GCG Self Assessment

GCG Implementation Assessment

GCG assessments, help ensure that CIMB Niaga adheres to applicable business ethics standards, regulations, and policies, resulting in a high level of transparency in the Bank’s decisions and actions. GCG assessments also help to build and maintain stakeholder trust, forming the foundation for strong relationships between the Bank and the various parties involved. CIMB Niaga evaluates the quality of GCG implementation both independently (self-assessment) and collaboratively with third parties to obtain more objective assessment results.

SELF-ASSESSMENT

PROCEDURE

Every semester, a self-assessment on the implementation of governance principles is carried out in accordance with the provisions of OJK Regulation 17 of 2023 and OJK Circular Letter No. 13/POJK.03/2017 on Governance Implementation for Commercial Banks. The assessment is comprehensive and structured, focusing on the implementation of governance principles in 3 (three) aspects: Structure, Process, and Outcome.

  1. Governance Structure
    The Bank assesses the adequacy of the Bank’s Governance structure and infrastructure in generating results (outcomes) that meet the expectations of stakeholders.

  2. Governance Process
    The Bank assesses the effectiveness of the process of implementing Good Governance principles, which is supported by the adequacy of the Bank’s governance structure and infrastructure, in order to generate outcomes that meet the expectations of stakeholders.

  3. Governance Outcome
    The Bank assesses the quality of Governance outcomes (both qualitative and quantitative), which are the result of the process of implementing Good Governance principles, which is supported by the adequacy of the Bank’s Governance structure and infrastructure.

ASSESSMENT CRITERIA

There are 11 (eleven) governance assessment factors for self-assessment, including:

  1. Implementation of the duties and responsibilities of the Board of Directors.
  2. Implementation of the duties and responsibilities of the Board of Commissioners.
  3. Completeness and implementation of the Committee’s duties.
  4. Managing conflict of interest.
  5. Implementation of the Bank’s compliance function.
  6. Implementation of the internal audit function.
  7. Implementation of the external audit function.
  8. Implementation of risk management, including internal control system.
  9. Providing funds to related parties and large exposure.
  10. Transparency of the Bank’s financial and non-financial conditions, GCG implementation report, and internal reporting.
  11. Bank’s strategic plan.

The assessment is also conducted on other relevant and significant aspects to Governance implementation. The final outcomes of the assessment of the implementation of Bank Governance are based on the results of a questionnaires distributed to selected respondents, and incorporates findings from within the Bank based on questionnaire results. These findings are compiled from various units in the Bank, including Internal Audit, Anti Fraud Management, Risk Management, Human Resources, Compliance, and others, as well as finding from the regulators.

PARTIES CONDUCTING THE ASSESSMENT

Self-assessment requires the Bank’s Board of Commissioners, Board of Directors, Independent Parties, and Executive Officers to provide a comprehensive and structured assessment of the effectiveness of its governance. The self-assessment is also performed on the implementation of governance within subsidiaries in accordance with regulations in the financing and capital markets sectors. The results of subsidiaries’ self-assessments are consolidated using internal methodology based on materiality and significance.

ASSESSMENT RESULT

The results of individual and consolidated Bank GCG self-assessments for Semesters I and II of 2023:

GCG Implementation Self-Assessment Results
Entity Rating Rank Definition
Bank CIMB Niaga (Individually) 2 Bank Governance Rating is 2 (GOOD), which reflects that Bank management has adequately applied the GCG principles.
CIMB Niaga Auto Finance (CNAF) 2 CNAF Governance Rating is 2 (GOOD), which reflects that CNAF has generally complied with the GCG provisions and principles.
CIMB Niaga Sekuritas (CNS) 2 CNS Governance Rating is 2 (GOOD), which reflects that CNS has generally applied the GCG provisions and principles.
Consolidated 2 Consolidated Governance Rating is 2 (GOOD), which reflects that management of the Bank and subsidiaries have adequately applied the GCG principles.

Each subsidiary, CNAF and CNS, have also conducted a GCG self-assessment in accordance with OJK Governance provisions applicable to its business activities as a Financing and Securities Company.

RECOMMENDATIONS AND FOLLOW-UP

CIMB Niaga’s GCG implementation in 2023, both for bank-only and in a consolidated manner, achieved a rating of 2 (Good). Based on this assessment, the Bank and its subsidiaries are deemed adequate in implementing governance principles. Despite several governance-related identifiable weaknesses, the Bank’s management and subsidiaries can complete and carry out follow-up actions normally. The Bank is committed to incorporating governance principles into its activities in order to achieve long-term business sustainability.

Recommendations for the 2023 self-assessment include strengthening the governance process to support an effective internal control system and maintaining risk governance. The Bank and its subsidiaries will follow up on these recommendations.

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