significant on the motivation,

involvement and productivity of human resources in BUMDes. When team members feel that

values such as integrity, ethics, and professionalism are valued and consistently implemented,

they tend to be more motivated to give their best in their work. In addition, their involvement

in the decision-making process and implementation of organizational strategies also

increases, because they feel that their contributions are valued and heard. As a result, the

overall productivity of BUMDes increases because a supportive, collaborative and

enthusiastic work environment is created.

or favoritism in the process.

The impact of an appropriate reward and sanction system can be very significant for

motivation, work ethic and the application of discipline in BUMDes. When team members

feel that rewards are given fairly and consistently according to their contributions, this can

increase their motivation to deliver the best results. In addition, a clear and consistent

sanctions system can be an effective tool to encourage compliance with BUMDes policies and

procedures, as well as promote a disciplined and responsible work culture.

Apart from influencing motivation and work ethic, implementing an appropriate

reward and sanction system can also have a positive impact on the quality of performance

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and sustainability of BUMDes as a whole. By encouraging and maintaining high standards of

performance through appropriate rewards and applying proportional sanctions, BUMDes can

ensure that team members continue to work to achieve organizational goals effectively and

efficiently. This can also help build BUMDes' reputation as a professional, transparent and

integrity entity in the eyes of the community and other stakeholders. As a result, an

appropriate reward and sanction system is an important tool in efforts to improve the quality

Given the various obstacles and impacts that occur in the quality of human resources in

human resources in BUMDes is very important because they are the key to success in

implementing GCG principles. Quality human resources will be able to implement GCG

principles well, manage risks, optimize resources, and improve overall performance, which

in turn will contribute to the development and sustainability of BUMDes and the welfare of

The principle of transparency in HR management in BUMDes involves providing clear,

open, and easily accessible information related to the HR recruitment, development, and

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evaluation, promotion, and conflict of interest management, the measures implemented must

ensure that decisions are made objectively, without any pressure or undue influence. The

principle of fairness is also important in HR management, which ensures that each individual

is treated fairly and proportionally according to their contribution. To achieve this, it is

important to avoid bias and promote an environment where fairness and fairness are a top

As part of the GCG implementation strategy to improve the quality of human resources)

in BUMDes, a concrete action plan could include steps such as preparing a clear code of ethics

for HR, regular training on GCG principles for all BUMDes members, establishing a

committee or independent monitoring mechanism to ensure compliance with GCG principles,

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