Indonesian General Guidelines for Corporate Governance (PUGKI)
The National Committee on Governance Policy (KNKG) has issued the 2021 Indonesian General Guidelines for Corporate Governance (PUGKI) as the global standard guidelines for corporate governance practices, which are recommended particularly for corporations listed on the capital market and managing public funds. The application of good corporate governance principles has an important role in increasing the confidence of investors and stakeholders, reducing the cost of capital, strengthening the capital market and the financial services sector, expanding employment and encouraging economic growth, which is in line with the principles of sustainable development.
The 2021 PUGKI consists of eight principles that are divided into three groups of principles: (1) the first group of principles governs corporate management and oversight functions, namely the Board of Directors and the Board of Commissioners, (2) the second group of principles governs processes and outputs generated by the Board of Directors and the Board of Commissioners, (3) the third group of principles governs resource owners, who will primarily benefit from the implementation of corporate governance. The principles of the first group are presented in principles 1 to 3. The principles of the second group are presented in principles 4 to 6. The principles of the third group are presented in principles 7 and 8.
CIMB Niaga applies the principles and recommendations of the 2021 PUGKI based on the “apply or explain” approach with the following details of implementation at the Bank:
| Principle | Recommendation | Implementation at CIMB Niaga | |
|---|---|---|---|
| Principle 1: Roles and Responsibilities of the Board of Directors and Board of Commisisoners |
1.1 Roles and Responsibilities of the Board of Directors | 1.1.1 To achieve sustainable value creation, the Board of
Directors carries out its leadership role and seeks to
achieve the following governance outcomes:
1.1.2 The Board of Directors must ensure that the corporate mission, vision, goals, objectives, strategies, as well as annual and mid-term plans are consistent with long-term goals, by effectively utilizing innovation and technology. 1.1.3 The Board of Directors ensures that the corporation implements an appropriate and effective risk management and internal control system that is aligned with the corporate vision, mission, goals, objectives and strategies, as well as complying with applicable laws and regulations and standards. 1.1.4 The Board of Directors ensures that the integrity of the corporate accounting and financial reporting system and the timely and accurate disclosure of all material information about the corporation. 1.1.5 The Board of Directors ensures that sustainability reporting has been prepared properly. 1.1.6 The Board of Directors builds a framework for corporate information technology (IT) governance that is aligned with corporate business needs and priorities, drives business opportunities and performance, strengthens risk management, as well as supports corporate goals and strategies. 1.1.7 For corporations conducting business activities based on Sharia principles, the Board of Directors needs to ensure the authority and availability of adequate supporting tools, allowing the Sharia Supervisory Board to carry out its role effectively. 1.1.8 The Board of Directors’ Charter is periodically reviewed. The Charter includes, among others, the delegation of roles for the Directors individually, which can be regulated in the Board of Directors’ Charter or by a decision letter of the Board of Directors. 1.1.9 The Board of Directors has a policy regarding the resignation of members of the Board of Directors if they are involved in a financial crime and are proven to have made a mistake. |
Apply The Board of Directors realizes high standards of business ethics and ensures the implementation of a code of ethics that creates a corporate culture with integrity. One of the measures is by implementing a new work culture, namely EPICC (Enabling Talent, Passion, Integrity & Accountability, Collaboration, Customer Centricity). The Board of Directors has made the optimization of the latest information technology implementation as one of the strategic pillars in achieving both short and long-term business targets. The Bank’s risk management system and internal control are always aligned with the corporate vision, mission, goals, objectives, and strategies, as well as complying with applicable laws and regulations and standards. The Board of Directors ensures that everyone involved in the preparation and disclosure of corporate information has adequate skills and background to carry out their work. Profile of the Strategy, Finance and SPAPM Director as well as senior management from work units responsible for financial reporting are presented in this Annual Report. The Board of Directors is also responsible for and publishes the Quarterly Financial Reports on the Bank’s website and mass media in accordance with applicable regulations. The Board of Directors and management have ensured that the Sustainability Report is prepared based on a reporting framework that is appropriate to the size and complexity of the corporation and meets national and/or global standards. The Bank’s IT governance strategy and framework are explained in detail in this Annual Report. The Board of Directors ensures that the Bank has adequate and optimal IT resource allocation policies to support the Bank’s goals and strategies. The Board of Directors ensures that the Sharia Business Unit has adequate and effective supporting tools. The Board of Directors’ Charter is reviewed periodically. The most recent Charter was updated on 27 September 2019 and uploaded to the Bank’s website (www.cimbniaga.co.id). Board of Directors’ Charter and Bank Nomination Policy No. M.04, contains a policy on the resignation of members of the Board of Directors if they are involved in a financial crime and are proven to have made a mistake. |
| 1.2 Performance Assessment – Board of Directors and its Members | 1.2.1 The Board of Commissioners conducts an annual
formal evaluation in an objective and independent
manner to determine the effectiveness of the Board of
Directors and each individual Director. 1.2.2 The Board of Commissioners, with due observance of the Nomination and Remuneration Committee, is responsible for determining performance assessment criteria and assessing the performance of the President Director and other members of the Board of Directors. |
Apply The Bank has a policy to assess the performance of the Board of Directors, consisting of collegial assessment on the performance of the Board of Directors, conducted at least 1 (one) time a year and assessment on the individual performance of the Board of Directors, including the President Director, conducted at least 2 (two) times a year. The assessment results are discussed by the Nomination and Remuneration Committee to obtain input and recommendations before seeking approval from the Board of Commissioners. A more detailed explanation is provided in the discussion on the Performance Assessment of the Board of Commissioners and Board of Directors in this Annual Report. |
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| 1.3 Roles and Responsibilities of the Board of Commissioners | 1.3.1 The Board of Commissioners reviews the corporate
strategy at least annually and approves the corporate
mission, vision and strategy formulated by the Board
of Directors. The Board of Commissioners also reviews,
provides advice, and approves long-term business and
financial plans and the company’s short-term financial
plans. The Board of Commissioners provides advice and
monitors the Board of Directors on the management of
its implementation. The Board of Directors and Board
of Commissioners are involved in decisions that are
very important for the corporation, as regulated in the
articles of association of the company. 1.3.2 The types of decisions that require the approval of the Board of Commissioners must be disclosed in the annual report. 1.3.3 Taking into account the recommendation of the Nomination and Remuneration Committee, the Board of Commissioners proposes to, and to be resolved by, the GMS the appointment and/or dismissal of members of the Board of Directors and members of the Board of Commissioners. In proposing the above, the Board of Commissioners takes into account the diversity, non-discriminatory elements, as well as provides equal opportunities regardless of ethnicity, religion, race, class and gender. The Board of Commissioners ensures a formal and transparent selection and nomination process for members of the Board of Directors and members of the Board of Commissioners. 1.3.4 The Board of Commissioners or Committees conducting the nomination function formulate a succession policy in the process of nominating members of the Board of Directors. Every year, the Board of Commissioners reviews the report on the implementation of the development and succession plans submitted by the President Director. 1.3.5 The Board of Commissioners a). submit to the GMS, which may be preceded by recommendation from Committees conducting the remuneration function, the amount of remuneration for members of the Board of Directors and members of the Board of Commissioners, in line with sustainable corporate development and the long-term interests of the corporation and shareholders; b). periodically reviewing the remuneration system for the Board of Directors and Board of Commissioners. 1.3.6 The Board of Commissioners oversees the effectiveness of corporate governance policies and the implementation, as well as proposing changes if necessary. 1.3.7 The Board of Commissioners monitors and directs the company to implement the appropriate and effective risk management and internal control systems that are aligned with the corporate goals, objectives and strategies as well as complying with laws and regulations, codes of conduct, and applicable standards. 1.3.8 The Board of Commissioners supervises and directs the integrity of the corporate accounting and financial reporting system, as well as the independence of the internal and external audit functions. 1.3.9 The Board of Commissioners monitors, reviews, and approves the annual report and sustainability report of the company, and ensures their integrity, as well as oversees the company’s disclosure and communication process. 1.3.10 The charter of the Board of Commissioners is periodically reviewed. 1.3.11 The Board of Commissioners has a policy regarding the resignation of members of the Board of Commissioners if they are involved in financial crimes and are proven to have made a mistake. 1.3.12 Independent commissioners are highly expected to be able to contribute to honest, objective, active, and constructive discussions at meetings of the Board of Commissioners. 1.3.13 The President Commissioner acts as the coordinator of the Board of Commissioners and ensures its effectiveness. The President Commissioner promotes a culture of transparency and constructive dialogue that allows a variety of views to be expressed, including coordinating the setting of appropriate board meeting agendas and ensuring sufficient time is available to discuss all agenda items. In addition, there should also be opportunities for the Board of Commissioners to meet with the Board of Directors and senior management. |
Apply The Board of Commissioners together with the Board of Directors annually conducts studies and reviews on the suitability of the company’s vision and mission with the strategy, current condition of the company, and business challenges that will be faced in the future. The Board of Commissioners also reviews, provides advice, and approves business plans and long-term financial plans and short-term financial plans of the corporation and oversees the management of their implementation by the Board of Directors as presented in the discussion of the Bank’s Vision and Mission and Joint Meeting of the Board of Commissioners and Board of Directors in this Annual Report. Decisions taken by the Board of Commissioners have been presented in the discussion of the Board of Commissioners in this Annual Report. As stipulated in the Bank’s Nomination Policy No. M.04 and Bank Diversity Policy No. M.07, the Board of Commissioners plays an active role in the process of appointing and/or dismissing members of the Board of Directors and members of the Board of Commissioners, taking into account the recommendations of the Nomination & Remuneration Committee and diversity by providing equal opportunities regardless of ethnicity, religion, race, class and gender and carried out in a formal and transparent manner. In order to prepare for leadership regeneration, the Bank has established and implements a succession policy for the Board of Directors and/or Senior Management, which is part of the Nomination and Remuneration Committee Charter and the Bank’s Nomination Policy No.M.04 as stated in the Annual Report. The Nomination and Remuneration Committee discusses the remuneration for the Board of Commissioners and Board of Directors by taking into account information on the range and standard of remuneration with similar industries (peer groups) in the market and the capabilities of the Bank; The Nomination and Remuneration Committee provides recommendations for further discussion at the Board of Commissioners Meeting; The Board of Commissioners studies the recommendations from the Nomination and Remuneration Committee and proposes the remuneration to the GMS; and the GMS determines the remuneration for the Board of Commissioners, to then be implemented according to the resolution by the Board of Directors. The Board of Commissioners, either directly or through committees, always supervises and directs the policies and effectiveness of the implementation of governance, risk management and internal control systems carried out by management, and provides input and improvements if necessary. The Board of Commissioners always ensures the integrity of the accounting and financial reporting systems as well as the independence of the internal and external audit functions, which are reflected through the discussions on the Audit Committee and the Internal Audit Unit in this Annual Report. The preparation of the Annual Report and Sustainability Report is reviewed and approved by the Board of Commissioners. The Board of Commissioners’ Charter is periodically reviewed. The most recent Charter was updated on 17 January 2022 and uploaded to the Bank’s website (www.cimbniaga.co.id). The Board of Commissioners’ Charter and Bank Nomination Policy No. M.04 has regulated that members of the Board of Commissioners who are involved in financial crimes and/or other criminal acts must resign from their positions. All Independent Commissioners of the Bank have a credible track record and can contribute to the progress of the Bank. This is indicated by the percentage of attendance at the meetings of the Board of Commissioners and Committees, which is on average 100% and the performance assessment results for both the Board of Commissioners and Committees are satisfactory and exceptional. The Bank’s President Commissioner has duties and responsibilities, including coordinating the implementation of the duties and responsibilities of the Board of Commissioners, as well as providing recommendations for holding Meetings including the Meeting Agenda. In addition, joint meetings of the Board of Commissioners and Board of Directors are held regularly. |
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| 1.4 Establishment of Committees | 1.4.1 The Corporation has committees under the Board
of Commissioners, consisting of at least: the Audit
Committee, Nomination and Remuneration Committee,
and Risk Management Monitoring Committee. 1.4.2 The Board of Commissioners ensures that all members of the Audit Committee are independent and the majority of other committees established by the Board of Commissioners are independent parties, and all members of the committee are competent, committed, and have sufficient authority to perform their roles in an effective and independent manner. 1.4.3 To ensure the monitoring on the implementation of duties of the Audit Committee is carried out in an objective and independent manner, the President Commissioner is not allowed to be the chairman of the Audit Committee, except in extraordinary circumstances, which must be explained in the annual report. |
Apply Committees under the Board of Commissioners consist of the Audit Committee, the Risk Oversight Committee, the Nomination and Remuneration Committee, and the Integrated Governance Committee. All members of the Bank’s Audit Committee are Independent Commissioners and Independent Parties, and the chairman of the Audit Committee is held by one of the Independent Commissioners, namely Mr. Jeffrey Kairupan, who is not the President Commissioner. The composition of other committee members is also the majority of which are Independent Commissioners and Independent Parties. This is presented in more detail in the discussion of the Audit Committee and other committees, each separately in this Annual Report. |
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| 1.5 Performance Assessment – Board of Commissioners and its Members | 1.5.1 The Board of Commissioners conducts an annual formal evaluation objectively to determine the effectiveness of the Board, its committees, and each individual Commissioner. | Apply The performance assessment of the Board of Commissioners is carried out every year (at least once a year). The performance assessment on the Board of Commissioners (including the President Commissioner) uses several criteria as stated in the Annual Report. |
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| 1.6 Conflicts of Interest | 1.6.1 Members of the Board of Directors with concurrent
positions outside the corporation must obtain approval
from the Board of Commissioners. A Commissioner
notifies the Board of Commissioners and the chairman
of the committee carrying out the nomination function,
prior to accepting a new appointment as Director or
Commissioner of a public company, other Director
positions or other positions with a significant time
commitment. 1.6.2 The Board of Commissioners monitors and manages potential conflicts of interest for management, members of the Board of Directors, Board of Commissioners and shareholders, including misuse of corporate assets and misuse in related party transactions. Commissioners with conflicts of interest do not participate in monitoring and making decisions on potential conflicts of interest involving the Commissioners or affiliates of the Commissioners concerned. |
Apply There were no members of the Bank’s Board of Directors with concurrent positions outside CIMB Niaga, except for assignments to carry out oversight functions in subsidiaries. The assignment has been approved by the Board of Commissioners. Commissioners who receive appointments from other public companies, must convey this information to the Board of Commissioners and/or the Nomination and Remuneration Committee. One of the duties and responsibilities of the Board of Commissioners is to oversee and manage potential conflicts of interest of the Bank. In carrying out their duties and responsibilities, all members of the Board of Commissioners are committed to avoiding potential conflicts of interest or always position themselves not to be in the potential for conflicts of interest in any situation as stated in the Board of Commissioners’ Charter. In the event of a conflict of interest, members of the Board of Commissioners are prohibited from taking actions that may harm or reduce the Bank’s profits and must disclose the potential conflict of interest referred to in every decision. |
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| 1.7 Competency Improvement of Members of the Board of Directors and Board of Commissioners | 1.7.1 The Board of Commissioners ensures that members of the Board of Directors and Board of Commissioners understand their roles and responsibilities, characteristics and operations of the corporation, relevant laws and regulations and other applicable standards and obligations. The Board of Directors through the corporate secretary supports all members of the Board of Directors and Board of Commissioners in updating and refreshing the required skills and knowledge to carry out their roles on the Board. | Apply The Board of Commissioners and Board of Directors have participated in training and education with the aim of enhancing strategic capabilities, adding business knowledge, enhancing leadership, developing new skills, as well as improving and maintaining the quality of banking services. Details of training and education attended by the Board of Commissioners and Board of Directors are presented in the Annual Report. |
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| Principle 2: Composition and Remuneration of the Board of Directors and Board of Commissioners |
2.1 Composition of the Board of Directors and Board of Commissioners | 2.1.1 In determining prospective candidates for Directors,
the Board of Commissioners through the Nomination
and Remuneration Committee does not only rely on
recommendations from the Board of Commissioners,
management or majority shareholders. The Board
of Commissioners through the Nomination and
Remuneration Committee can use independent
sources to determine qualified candidates. 2.1.2 The Board of Commissioners ensures that the criteria for selecting members of the Board of Directors include at least the required knowledge, abilities, and expertise to properly meet the role of the Board of Directors and takes into account the fulfillment of the diversity of the Board of Directors. 2.1.3 The corporate policy regarding diversity among the Board of Directors and Board of Commissioners is disclosed in the Annual Report. 2.1.4. The Board of Commissioners ensures that the policies and procedures for the selection and nomination of Commissioners are clear and transparent in order to produce the desired Board composition. The Board of Commissioners uses independent sources to determine qualified candidates. 2.1.5. The Board of Commissioners/Committee that performs the nomination function establishes nomination procedures and criteria that are consistent with the Board of Commissioners’ expertise matrix, which has been approved by the Board of Commissioners and ensures that the candidate profile meets the established requirements in the expertise matrix and nomination criteria. 2.1.6. The composition of the Board of Commissioners must be formed in such a way that its members as a group reflect the diversity in terms of abilities, skills, knowledge, experience, age, cultural background, and gender needed to properly fulfill the role of the Board of Commissioners. 2.1.7. To enable the Board of Commissioners to provide independent advice and supervision to the Board of Directors and for roles with potentials for conflicts of interest, the Board of Commissioners consists of a sufficient number of Independent Commissioners, with a limited term of office and there is disclosure of the term of membership of the Board of Commissioners and their independence from a corporate perspective. 2.1.8. To facilitate the effective function of the Board of Directors and Board of Commissioners and to increase investor and stakeholder confidence, the Nomination and Remuneration Committee ensures that there is a formal, rigorous, and transparent process for the selection and appointment of members of the Board of Directors and Board of Commissioners. |
Apply As stipulated in the Nomination Policy No.M.04, which regulates the process of selecting, appointing, dismissing and/or replacing members of the Board of Commissioners, Board of Directors, and Independent Parties, the Bank may use the services of independent and reputable third parties (search firms) in the selection process for candidates of the Board of Commissioners. Third parties (search firms) appointed by the Bank will assist the selection process. The Nomination Policy also regulates the minimum criteria that must be possessed by candidates of the Bank’s Board of Commissioners and Board of Directors in terms of integrity, competence, reputation, domicile, independence, or other special criteria according to the respective field of each Director. The policy on the diversity of the composition of the Board of Commissioners and Board of Directors has been regulated in the Diversity Policy No. M.07 and the achievements have been presented in this Annual Report. The composition of the Board of Commissioners has met the needs of the Bank. The Bank has regulated the diversity of the composition of members of the Board of Commissioners and Board of Directors as stated in the Diversity Policy on the Composition of Members of the Board of Commissioners and Board of Directors No. M. 07 Versi 02.2020). The Nomination and Remuneration Committee performs the nomination function based on the procedures and nomination criteria set out in the Nomination Policy No. M.04 and approved by the Board of Commissioners. The Nomination and Remuneration Committee has also carried out its functions and responsibilities in ensuring that the nomination and remuneration process at the Bank runs properly and transparently in the interests of the Bank. This is illustrated in the discussion in this Annual Report. The implementation of duties of the Board of Commissioners, including the composition, term of office, independence, meeting attendance and training throughout the year are presented in detail in this Annual Report. |
| 2.2 Remuneration of the Board of Directors and Board of Commissioners | 2.2.1. The remuneration policy for members of the Board of
Directors consists of a remuneration structure that is
oriented towards sustainable corporate development
and encourages the achievement of long-term
goals. The Board of Directors’ remuneration must be
proposed, through the Nomination and Remuneration
Committee, by the Board of Commissioners to be
resolved by the GMS. The amount of remuneration
proposed to the GMS is determined by taking into
account the role of each member of the Board of
Directors and the economic situation as well as
corporate performance. 2.2.2. The remuneration policy for members of the Board of Commissioners consists of a remuneration structure that is oriented towards sustainable corporate development and encourages the achievement of longterm goals. The amount of remuneration proposed by the Board of Commissioners to the GMS is determined by taking into account the role of each member of the Board of Commissioners and the economic situation as well as corporate performance. In addition, consideration should also be given to his/her position as President Commissioner and chairman as well as membership in committees. 2.2.3. To ensure that the remuneration package is determined based on the achievements, qualifications, and competencies of the Directors and Commissioners by taking into account the performance of corporate operations, individual performance, and market conditions, the Nomination and Remuneration Committee ensures that there are fair and transparent procedures for establishing remuneration policies for members of the Board of Directors and Board of Commissioners. |
Apply The Bank has established and implements the Risk-Based Remuneration Policy No. A. 06.02. The Bank’s Remuneration Policy is reviewed periodically. Up to 2022, this policy is still relevant and does not need to be updated. The Bank’s remuneration policy is prepared by prioritizing a competitive, fair, and balanced remuneration system, based on the applicable laws and regulations. The Bank prepares the structure, policies and remuneration amount for each member of the Board of Commissioners by taking into account the duties, authorities, performance, and responsibilities of the Board of Commissioners. The Bank also takes into acocunt the remuneration that applies in similar industries (peer group) as well as the Bank’s capabilities. The Nomination and Remuneration Committee discusses the remuneration for the Board of Commissioners by taking into account information on the range and standards of remuneration with similar industries (peer groups) in the market and the capabilities of the Bank. The remuneration for the Board of Commissioners and Board of Directors is determined by the GMS. |
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| Principle 3: Work Relationship between the Board of Directors and Board of Commissioners |
3.1 Nature of Work Relationship | 3.1.1 There are open discussions between the Board of
Directors and the Board of Commissioners and between
members of the Board of Directors and members of the
Board of Commissioners. However, it is still important
to maintain the confidentiality of information to ensure
that confidential information does not leak. 3.1.2 In accordance with their respective duties and roles, the Board of Directors cooperates with the Board of Commissioners in formulating the corporate missions, visions and strategies, and regularly discusses the implementation. 3.1.3 The Corporate Secretary has a crucial role in supporting the effectiveness of the working relationship between the Board of Directors and the Board of Commissioners, encouraging the implementation of good corporate governance practices, including effective communication with shareholders and other stakeholders. |
Apply Discussions between the Board of Directors and the Board of Commissioners can be carried out through a joint meeting of the Board of Commissioners and Board of Directors. Through these meetings, the Board of Commissioners discusses various matters, including follow-up reports from the Minutes of Meeting of the Board of Commissioners; financial performance reports; and reports of committees under the Board of Commissioners. Every year, the Bank’s strategy and policies in the short and medium term are prepared in the form of a Corporate Plan and Bank Business Plan (RBB) in accordance with the established Vision and Mission. Periodically, the Board of Directors together with the Board of Commissioners along with the Bank’s senior management evaluate the Bank’s strategy and policies and the implementation at all levels of the organization. The Bank appointed Fransiska Oei as Corporate Secretary based on CIMB Niaga’s Board of Directors’ Circular Resolution No.001/SIR/DIR/IX/2016 dated 21 September 2016. The Bank’s Corporate Secretary is responsible for maintaining the Bank’s image and protecting the interests of the Bank by establishing good communication and relations with all parties, as well as acting as a liaison between the Bank and Shareholders and other Stakeholders. |
| 3.2 Access to Information for the Board of Commissioners | 3.2.1 The Board of Directors is responsible for ensuring that the Board of Commissioners has access to accurate, relevant, and timely information. The Board of Commissioners itself ensures that it obtains sufficient information. The Board of Directors provides information to the Board of Commissioners regularly, without delay, and comprehensively on all matters relevant to the corporation. The Board of Commissioners may at any time request additional information to the Board of Directors. | Apply The Board of Commissioners can interact with the Board of Directors both directly and through the Joint Meeting of the Board of Commissioners and Board of Directors, which are scheduled at the beginning of the year or also ad-hoc if there is material information/events that must be submitted to the Board of Commissioners. The Corporate Secretary also assists the Board of Directors in providing access to accurate, relevant, and timely information to the Board of Commissioners, including invitations and materials for the Board of Commissioners’ meetings which must be submitted to the participants of the Board of Commissioners’ meeting no later than 5 (five) working days prior to the meeting. The Corporate Secretary also administers, distributes, and follows up incoming letters received by the Bank and addressed to the Board of Directors and/or Board of Commissioners. |
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| 3.3 Responsibilities of the Board of Directors and Board of Commissioners on Impacts of the Structure | 3.3.1 The impact of the ownership structure on the corporation. The Board of Directors and the Board of Commissioners consider their responsibilities in the context of the shareholding structure and relationships between corporate shareholders, which may have an impact on corporate management and operations. | Apply The Bank’s Board of Directors and Board of Commissioners ensure that the shareholder structure and relations between shareholders do not affect the implementation of the roles and responsibilities of the Bank’s Board of Directors and Board of Commissioners. All decisions and policies made by the Bank’s Board of Directors and Board of Commissioners are taken independently and transparently for the benefit of the Bank. |
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| Principle 4: Ethical and Responsible Conduct |
4.1 Code of Conduct | 4.1.1 This statement is set forth in the Code of Conduct and
Business Ethics, which must clearly state the corporate
expectation that each member of the Board of Directors
and Board of Commissioners and employees will:
4.1.2 The Board of Directors establishes policies and practices on anti-money laundering and financing of terrorism, anti-bribery, anti-corruption, anti-fraud, political involvement with reference to the national or international standards regarding anti-money laundering, anti-bribery, anti-corruption, anti-fraud or other related standards. |
Apply The Bank has a Employee Code of Ethics & Conducts and AntiBribery and Corruption Policy No. M.11 which must be adhered to by the Board of Directors, Board of Commissioners and all employees. The implementation and implementation of the Employee Code of Ethics & Conduct and Anti-Bribery and Corruption Policy is the responsibility of all management and employees at all levels of the organization as outlined in the Declaration of Integrity Pact, Code of Ethics, and Commitment to Anti-Bribery and Corruption that are signed by the Board of Directors and Board of Commissioners and attested by all employees every year. More detailed information is presented in this Annual Report. |
| 4.2 Corporate Values and Culture | 4.2.1 The corporation articulates, fosters, and discloses corporate culture and values | Apply The Bank implements new values and culture, namely EPICC to ensure that every CIMB Niaga personnel can carry out the Bank’s operations properly and prevent various acts of fraud, money laundering and financing of terrorism, anti-corruption, offering or receiving bribes and payments or other inducements to commit acts that violates laws and regulations or is unethical. The internalization process for corporate values and culture in daily work life that has been carried out by the Bank is presented in the discussion of Corporate Values and Culture in this Annual Report. |
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| 4.3 Enforcement and Communication of the Code of Ethics, Values, and Culture | 4.3.1 The corporate code of conduct and code of ethics are communicated effectively to the Board of Directors, Board of Commissioners and all employees, integrated into corporate strategy and operations, including risk management system and remuneration structure, as well as being enforced. | Apply Internalization of the Employee Code of Ethics & Conduct is regularly carried out through various available media to raise awareness and understanding to implement behavior that is in line with the Bank’s core values. Every year, members of the Board of Commissioners and Board of Directors sign the Integrity Pact, Code of Ethics, and Anti-Bribery and Corruption Commitment, followed by attestation of the pact by all Bank employees. More detailed information is presented in this Annual Report. |
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| Principle 5: Risk Management, Internal Control, and Compliance |
5.1 Internal Control and Compliance | 5.1.1 The Board of Directors periodically reviews the accuracy of designs and operational effectiveness of the governance system, risk management, internal control, and corporate compliance and reports the implementation and results of the review to shareholders through the annual report of the Corporation. | Apply The Board of Directors has implemented the Internal Control System in accordance with the overall principles of control and evaluation carried out by the Bank, which indicate that the quality of the Bank’s Internal Control System is running properly. The Board of Directors and Board of Commissioners state that the Bank has an effective and adequate internal control system in managing the risks faced by the Bank while remaining within the tolerance limit (risk appetite) in supporting the achievement of the Bank’s objectives, which has been conveyed in the discussion of the Risk Oversight Committee and the Internal Control System in this Annual Report. |
| 5.2. Risk Management | 5.2.1. Strategy and risk is a unity, disclosed in a transparent
manner, included in the implementation of the duties
and responsibilities of the Board of Directors and the
Board of Commissioners, as well as in discussions at the
meetings of the Board of Commissioners and Board of
Directors. 5.2.2. The Risk Management Oversight Committee assists the implementation of the duties of the Board of Commissioners by creating a transparent, focused, and independent mechanism for oversight of corporate risk management. |
Apply The Board of Commissioners and Board of Directors always manage and monitor the main risks of the Bank properly. Balancing between risk, compliance culture and capital adequacy is also a strategic policy pillar of the Bank. The Board of Commissioners and Board of Directors are assisted by the Risk Oversight Committee and Risk Management Committee, which regularly monitor and review the effectiveness of risk control and management at each meeting, also assisted by the Internal Audit Unit. The Board of Commissioners has established the Risk Oversight Committee (ROC), which consists of Independent Commissioners and Independent Parties who are competent and have backgrounds in accordance with the regulations and needs of the Bank. The ROC helps ensure that the implementation of the Bank’s risk management still meets the elements of adequacy of risk management procedures and methodologies, enabling the Bank’s business activities to remain under control at acceptable limits while still profitable for the Bank. More detailed information is presented in this Annual Report. |
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| 5.3. Integration of Governance, Risk Management, and Compliance | 5.3.1 The Board of Directors establishes an integrated
governance, risk management and compliance
(GRC) system, by handling various uncertainties in an
integrated manner and with high integrity, to ensure
that the corporation can achieve its objectives. 5.3.2 The Board of Directors ensures that the division in charge of the compliance function does not concurrently carry out functions that have the potential to cause a conflict of interest. |
Apply Through the Three Lines of Defense, the Board of Directors ensures coordination and capacity building among the main GRC systems, which include governance systems, strategic management, performance management, risk management, compliance management, and internal audit systems to ensure that the corporation stays on the right track in achieving its goals. The Compliance Director also does not concurrently carry out functions that have the potential to cause a conflict of interest as described in the Bank’s Organizational Structure in this Annual Report. Proper GRC implementation is reflected in the various awards received by the Bank in 2022, namely ASEAN Top 20 PLCs and Indonesia Top 3 PLCs in the 2021 ASEAN Corporate Governance Scorecard Award, Top GRC & The Best GRC Overall (5 Stars) at the 2022 TOP GRC Award and the 2022 GRC & Performance Excellence Award. |
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| 5.4. Internal Audit | 5.4.1 The Board of Commissioners through the Audit Committee oversees and ensures that the internal audit function assists the corporation in achieving its goals through an objective and disciplined approach in order to evaluate and improve the effectiveness of risk management, internal control, and corporate governance. | Apply The Board of Commissioners has established the Audit Committee, which ensures that the internal audit duties are carried out objectively and independently. The appointment and dismissal of the Chief Audit Executive also takes into account recommendations from the Audit Committee, and internal audit has direct access to the Audit Committee. More detailed information is presented in this Annual Report. |
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| Principle 6: Disclosure and Transparency |
6.1 Policy on Disclosure | 6.1.1 The corporation has disclosure and transparency
policies and procedures that ensure the disclosure
of material information and safeguard sensitive
information as well as corporate secrets. 6.1.2 Shareholders’ right to obtain regularly and timely relevant material information regarding the corporation must be met. |
Apply The Bank has Corporate Governance Policy No. M.12 and Policy on Communication with Shareholders and Investors No. M.02, which regulate the disclosure of material information and safeguarding sensitive and confidential information, as well as the obligation to disclose/disclosure of information based on applicable regulations. The Bank ensures that all shareholders have the same rights in receiving material information correctly, timely, periodically, and according to applicable regulations. |
| 6.2 Financial and Sustainability Reports | 6.2.1 The corporation discloses systems and procedures
to ensure that interim financial reports that are not
materially audited or reviewed by external auditors are
accurate, complete, and provide investors with the right
information to make the right investment decisions. 6.2.2 The Audit Committee ensures the quality of audits on financial report carried out by external auditors. This activity includes recommending the appointment, reappointment and, if necessary, the termination and remuneration of the external auditor. 6.2.3 The sustainability report shall be prepared and disclosed accurately and in accordance with national or international sustainability reporting frameworks. 6.2.4 The corporation issues an integrated annual report that places historical performance into context and describes the risks, opportunities, and prospects of the corporation in the future, which will subsequently assist shareholders and stakeholders to understand the strategic goals of the corporation and its progress in creating sustainable value. |
Apply The Bank has systems and procedures to regulate internal control over financial reporting, including interim financial reports, the role of the risk management/compliance/supervision management function and the internal audit function to ensure the integrity of interim financial reports, and the role of the Audit Committee in reviewing financial reports to be published by the Bank. The Bank’s Audit Committee ensures the quality of financial statement audits carried out by external auditors. This activity includes recommending the appointment, reappointment and, if necessary, the termination and remuneration of the external auditor. The Bank’s Sustainability Report adopts international standards, such as the GRI, SASB, SUSBA, and others. The report is also provided with assurance by an independent and competent external party. The Bank’s Annual Report has put historical performance in context and describes the risks, opportunities, and future prospects of the corporation. |
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| 6.3 Dissemination of Information | 6.3.1 Channels for the dissemination of information should
provide users with equitable, timely, and relatively
inexpensive access to relevant information. 6.3.2 The corporation ensures that an annual statement on the implementation of the Indonesian General Guidelines for Corporate Governance, including an explanation on the implementation of each Recommendation and Guideline is available on the website for a minimum period of five years 6.3.3 For corporations listed on the capital market in jurisdictions other than the jurisdiction of origin, applicable laws and regulations on corporate governance must be clearly disclosed. In the case of cross listing, the criteria and procedures for cross listing, criteria and procedures for recognizing the listing requirements for the primary listing must be transparent and documented |
Apply The Bank regularly updates and provides easy access to information regarding its activities and performance to stakeholders, allowing them to be informed about the condition of the Bank in a clear and transparent manner. Various communication channels that are available include social media, website, email blasts, and public exposure for customers and the public, press releases, as well as a special internal communication channel for CIMB Niaga employees, including:
A statement on the implementation of PUGKI is available on the Bank’s website. |
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| Principle 7: protection of the Rights of Shareholders |
7.1 Rights of Shareholders | 7.1.1 The corporation has a communication policy that
facilitates and encourages shareholder or investor
participation. 7.1.2 Corporations that are parent entities ensure that their corporate governance policies apply to subsidiaries and entities under common control in which their investment is significant. 7.1.3 Corporations have rules and procedures that govern acquisitions, takeovers, and extraordinary transactions, such as mergers and sales of substantial corporate assets to ensure the transactions occur in a transparent manner and under reasonable conditions as well as protecting the rights of all shareholders according to class. |
Apply The Bank has established a Policy on Communication with Shareholders and Investors No.M.02, which can be used as a reference for subsidiaries and can be accessed by the public through the Bank’s website. The rights, authorization, and responsibilities of shareholders are also regulated in detail in CIMB Niaga’s Articles of Association, which can also be accessed on the Bank’s website (www.cimbniaga.co.id). |
| 7.2 Fair Treatment of Shareholders | 7.2.1 Corporations have rules and procedures that ensure a).
all shareholders of the same series in one class of shares
must be treated equally, b). disclosure of said rules and
procedures, as well as disclosure of capital structure
and arrangements that allow certain shareholders to
gain influence or control that is disproportionate to
their share ownership. 7.2.2 The corporation has rules and procedures that ensure related party transactions are approved and carried out in such a way as to ensure that conflicts of interest are properly managed, and protect the interests of the corporation and shareholders. 7.2.3 The corporation has established and discloses policies to prevent insider trading. The corporation has clear rules regarding any trading in corporate shares carried out by Directors, Commissioners, and insiders to ensure that no one can benefit directly or indirectly from information that is not/not yet available on the market. |
Apply Pursuant to the Bank’s Articles of Association, the Bank’s shares consist of class A shares and class B shares. Class A and class B shareholders have the same rights, namely each share has the right to 1 (one) vote. The Bank always ensures that related party transactions that are carried out, do not have conflicts of interest and the interests of the Bank and shareholders are protected. One of the disclosures to prevent insider trading is contained in the Employee Code of Ethics & Conduct. The Bank also has established the CIMB Niaga Conflict Management Policy, which regulates the procedures for trading the securities of the Bank and CIMB Group and to reaffirm the prohibition on the use of Insider Information (Insider Trading) in private securities transactions by employees and members of the Bank’s Board of Commissioners and Board of Directors. |
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| 7.3 General Meeting of Shareholders | 7.3.1 The corporation implement the notice for GMS with
the agenda and materials for the GMS as completely
and as early as possible (no later than 28 days prior
to the GMS) to provide sufficient time and material for
shareholders to properly study the meeting agenda.
Meeting invitations and all GMS information are
disclosed through electronic means, such as through
the corporate website. 7.3.2 The corporation has established and disclosed rules and procedures that facilitate shareholders to participate and vote effectively at the GMS. 7.3.3 Shareholders participate effectively to determine the appointment of members of the Board of Directors and Board of Commissioners. 7.3.4 The corporation ensures the transparency and accountability of the external auditor at the GMS. 7.3.5 Submission of voting results and a complete summary of the minutes of the GMS will be announced to the public on the following working day. |
Apply The Bank implements the Invitation for the GMS no later than 28 (twenty-eight) days prior to the GMS, excluding the date of the invitation and implementation for the GMS, complete with the agenda and material for the GMS on the Bank’s website. The GMS decision-making/voting mechanism is presented in the GMS Rules, which are posted on the Bank’s website and read back by the Corporate Secretary at the commencement of the GMS. Voting is carried out for each AGMS agenda (one decision) and appoints independent parties, namely PT Bima Registra and Notary Ashoya Ratam, SH to carry out the vote calculation. Curriculum vitae of candidates for members of the Board of Directors and Board of Commissioners as well as external auditors have been submitted together with the Invitation to the AGMS to the public via the Bank’s website, and voting is also carried out separately for each candidate. The voting results and the complete summary of the minutes of the Bank’s GMS are announced to the public on the same day after the completion of the GMS via the Bank’s website. More detailed information is presented in the GMS discussion in this Annual Report. |
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| Principle 8: Appreciation for Stakeholders |
8.1 Stakeholders Engagement | 8.1.1 The corporation through the Corporate Secretary carries out regular, transparent, and effective communication with key stakeholders as well as involves them to understand their hopes and complaints as well as the impact of the corporation on them. | Apply The Bank discloses the process of identifying and selecting key stakeholders to be involved, which has been disclosed in the Sustainability Report. The Bank also has established a Whistleblowing System as a means of conveying suggestions, input and complaints in a safe and independent manner. |
| 8.2 Integration of Sustainability in Business Models | 8.2.1 The Board of Commissioners together with the Board of Directors are responsible, accountable and transparent for sustainability governance, including in terms of establishing corporate sustainability strategies, priorities and targets. The Board of Directors and Board of Commissioners incorporate sustainability considerations when carrying out their roles, including by developing and implementing corporate strategies, business plans, main action plans, and risk management. | Apply The Board of Directors ensures that corporate sustainability strategies, priorities, and targets, as well as performance against these targets are communicated to stakeholders as reported in this Annual Report. |
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| 8.3 Protection for Stakeholders | 8.3.1 The Board of Directors ensures and discloses that
corporate operations reflect the application of
high standards of ethics, social and environmental
responsibility throughout the corporation and
ensures that appropriate policies and procedures are
implemented to respect and comply with the rights of
stakeholders. 8.3.2 The Board of Directors encourages employees to work for the long-term interests of the corporation and prioritizes sustainability. |
Apply The Bank has various policies as guidelines in carrying out business operations that are ethical, socially and environmentally responsible, and respecting and complying with the rights of stakeholders. This is presented in full in the Bank’s Annual Report and Sustainability Report. The Bank also has a policy on providing long-term incentives, namely share-based compensation to employees, which encourages sustainable value creation as presented in the Remuneration Policy discussion in this Annual Report. |