GCG Self Assessment

GCG Implementation Assessment

CIMB Niaga evaluates the quality of GCG implementation on an ongoing basis, independently (self-assessment), and in collaboration with third parties to obtain more independent assessment results.

SELF-ASSESSMENT

PROCEDURE

CIMB Niaga conducts a self-assessment on the implementation of Governance principles every semester in accordance with the provisions of OJK Regulation No. 55/ POJK.03/2016 and OJK Circular Letter No. 13/POJK.03/2017 on the Implementation of Governance for Commercial Banks. Governance principles consist of Transparency, Accountability, Responsibility, Independence, and Fairness and Equality at all levels of the organization and operational activities of the Bank. The assessment is carried out in a comprehensive and structured manner on implementing the principles of Governance, which includes 3 (three) aspects, namely: Structure, Process, and Results.

  1. Governance Structure
    The Bank assesses the adequacy of its Governance structure and infrastructure in generating results (outcomes) that are in accordance with stakeholders' expectations.

  2. Governance Process
    The Bank assesses the effectiveness of implementing the principles of Good Governance as supported by the adequacy of structure and infrastructure to generate results that align with stakeholders' expectations.

  3. Governance Outcome
    The Bank assesses the quality of Governance outcomes to determine that the Governance structures and processes have been carried out properly and are in line with stakeholders' expectations.

ASSESSMENT CRITERIA

In the self-assessment process, there are 11 (eleven) factors for Governance 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 duty implementation of Committees.
  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 internal control system.
  9. Provision of funds for related parties, and large exposures.
  10. Transparency of the Bank’s financial and nonfinancial conditions, GCG implementation report, and internal reporting.
  11. Strategic plan of the Bank.

In addition to the above 11 factors, the assessment is also conducted on other relevant and significant aspects of Governance implementation. The outcome of the selfassessment is based on the results of questionnaires from selected respondents and incorporates findings from within the Bank based on the questionnaire results. The findings are gathered from various units in the Bank. Among them is the self-assessment outcome of each unit, information from the Internal Audit, Anti-fraud Management, Risk Management, Human Resources, Compliance, and others unit, including findings from regulators.

PARTIES CONDUCTING THE ASSESSMENT

The self-assessment process involves the Board of Commissioners, Board of Directors, Independent Parties, and Executive Officers of the Bank to generate a comprehensive and structured evaluation of the effectiveness of the Governance system and quality of the Bank’s Governance outcome. The self-assessment is also conducted on GCG implementation within the subsidiaries as stipulated by the financing and capital market sector authorities. Results of the subsidiary self-assessment are then consolidated using an internal methodology based on materiality and significance.

ASSESSMENT RESULT

The following is the GCG self-assessment results in Semesters I and II of 2022 , individually and consolidated:

GCG Implementation Self-Assessment Results
Entity Rank Rank Definition
Bank CIMB Niaga (Individually) 2 Bank Governance Rating is 2 (GOOD), which reflects that Bank 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) 2 CNS Governance Rating is 2 (GOOD), which reflects that governance in CNS has been implemented well, where most of the governance indicators has been fulfilled.
Consolidated 2 Consolidated Governance Rating is 2 (GOOD), which reflects that management of the Bank and subsidiaries have adequately applied the Good Governance principles.

The Bank’s subsidiaries, CNAF and CNS, have also carried out a GCG self-assessment in 2022 in accordance with OJK Governance provisions related to their business activities as a Financing Company and Securities Company.

RECOMMENDATION AND FOLLOW-UP

In 2022, CIMB Niaga GCG implementation, for bank-only and in a consolidated manner, achieved an overall rating of 2 (Good). Based on this outcome, the Bank and its subsidiaries are deemed adequate in applying Governance principles in general, despite several identifiable weaknesses in the Governance aspect.

Recommendations for the 2022 self-assessment include strengthening the governance process to support an effective internal control system and maintain risk governance. The Bank and its subsidiaries will follow up on these recommendations.

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