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Corporate Governance

Governance Practices

  /  Governance Practices

GOVERNANCE PRACTICES

The Company has confidence that the implementation of good corporate governance (GCG) will encourage the creation of healthy competition and a conducive business climate. In addition, the implementation of GCG is also an important part in supporting sustainable economic growth and stability. This understanding underlies the Company’s commitment to always uphold the implementation of GCG in every level of the organization and its operational activities. Through a high commitment and consistency to the implementation of good corporate governance, the Company believes it will be able to prevent the practices of Corruption, Collusion and Nepotism as well as improve the supervisory function in the management of the Company.

Consistency of GCG implementation also improves business performance and sustainable growth, which will ultimately increase the company’s value (corporate value) for shareholders and other stakeholders.

Management’s commitment to compliance with GCG consists of several related policies and provisions including:

  1. Commitment from all levels of the Company to implement all rules and policies as part of efforts to implement best corporate governance practices. This is demonstrated by the top management by always basing all decisions and the determination of the company’s main policies on the relevant rules and laws.
  2. Top management signs a Statement of Compliance with the Code of Ethical Conduct, a Statement of Conflict of Interest and a Statement of Share Ownership in order to comply with all the rules in the Company’s Code of Ethical Conduct. The Statement of Compliance with the Code of Ethical Conduct is signed by all levels of the Company.
  3. Determination of KPIs related to GCG implementation.
  4. Implementation of entity level control tests to ensure the effectiveness and implementation of entity level internal controls in order to provide reasonable assurance on the reliability of financial reporting.

Adequate allocation of the annual budget for the implementation of GCG, among others for the program to increase the competence of the parties involved in the implementation of GCG (Board of Commissioners, Organs of the Board of Commissioners, Directors, Risk Management Function, Internal Control Function, Internal Supervision Function, Corporate Secretary Function, Technology Function Information and other work units).

LEGAL BASIS OF GCG

In implementing GCG, the Company is based on a number of rules but is not limited to:

  1. Law no. 40 of 2007 concerning Limited Liability Companies.
  2. Law no. 19 of 2003 concerning State-Owned Enterprises (SOEs).
  3. Regulation of the Minister of BUMN Number PER-01/MBU/2011 concerning the Implementation of Good Corporate Governance in BUMN, which was later amended through the Regulation of the Minister of State for BUMN Number PER-09/MBU/2012 concerning Amendments to the Regulation of the Minister of State State-Owned Enterprises Number PER-01/MBU/2011 concerning the Implementation of Good Corporate Governance in State-Owned Enterprises.
  4. Decree of the Secretary of the Ministry of State-Owned Enterprises No. SK-16/S.MBU/2012 concerning Indicators/Parameters in this section can be made an Assessment and Evaluation of the Implementation of Good Corporate Governance in State-Owned Enterprises.
  5. Financial Services Authority Regulation Number 21/POJK.04/2015 concerning Implementation of Public Company Governance Guidelines.
  6. OJK Circular Letter No. 32/ SEOJK.04/2015 concerning Guidelines for the Governance of Public Companies.
  7. Articles of Association of the Company. Those who require Articles of Association documents can send requests via e-mail to info@sig.id. 

ROAD MAP OF GCG IMPLEMENTATION

The Company has compiled a GCG Roadmap to provide a comprehensive overview of various aspects of corporate governance that need to be improved as well as to foster Management’s commitment to implementing GCG, which is then followed up with steps for improvement and consistency in its implementation.

 

The Company’s management has also set a description of the stages of implementing the Company’s GCG with the objective of becoming an ethical and responsible company, as well as making good governance practices a culture in corporate management, as follows :

GCG IMPLEMENTATION STRUCTURE

In accordance with Law no. 40 of 2007 concerning Limited Liability Companies, the company’s organs consist of the General Meeting of Shareholders (GMS), the Board of Commissioners and Directors as well as other supporting organs. The management of the Company adheres to a two board system, namely the Board of Commissioners and the Board of Directors, which have clear authorities and responsibilities according to their respective functions as mandated in the Articles of Association and other relevant laws and regulations.

 

The implementation of corporate governance is carried out systematically and continuously and uses GCG principles as a reference in daily activities. In the Board of Commissioners, functional committees have been established to empower the supervisory function, which consist of the Audit Committee, Nomination & Remuneration Committee and CSR, as well as the Risk Management and Investment Strategy Committee (SMRI). According to Regulation No. 01/2011/KBUMN as well as in the Board of Directors a work unit has been established that controls, oversees and is responsible for the implementation of GCG and also serves as a working partner of the committees under the Board of Commissioners, as shown in the following figure:

 

GCG MECHANISM

The Company implements the GCG mechanism in an order, where all GCG organs have their own responsibilities but still carry out GCG implementation in an integrated manner. The GMS has the highest authority where the shareholders will carefully consider their decisions for the long-term interests of the Company. After the decision is taken, the GMS will then hand over all authority to supervise and implement the decision to the Board of Commissioners and the Board of Directors.

 

Based on this mechanism, the management of the Company and the implementation of each decision of the GMS is carried out by the Board of Directors. The Board of Commissioners then supervises and provides advice to ensure that the objectives of the Company and the resolutions of the GMS are implemented and achieved. In carrying out its work, the Board of Commissioners is assisted by the organs of the Board of Commissioners, namely the Secretary to the Board of Commissioners, the Audit Committee, the Nomination, Remuneration & GCG Committee and the Risk Management and Investment Strategy Committee. The Board of Directors who is responsible for the management of the Company will be assisted in carrying out these management tasks by the Risk Management Function, Internal Control Function, Internal Supervision Function, Corporate Secretary Function, Information Technology Function and other work units that carry out the management function of the Company.

In addition, the Company also conducts an independent audit of the presentation of financial statements by a Public Accountant. This process is important, where financial statements are one of the fundamental information that reflects the Company’s performance and the management carried out by management.