Implementation of the principles of financial governance in service companies

Abstract

The principles of financial governance that can be used to guide the design of service organizations are accountability, efficiency, transparency, legitimacy, and inclusiveness (Lockwood, Davidson, Curtis, Stratford, & Griffith, 2010). Financial governance mechanisms are also important for institutions for business continuity (Gennaro & Nietlispach, 2021). This study aims to analyze the principles of financial governance of companies traveling for Hajj and Umrah services. The research uses a qualitative approach with a phenomenological method that describes and gives meaning to the data. Data were obtained through interviews with the president’s director, director of operations, and finance department. Based on the results of data analysis, it shows that the five principles of financial management that become one unit can be implemented in the form of 1) binding and saving independently, guaranteeing the commitment of both parties; 2) determining packages and costs to facilitate Hajj pilgrims with various requests for facilities; 3) pay for departure, meaning that the company only receives payment after confirmation and schedule of departure; 4) bookkeeping is carried out on every financial transaction that has an impact on account changes; and 5) Infaq and empowerment as a form of redistribution of income and community welfare. The implementation of the five principles of financial governance from this study can be adopted for Hajj and Umrah travel agencies, especially in Muslim-majority countries.