Public investors will no longer be able to scrutinize the nominees for the boards of directors of the countryâs publicly listed state-controlled companies, as their track records will only be made public on the day they are elected
ublic investors will no longer be able to scrutinize the nominees for the boards of directors of the country's publicly listed state-controlled companies, as their track records will only be made public on the day they are elected.
According to a new regulation issued by the State-Owned Enterprises Ministry, publicly listed state-owned enterprises (SOEs) may not release the CVs of candidates for the board of directors before the annual general shareholders' meetings (AGSM) to elect them are held. This regulation is contrary to what the Financial Services Authority (OJK) has regulated.
By issuing the regulation, the ministry has closed the doors on public investors wanting to know more about the respective SOE's future management and leadership, and the decision may be seen as a setback to the OJK's efforts to step up transparency and good corporate governance among listed companies.
An OJK regulation on listed firms' AGSMs ' issued on Dec. 8, 2014 ' says that the CVs must be made available on the firm's website as soon as the meeting is officially announced.
At the time, OJK commissioner for capital market supervision Nurhaida said that the regulation was expected to provide a better insight for shareholders into the company in which they invest.
A number of listed SOEs, including some of the country's largest banks, are scheduled to undergo leadership changes during their AGSMs this year.
Bank Mandiri's shareholders' meeting is slated to take place on March 16, while those of Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) will take place on March 17 and 19, respectively.
BNI, for example, will see wholesale changes in its management, as all of its 10 directors are ending their terms this year, with only four eligible to be reappointed for a second term.
Gatot Suwondo, president director, and Felia Salim, vice president director, are among those that cannot be reelected.
BRI's board of directors will welcome new members as well after former president director Sofyan Basir and operational director Sarwono Sudarto left for state electricity firm PLN in December, and credit-risk control chief Lenny Sugihat left for the State Logistics Agency (Bulog), also in December.
Meanwhile, five of Mandiri's 11 directors are ending their terms, but consumer banking director Abdul Rachman is listed as the only executive who cannot be reappointed.
OJK commissioner for banking supervision Nelson Tampubolon acknowledged that the CV issue was of special concern to the ministry. 'There are a lot of factors to consider when it comes to a government-owned entity,' he said in a text message.
Contacted separately, Hambra Samal, the ministry's legal office head, argued that it took longer to select new directors for SOEs than for private firms.
'We have to find the right candidates and in some cases, submit the names to the TPA [final assessment team] for a final decision,' he said during a telephone interview.
The TPA was initiated by former president Susilo Bambang Yudhoyono to enforce stricter selection of SOE management, especially the management of SOEs that are deemed 'strategic and profitable'.
The team includes the president, the vice president, the finance minister, the state-owned enterprises minister and other officials at related ministries.
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.