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Jakarta Post

Punishing CEO for violating duty of good faith

  • Ulya Yasmine Prisandani

Jakarta   /   Wed, January 15 2020   /  01:50 am

The public was shocked by the recent dismissal of I Gusti Ngurah Askhara Danadiputra as president director of national flag carrier Garuda Indonesia following allegations that he smuggled a disassembled Harley-Davidson motorcycle and two Brompton folding bicycles on board a new Airbus A330-900 plane and manipulated the company’s financial report in 2018. As fiduciaries, the board of directors is responsible for managing the company based on its business judgment rules. This power is stipulated under Law No. 40/2007 on limited liability companies, which states that such power must be in line with the purposes and objectives of the company and within the limits set forth under the laws and regulations and/or its articles of association.With great power comes great responsibility, and in this regard, the responsibility is mainly owed to the government as the majority shareholder of the ai...