Title Indonesian Codes of Corporate Governance (Mei 2019).pdf ✅

THE INDONESIAN CODES OF CORPORATE GOVERNANCE By: Formulation Team: 1. Kanaka Puradiredja (Chairman) 2. Mulyadi (Member) 3. LID da Lopez (Member) 4. Mohammad Mukhlis (Member) 5. Stefanus Murti Sri Sadana (Member) 6. Daniel F. Iskandar (Member) 7. Jeffrey Siregar (Secretary) Steering Team: 1. Mas Achmad Daniri (Chairman) 2. Irwan M. Habsjah (Member) Resource Persons: 1. Indra Safitri 2. Hari Setianto 3. Angela Simatupang 4. Rudy Arnanda Jakarta, June 2019
Komite Nasional Kebijakan Governance 2 FOREWORD CHAIRMAN OF NATIONAL COMMITTEE ON GOVERNANCE The application of good corporate governance may be driven from two sides, namely ethics and regulations. Ethical encouragement comes from the awareness of individual business people in carrying out business practices which prioritize corporate sustainability, the interests of stakeholders, and avoid short term profits. On the other hand, regulatory driven "forces" corporations to comply with applicable laws and regulations. Both of these approaches have their own strengths and limitations and should complement each other to create a healthy business environment. The 2019 Indonesian Codes of Corporate Governance are published based on ethical framework. These principles do not have legal consequences, however should be used as a reference for authorities and corporations in implementing their respective corporate governances. The principles explain steps that need to be taken to create a checks and balances situation, encourage transparency and accountability, and create social responsibility in order for the corporation to survive. These Principles are refinements of the Guidelines published in 2006 and expected to be a living document so this necessity at continuing review and revise inline with current developments. The refinement of the 2006 Guidelines includes aligning the contents of the Principles with the 2015 Organization for Economic Co-operation and Development Corporate Governance (OECD CG) Principles and contains best practices in other countries. In general, these Principles contain the rights of shareholders and their fulfillment, basic rules regarding management, and supervision of corporate management in Indonesia. The ten principles formulated in this guideline have been based on international standards and Law No. 40 of 2007 concerning Limited Liability Companies. Formulation of these Codes is carried out by a Team formed by KNKG. The team formulates the Codes to a final draft stage. The next step of the draft was discussed internally at the KNKG plenary meeting. After obtaining approval at the plenary meeting, socialization meetings were held with various related parties. KNKG expressed its highest gratitude and appreciation to Kanaka Puradiredja as Team Leader and all members ie., Mulyadi, LID da Lopez, Mohammad Mukhlis, Stefanus Murti Sri Sadana, Daniel F. Iskandar and Jeffrey Siregar for their contribution in developing these Codes. In addition, KNKG also expressed its gratitude and appreciation to the resource persons, namely Indra Safitri, Hari Setianto, Angela Simatupang, and Rudy Arnanda, who provide valuable inputs to the contents of the Codes. KNKG also expressed its gratitude and appreciation to PricewaterhouseCoopers for its contribution in reviewing the English version of the Codes. Hopefully these Codes will contribute to the improvement of the Indonesian economy.
Komite Nasional Kebijakan Governance 3 Jakarta, June 2019 National Committee on Governance Chairman Mas Achmad Daniri
Komite Nasional Kebijakan Governance 4 CONTENTS Preface ......................................................................................................2 Contents ....................................................................................................4 Chapter 1 Intruduction...................................................................................6 Definition of Codes of Corporate Governance ..........................................6 Basic Values Underlying The Indonesian Codes of Corporate Governance................................................................7 The Purpose of Formulating The Indonesian Codes of Corporate Governance ................................................................7 The Content of The Indonesian Codes of Corporate Governance................................................................................................8 A Brief Explanation of The Indonesian Principles of Corporate Governance ...............................................................8 Applicability of The Indonesian Codes of Corporate Governance .........................8 Updating The Indonesian Codes of Corporate Governance .......................9 Chapter 2 Summary of The Principles of Corporate Governance ................................10 Chapter 3 The Ten Indonesian Principles of Corporate Governance ............................13 Principle 1 The Rights Of Shareholders, General Meeting Of Shareholders, And The Rights Of Other Key Stakeholders....................................13 Principle 2 The Roles And Responsibilities Of Management Board And Supervisory Board .........................................................17 Principle 3 Composition and Remuneration of Management Board and Supervisory Board............................................................................22 Principle 4 Cooperation Between Management Board And Supervisory Board ...........................................................................24 Principle 5 Quality Improvement of The Management Board and Supervisory Board Members............................................................25 Principle 6 Institutional Investors, Capital Markets,
Komite Nasional Kebijakan Governance 5 And Other Intermediaries.................................................................25 Principle 7 Ethical Behavior ..............................................................................26 Principle 8 Governance, Risk and Compaliance ................................................27 Principle 9 Disclosure and Transparency ..........................................................28 Principle 10 Compliance With Applicable Legislation .......................................29