OJK chief Muliaman H. Hadad.(Kompas/Heru Sri Kumoro)

The Financial Services Authority (OJK) is determined to be a role model of good governance in the financial industry, a senior official has said.

OJK chief Muliaman H. Hadad said the implementation of good governance in the financial sector was the key to the economic development of a nation, as companies that implemented good governance usually saw good performances. Good governance could also act as a cushion against the impact of financial crisis, he added.

"Companies that are able to pass through a crisis are companies that implement good governance. Therefore, good governance is important because it is directly associated with the performance of a company," said Muliaman, at the Risk and Governance Summit 2015 in Jakarta on Tuesday.

As the regulatory and supervisory authority of Indonesia's financial services institutions, said Muliaman, the OJK had to oversee the management of extensive financial assets, amounting to as much as Rp 13.37 quadrillion (US$973.4 billion).

"To support this function, good governance implementation at the OJK is a necessity," he said.

Until the first half of 2015, total assets of commercial banks amounted to Rp 5.79 quadrillion, or 55 percent of gross domestic product (GDP). In the capital market, the capitalization of shares on the Indonesia Stock Exchange, up to July this year, amounted to Rp 4.52 quadrillion, or about 43 percent of GDP, while the capitalization of bonds amounted to US$1.66 billion, or 16 percent of GDP.

In the non-bank financial industry, insurance company assets amounted to Rp 777 trillion in the first half of 2015, asset finance company assets amounted to Rp 435 billion and assets of pension funds amounted to Rp 195 trillion.

OJK commissioner Ilya Avianti said the implementation of good governance had been integrated to the OJK's program. Several strategic initiatives had also been taken, such as the creation of its good governance implementation roadmap.

Ilya further said that this year was the OJK's strengthening-of-integrity year, which was happening through three main programs: optimizing the anti-fraud unit, revitalizing whistle-blower systems and implementing a bribery control program.

"Currently there are 60 complaints in our whistle blowing system. We are still analyzing six of them and will follow those up if the reported actions are deemed unethical," she said.

In an effort to promote good governance implementation in the financial sector, the OJK held the Risk and Governance Summit 2015 to increase industrial capacity through the improvement of professionalism. This forum is part of the OJK's effort to go beyond simply regulating and supervising the financial services industry.

"We want to emphasize the role of culture in good governance implementation," she said. (ebf)(+)

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