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Corporate Governance
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Evaluation & Implementation

The Company conducted an assessment of the implementation of GCG Practices with the aim of measuring the depth of implementation of GCG practices while getting feedback on its future improvements. GCG development and implementation is a form of the company’s commitment to increase business success and accountability in the long term which is expected to increase the value of the company, in the form of improved performance and the creation of good corporate image. Assessment of the Company’s GCG implementation in 2016 was carried out using the following criteria:

Based on the Decree of the Secretary of the Ministry of SOE Number: SK-16 / S.MBU / 2012 concerning Parame-ter Indicators for Assessment and Evaluation of the Application of Good Corporate Governance in State-Owned Enterprises issued on June 6, 2012 (“BUMN Scorecard “).

Based on the Corporate Governance Perception Index (“CGPI Index’) by the Indonesian Institute of Corporate Governance (IICG).

Based on the Asean Good Corporate Governance Scorecard (“Asean CG Scorecard’) by the Indonesian Institute for Corporate Directorship (IICD).

1. GCG Assessment Based on BUM N Scorecard

Since 2009, the Company has carried out an assessment of the implementation of GCG practices with the aim of measuring the depth of implementation of GCG practices while at the same time getting feedback on its improvements in the future. The assessment was made using the parameters of the Company Corporate Govern-ance Scorecard, issued by the Ministry of State-Owned Enterprises based on the Decree of the Secretary of the Ministry of SOEs No: SK-16 / S.MBU / 2012 concerning Parameter Indicators for Evaluation and Evaluation of the Implementation of Good Corporate Governance (Good Corporate Governance) in state-owned Enterprises issued on June 6. 2012.

In 2015 for the first time, the Company conducted a GCG self-assessment Index through the Internal Self Assessment Team (2015 self-assessment). The methodology used was evaluating the follow-up of 46 Area Of Improvement (“A01”) on the recommendations of the 2014 self-assessment results, in the form of 8 AOls being followed up, and 36 in the process of follow-up.

For 2016, the Company, assisted by PT Sinergi Daya Prima, assessed GCG implementation in 2016 using the same methodology as the methodology at the 2014 assessment. The achievement of the GCG Index score in 2016 was 92.23. The results of the 2016 GCG assessment using a different assessment method with 2015 self-assessment, so that the results of 92.23 will be relevant if juxtaposed and compared with the results of the assessment in 2014 by an independent assessor BPKP East Java Province.

The GCG Index value that has continued to increase since 2008 reflects the Company’s commitment to imple-menting GCG best practices within the Company. The summary of the results of the evaluation/evaluation. the implementation of the Company, GCG from 2009 to 2016 using the SOE Scorecard criteria is as follows:



2. GCG Assessment Based on CGPI Index

The Company’s participation in the 2016 CGPI Index is the first time. The CGPI Index program uses three (3) scope of the implementation of GCG in a sustainability perspective which consists of the scopeof compliance (comithance), the scope of conformity (conformance), and the scope of performance (performance). CGPI assess-ment weight uses the ANP (Analytical Network Process) method to measure the level of importance and rela-tionship between aspects, scope, and focus and assessment stages in the CGPI Index methodology. CGPI Index Rating uses assessment norms based on the range of values achieved by participants by categorizing the term “Trusted”. The weight of the CGPI Index assessment and the value obtained by the Company in 2016 are as follows:



3. GCG Assessment Based on ASEAN CG Scorecard

Asean CG Scorecard is a qualitative tool to measure the compliance of open companies in ASEAN to the GCG guidelines according to exemplary practices based on international standards, especially the principles of GCG issued by the Organization for Economic Cooperation and Development (OECD). The weight of assessment of ASEAN CG Scorecard and values obtained by the Company in 2016 are as follows: