The strategy of promoting effective management and accountability in village-owned enterprises through governance

Abstract

The objectives of this study are twofold. The first objective is to assess the degree to which governance principles are implemented in village-owned enterprises, VOEs (Badan Usaha Milik Desa, BUMDes) within the Cilacap regency. Identifying the obstacles to the successful implementation of governance practices in BUMDes is the second objective. A mixed-methods approach was used in the research technique, which combined quantitative and qualitative descriptive analyses. The quantitative component involved the administration of a questionnaire to eighty respondents, including BUMDes managers, village chiefs, and oversight bodies. The qualitative component consisted of focus group discussion (FGD), and observations to gather additional insights and perspectives. The primary findings of the study indicate that the application of governance principles exceeds fifty percent, indicating implementation that ranges from effective to extremely effective. However, the study also identified a number of barriers, such as a lack of synergy between the village government, BUMDes, and the community, limited human resource capacity, the absence of legal entity status for BUMDes, and ineffective governance mechanisms, which are similar to Lauwo et al. (2022) research. The significance of this study rests in the fact that research outcomes can direct efforts to overcome obstacles and improve the administration and accountability of BUMDes in the Cilacap regency and other regions with comparable characteristics.