GCG Self Assessment

SELF-ASSESSMENT

In accordance with the provisions of the OJK, the Bank shall conduct self assessment of the implementation of GCG principles at the Bank each semester as stipulated in the provisions of POJK No. 55/POJK.03/2016 and SEOJK No. 13/POJK.03/2017 on GCG Implementation for Commercial Banks. This self-assessment is also an effort from the Bank to improve the quality of GCG implementation through self-assessment which involves the Board of Commissioners and Independent Parties, Board of Directors, Executive Officers and independent functions.

Procedures

According to the OJK provisions, the Bank has to perform comprehensive and structured self-assessment integrated into 3 (three) aspects of Governance, which are:

  1. Governance Structure
    The evaluation of the Governance structure aims to evaluate the adequacy of the structure and infrastructure of the Bank’s Governance so that a good process of principles of governance is producing outcomes that are in line with the stakeholders’ expectations.

  2. Governance Process
    The evaluation of the Governance process aims to assess the effectiveness of the implementation process of good Governance principles supported by adequate structure and infrastructure of the management of the Bank, which shows the results are in line with the expectations of the stakeholders.

  3. Governance Outcome
    The assessment of governance outcomes aims to assess the quality of the Bank’s outcomes (including both qualitative and quantitative aspects), which are the result of the implementation of Good Corporate Governance principles which is supported by the adequacy of the Bank’s structure and infrastructure.

Assessment Criteria

The Self Assessment is carried out periodically on the basis of GCG principles which comprises 11 factors of governance assessment:

  1. The performance of the duties and responsibilities of the Board of Directors.

  2. Implementation of the duties and responsibilities of the Board of Commissioners.

  3. Completion and duties execution of the Committee.

  4. Conflict of interest managemen.

  5. Implementation of the 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. Provision of funds to the related party and provision of large exposures.

  10. Transparency of the Bank’s financial and nonfinancial conditions, GCG implementation report and internal reporting.

  11. Bank’s strategic plan.

And other information regarding the implementation of the Bank’s Governance beyond the 11 factors of the Governance implementation assessment.

The results of the Bank’s implementation assessment are based on the questionnaire results of the selected respondents and considering the findings within the Bank with the results of the questionnaire. These findings are compiled from various units in the Bank, such as Internal Audit, Anti-Fraud Management, Risk Management, Human Resources, Compliance and more, including findings from regulators.

Parties Conducting the Assessments

Self-assessment of the Bank’s Governance implementation involves the Board of Commissioners, Board of Directors, Independent Parties and Executive Officers of the Bank to produce a comprehensive and structured assessment of the Governance system effectiveness and quality of the Governance outcome of the Bank.

Assessment Results

Based on the three assessment aspects, the result for GCG implemention individually and consolidated with the subsidiaries through GCG self assessment in first and second half of 2019 were as follows.

GCG Implementation Self Assessment Result
Entity Rank Rank Definition
Bank (Individually) 2 Bank Governance Rating is 2 (GOOD), which reflects that Bank's Management has adequately applied the Good Governance principles.
CIMB Niaga Auto Finance (CNAF) 2 CNAF Governance Rating is 2 (GOOD), which reflects that CNAF generally has complied with the Governance provisions and principles.
CIMB Niaga Sekuritas (CNS) 3 CNS Governance Rating is 3 (FAIR), which reflects that CNS gradually has complied with the Governance provisions and principles in line with CNS operational activity which is still limited.
Consolidated 2 Consolidated Governance Rating is 2 (GOOD), which reflects that Bank and Subsidiaries, Management has adequately applied the Good Governance principles.

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

Recommendations And Follow Ups

In general, the Bank is adequate in applying the principles of Governance, although there are some weaknesses identified in the aspects of Governance, the management of the Bank is able to complete and carry out its normal operations. The Bank is committed to implement GCG principles in its activities to achieve business sustainability.

Based on the 2019 self-assessment, some improvements will be made by the Bank, including updating the Bank’s policies and procedures.