GCG Self Assessment

SELF-ASSESSMENT

In support of the quality of GCG implementation, the Bank performs GCG self-assessment involving the evaluation by the Board of Commissioners and Independent Parties, the Board of Directors, Executive Officers and independent functions. CIMB Niaga conducts self-assessment on the implementation of Governance principles of Transparency, Accountability, Responsibility, Independence, and Fairness and Equality in the Bank’s operational activities, which are carried out every semester, as stipulated in POJK No. 55 / POJK.03 / 2016 and SEOJK No. 13 / POJK.03 / 2017 concerning Implementation of Governance for Commercial Banks.

PROCEDURES

The Bank perform a comprehensive and structured self-assessment integrated into the 3 (three) aspects of Governance, which are:

  1. Governance Structure
    The assessment of the Governance structure aims at evaluating the adequacy of the Bank’s Governance structure and infrastructure. A Governance structure and infrastructure that are in accordance with the principles of Good Corporate Governance will produce results that are in line with the expectations of the Bank’s stakeholders.

  2. Governance Process
    The assessment of the Governance process aims at evaluating the effectiveness of the Bank’s implementation of the Governance principles. Alongside an adequate Governance structure and infrastructure, good Governance processes are expected to enable the Bank to perform according to the expectations of stakeholders.

  3. Governance Outcome
    The assessment of the Governance outcome aims at evaluating the quality of the Bank’s outcome, qualitatively as well as quantitatively, which is the result of the proper process of Good Corporate Governance implementation supported by adequate Governance structure and infrastructure.

ASSESSMENT CRITERIA

Self-assessment is conducted periodically on GCG principles comprising the following 11 factors of governance assessment:

  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. Completion and duties execution of the Committees.

  4. Management of conflict of interest.

  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 related parties and large exposures.

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

  11. Bank’s strategic plan.

The Bank also consider other information related to Governance implementation, outside the above 11 assessment factors.

The end result of the Bank’s assessment of Governance implementation is based on the results of questionnaire to selected respondents and by factoring-in findings within the Bank with the questionnaire results. These findings are compiled from various units in the Bank, such as Internal Audit, Anti-Fraud Management, Risk Management, Human Resources, Compliance and others, and also include findings from regulators.

PARTIES CONDUCTING THE ASSESSMENT

The self-assessment of the Governance implementation for Bank-only involves the Board of Commissioners, Board of Directors, Independent Parties, and Executive Officers of the Bank, to arrive at a comprehensive and well-stricture evaluation on the effectiveness and quality of the Bank’s Governance systems and outcomes. In the consolidated Governance assessment, each subsidiary conducts a Governance self-assessment as stipulated by the respective capital market and financing sector authorities. Results of the subsidiary self-assessment are then consolidated using an internal methodology based on materiality and significance.

ASSESSMENT RESULT

The result of the GCG self-assessment for Semester I and Semester II 2020, for bank-only and consolidated with subsidiaries, is 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.

In 2020, CNAF and CNS also conduct the GCG self-assessment in accordance with OJK Governance provisions related to its business activities as a Financing Company and Securities Company.

RECOMMENDATIONS AND FOLLOW-UP

In 2020, the self-assessment of CIMB Niaga’s Governance, for bank-only and in a consolidated manner, achieved an overall rating of 2 (Good). This means that, in general, the Bank and its subsidiaries are deemed adequate in applying the principles of Governance, despite of a number of weaknesses identified in the aspect of Governance. The management of the Bank and its subsidiaries are able implement good corporate governance. The Bank and its subsidiaries are committed to implementing the principles of Governance in their activities to achieve business sustainability.

From the results of the self-assessment in 2020, the Bank and subsidiaries have identified a number of weaknesses to be followed-up, including improvement to a number of internal regulations, and strengthening the governance process in support of a more effective internal control system.