The Effect of Compensation on the Independence of Supervisory Board of Rural Credit Institution in Bali

ABSTRACT: This study aims to prove the effect of professional expertise, and work experience on the level of independence of RCI supervisory bodies with contingent factors in the form of compensation received. A questionnaire survey was conducted in 8 regencies and 1 city in Bali. A total of 94 representatives of the RCI Supervisory Board (panureksan) were respondents. The data obtained were then analyzed by moderated regression analysis after passing the classical assumption test as a condition of the causality test as well as the validity and reliability test of the instruments used. The results of this study indicate the influence of compensation that strengthens the relationship of experience that can increase the independence of RCI supervisory bodies. Meanwhile, professional expertise does not depend on the compensation earned to influence the independence of the supervisory body. This is due to the capacity of the supervisory body which is dominated by the burdens and responsibilities of the bendesa/prajuru adat, and also due to the compensation system that has been standardized according to the ability of the RCI. In addition, there are indications that the ewuh pakewuh culture is an obstacle to the independence of the RCI supervisory body and dualism of responsibilities, both for the indigenous village community and the RCI. This empirical evidence can be used as a study material to develop a regulation to improve the quality as well as the role of RCI supervisory bodies in order to strengthen competitive and sustainable RCI governance.

KEYWORDS : Independence, Professional expertise, Experience, Compensation