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    Corporate Governance World Updates

    December 2015 - The Launching of New G20 / OECD Principles of Corporate Governance

    On December 3rd, 2015, OJK in cooperation with Organization for Economic Co-operation and Development (OECD) launched The New G20 / OECD Principles of Corporate Governance at Menara Radius Prawiro (Gedung A), Kompleks Perkantoran Bank Indonesia.

     

    The G20/OECD Principles of Corporate Governance help policy makers evaluate and improve the legal, regulatory, and institutional framework for corporate governance. They also provide guidance for stock exchanges, investors, corporations and others that have a role in the process of developing good corporate governance. First issued in 1999, the Principles have become the international benchmark in corporate governance. They have been adopted as one of the Financial Stability Board’s Key Standards for Sound Financial Systems and endorsed by the G20. This 2015 edition takes into account developments in both the financial and corporate sectors that may influence the efficiency and relevance of corporate governance policies and practices.

     

    The Principles of Corporate Governance is as follows:

    1. Ensuring the basis for an effective corporate governance framework

    - Role of corporate governance

    - Quality of supervision and enforcement

    - Role of stock markets

     

    2. The rights and equitable treatment of shareholders and key ownership functions

    - Basic shareholder rights

    - New issues: Electronic voting, Related party transactions, Say-on-Pay

     

    3. Institutional investors, stock markets and other intermediaries

    - New chapter: Sound economic incentives throughout the investment chain

    - Disclose and minimize conflicts of interest of the intermediaries

     

    4. The role of stakeholders in corporate governance

    - Encourage active co-operation between corporations and stakeholders

    - Stakeholders access to information

     

    5. Disclosure and transparency

    - Key areas of the board

    - Non-financial information

     

    6. The responsibility of the board

    - Key functions of the board

     

    New issues: Risk management, Tax planning, Internal audit

    November 2015 - FSA launched Corporate Governance Guideline for Public Company

    Jakarta, November 17th, 2015, Financial Service Authority (OJK) launched Corporate Governance Guideline for Public Company in Borobudur Hotel, Flores Room. In promoting good corporate governance, FSA initiated a "Comply and Explain" concept. Listed Companies have been recommended to follow the guideline to improve their corporate governance and simultaneously increase the Indonesia Listed Company Governance. If the public company fails to or cannot implement such recommendations, it shall give that explanation and the implementation alternatives (if any). In the following time, the company will be recommended to try to comply again.

     

    Mrs. Nurhaida, FSA Commissioners Chief Executive, functioning as Capital Market Supervisor said that the purpose of the development of Corporate Governance Guideline of a public company was to encourage the adoption of corporate governance practices of a public company based on international best practices.

     

    Previously, in 2014 OJK has arranged Corporate Governance Roadmap for Issuers and Public Companies (Roadmap) to compile a governance improvement milestone of Issuers and Public Companies, to improve the regulation and governance practice of Issuers and Public Companies comprehensively and to increase the governance practice of Indonesian Issuers and Public Companies. Roadmap generated recommendations as improvement endeavors of governance practice implemented through three things, namely OJK rules, socialization and corporate governance guideline of Issuers or Public Companies. As one of the recommendations in the Roadmap, the development of Corporate Governance Guideline of a public company is expected to become one of the GCG frameworks in the capital market industry. The basic consideration of such Guideline development is that not all GCG aspects, especially those refer to best practices, can be fully set out in a form of regulation. The reason is that the effectiveness of GCG implementation by a public company also depends on the industry type, size, and complexity of the company itself.

     

    This new guideline will strengthen the OJK regulation in the area of corporate governance.

     

    July 2015 - Towards Better Governance of Issuers and Public Companies

    Indonesia Corporate Secretaries stepped into a new era. Last year Indonesia FSA announced several new regulations that come into effect this year. As a follow up on the Indonesia Corporate Governance Roadmap on January 2014, OJK (Financial Services Authority) has issued four Regulations in November 2014 in relation to Protection of Shareholders (Regulation on General Meeting of Shareholders for Public Companies), Role of Stakeholders (Regulation on Company Secretary of Issuers or Public Companies), Roles and Responsibilities of the Board of Commissioners and Board of Directors (including regulation on Committee of Nomination and Remuneration for Issuers and Public Companies). Other regulations related to Corporate Governance Framework, Protections of Shareholders, Role of Stakeholders, Transparency of Information, and Roles and Responsibilities of the Board of Commissioners (BOC) and Board of Directors (BOD) will be issued on the second semester of 2015.

     

    With this regulation, we will increase the level of transparency, initiate a greater level of responsibilities to our stakeholders, promote company’s accountabilities, through balance and fair consideration in all company’s management and action. Most of investor will start to acknowledge the improvement of many public listed website. According to the new regulation, Indonesia Public Listed Companies have to publish any corporate action and material information to their websites. All shareholders are going to find the easiness in getting company’s information.

     

    February 2014 - The Indonesia Financial Services Authority (OJK) has been preparing 33 regulations regarding Good Corporate Governance (GCG)

    OJK launched the Indonesia Good Corporate Governance (GCG) Roadmap which will be implemented within two years. The Chief Executive Supervisor of Capital Market Financial Services Authority, Mrs. Nurhaidaexplained, that the purpose of GCG Roadmap Launching was improving the Indonesian Public/Listed Companies Governance to be equal as other ASEAN companies in Region. Nurhaida said, “we need these regulations as the legal basis/foundation to support the implementation of GCG”. Therefore, OJK has been preparing 33 (Thirty-three) implementation guidelines which compulsory to be followed by the Public Companies. All Regulation concerning GCG will be issued periodically. In 2014, OJK will only issue 11 regulations, and another 11 regulations will be initiated in 2015. “The remaining regulations are going to be published in the next several years program”, Mrs. Nurhaidaadded, in GCG Roadmap launched event in Jakarta, Tuesday, February 4th, 2014.

     
    The entire regulations is comprised of 6 (six) major themes. The details as follows:

    1.The Framework of GCG; 2.The Shareholders Rights; 3.The Equally Treatment for Every Shareholders; 4.The Roles of All Stakeholders; 5.The Disclosures and Transparency; also 6.The Roles and Responsibilities of The Commissioners and Directors.

     
    The Chairman of Board of Commissioner of OJK, Mr. Muliaman D. Hadadsaid, “This Roadmap will also be the main reference in improving good governance practices and regulations for companies in a comprehensive manner, specifically Issuers and Public Companies. This Roadmap will also make positive contributions to improving good corporate governance, to at least to be on par with the corporate governance in the ASEAN region, in order to meet the ASEAN Economic Community (AEC) in 2015 ”. (www.hukumonline.com)

     

    December 2013 - The Continuation of Indonesia Financial Services Authority (OJK) regulations regarding Good Corporate Governance (GCG) in the end of 2014

    According to Indonesia Financial Services Authority (OJK), they had a plan to publish several regulations in 2014 that related to GCG for public/listed company as stated by The Chief Executive Supervisor of Capital Market Financial Services Authority, Mrs. Nurhaida, On December 18th 2014, OJK published through their official website, 4 new Regulations as follows:

    1. POJK No. 32/POJK.04/2014 concerning The Planning & Implementation of General Meeting of Shareholders for the Public/Listed Company;
    2. POJK No. 33/POJK.04/2014 concerning The Directors & The Board of Commissioners of Public/Listed Company;
    3. POJK No. 34/POJK.04/2014 concerning The Nomination & Remuneration Committee of Public/Listed Company
    4. POJK No. 35/POJK.04/2014 concerning The Corporate Secretary of Public/Listed Company

    The regulations shall come into effect on the date on which it is enacted.

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