Financial Accountability and Governance Mechanisms for Sustainable Village-Owned Enterprises: Evidence from Trenggalek Regency, Indonesia

Abstract

Purpose: This study investigates the strategic role of Village-Owned Enterprises (Badan Usaha Milik Desa/BUMDes) directors in strengthening organizational governance and sustainability in Trenggalek Regency, Indonesia. It focuses on six director competencies: transformational leadership, managerial competence, entrepreneurial orientation, communication skills, adaptability, and financial governance.Research Methodology: This study employed a qualitative interpretive case study approach. Data were collected from 12 key informants through interviews and participant and non-participant observations involving government officials, village facilitators, and BUMDes managers. Data were analyzed using coding and thematic analysis.Results: The findings show that BUMDes sustainability is strongly associated with director competence, including leadership, managerial skills, communication, entrepreneurial orientation, adaptability, and financial understanding. Stakeholder collaboration and continuous training further support organizational development.Conclusions: Director competence plays a central role in strengthening BUMDes governance and sustainability. Improving leadership and managerial capabilities can enhance organizational effectiveness and support the long-term development of village-owned enterprises.Limitations: The study focuses exclusively on BUMDes in Trenggalek Regency. Therefore, its findings are context-specific and may not fully represent BUMDes conditions in other regions of Indonesia.Contributions: This study highlights director competence as a key determinant of BUMDes sustainability and supports competency-based selection and capacity-building programs.