GCG Self Assessment

GCG Implementation Assessment

CIMB Niaga periodically assesses the quality of the Bank’s GCG implementation, both independently (self-assessment) and in collaboration with third parties, to acquire more independent assessment results. The assessment is expected to ensure that CIMB Niaga complies with applicable business ethics standards, regulations, and policies, subsequently creating a high level of transparency in the Bank’s decisions and actions.

SELF-ASSESSMENT

PROCEDURE

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

  1. Governance Structure
    The objective of the assessment of Governance structure is to assess the adequacy of the Bank’s Governance structure and infrastructure to ensure that the process of Good Governance principles generate outcomes that are in accordance with the expectations of stakeholders.

  2. Governance Process
    The objective of the assessment of the Governance process is to assess the effectiveness of the process of implementing Good Governance principles that is supported by the adequacy of the Bank’s structure and infrastructure, to generate outcomes that meet the expectation of stakeholders.

  3. Governance Outcome
    The objective of the assessment of the Governance result is to assess the quality of outcomes (including the qualitative and quantitative aspects), which are the result of the process of implementing Good Governance principles, supported by the adequacy of the Bank’ structure and infrastructure.

ASSESSMENT CRITERIA

According to OJK Circular Letter No. 13/POJK.03/2017 which is still applicable for the assessment as of December 2024, the Governance assessment criteria for self-assessment includes 11 (eleven) assessment factors, namely:

  1. Implementation of duties and responsibilities of the Board of Directors.
  2. Implementation of duties and responsibilities of the Board of Commissioners.
  3. Completeness and implementation of the Committees’ duties.
  4. Management of conflicts 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 an internal control system.
  9. Provision of funds to related parties and large exposure.
  10. Transparency of the Bank’s financial and non-financial conditions, governance implementation report, and internal reporting.
  11. Bank’s strategic plan.

The assessment is also conducted on other relevant and significant aspects of Governance implementation. The final outcomes of the assessment of the implementation of Bank’s Governance are based on the results of questionnaires distributed to selected respondents, and findings from within the Bank are incorporated based on the results of the questionnaire. 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 findings from the regulators.

PARTIES CONDUCTING THE ASSESSMENT

Self-assessment involves the active role of the Board of Commissioners, Board of Directors, Independent Parties, and Executive Officers of the Bank to provide a comprehensive and structured assessment of the effectiveness of its Governance. The self-assessment is also performed on governance implementation in subsidiaries in accordance with the provisions of regulators in the financing and capital market sectors. The results of the subsidiaries’ self-assessment are consolidated using internal methodologies based on materiality and significance.

ASSESSMENT RESULT

The results of individual and consolidated Bank’s GCG self-assessments for the 1st and 2nd semester of 2024:

GCG Implementation Self-Assessment Results
Entity Rating Rating 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

In 2024, CIMB Niaga's GCG implementation achieved a rating of 2 (Good), both for bank-only and in a consolidated manner. 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 2024 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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