Advertorial: PT Aneka Tambang
\nPublication: July 26 - Friday<\/p>\n
Antam committed to good corporate governance<\/p>\n
The recent string of financial scandals in the United States
\nhas clearly taught a valuable lesson to every company throughout
\nthe world on the importance of good corporate governance.<\/p>\n
Market valuations are plummeting as investors direct funds
\naway from equity rather than risk buying stock in corrupt and
\ndishonest companies. Investors are wary of the next corporate
\nscandal brought on by poor governance, and currently no amount of
\npositive news of economic recovery will entice them back.<\/p>\n
This negative sentiment towards the stock market has spilled
\nover to Asia, although the fallout has been far less pronounced
\nas most investors already discount the risk of corruption, false
\nreporting, and non-conducive factors such as a poor judicial
\nsystem.<\/p>\n
In Asia, finding a company which is run using effective
\ndecision-making in consideration of the best interests of the
\ncompany and its stakeholders can be difficult. This is also true
\nof Indonesian companies, particularly state-owned enterprises.<\/p>\n
Most people see them as corrupt and lacking transparency.
\nHowever, for state-held diversified mining company PT Antam Tbk
\n(Antam), good governance is a top priority and in terms of
\ntransparency, the company meets international standards.<\/p>\n
As would-be equity investors intensify the search for high
\nstandards of governance, and begin to look more towards Asia,
\nthose companies with strong fundamentals and good governance have
\nan opportunity to see their market valuation increase.<\/p>\n
This is supported by a survey in the most recent McKinsey
\nQuarterly, which states, \"In emerging as in developed markets,
\ncompanies that adopt strict corporate-governance practices are
\nbeing rewarded by institutional investors.\"<\/p>\n
Antam made improving corporate governance a priority when it
\nlisted on the Jakarta Stock Exchange (JSX) in 1997 and then dual-
\nlisted on the Australian Stock Exchange (ASX) in 1999. The
\nchallenges included implementing a more stringent regime of
\ndisclosure and transparency.<\/p>\n
According to one Australian banker: \"We do recognize that
\nAntam's reporting and transparency has improved over the six
\nyears of our relations. This level of reporting gives us, as the
\nlender, a greater confidence in our understanding of Antam's
\nbusiness\".<\/p>\n
At the end of 2001, Ernst & Young completed a three-month
\nevaluation and assessment of Antam's governance efforts. The
\nevaluation considered 12 key elements to evaluate the pillars of
\ngood corporate governance. The majority of Antam's elements were
\nrated as \"needs improvement\" but none were seen as \"poor\".<\/p>\n
Antam's external reporting was rated \"good\" and in terms of
\ncontinuous disclosure, on par with other international mining
\nfirms.<\/p>\n
Antam's President Director D. Aditya Sumanagara says, \"Antam
\nis fully committed to becoming not only a company run according
\nto the highest standards of corporate governance, but also
\nrecognized as such by the capital market and our shareholders\".<\/p>\n
According to Aditya, the improvement of corporate governance
\nis needed not only to ensure long-term benefits for the company
\nand shareholders but also to ensure that Antam is not only
\nprofitable but also transparent and responsible.<\/p>\n
Antam's Corporate Secretary, Dohar Siregar, says, \"The results
\nof the evaluation should be viewed as an indicator of how far
\nAntam has come on its path to good governance since its listing
\non the JSX in 1997.\"<\/p>\n
And Antam's governance work will continue. In May this year,
\nAntam became the only Indonesian-owned and incorporated company
\nto be fully listed on a western stock exchange when its
\napplication was accepted to convert from a Foreign Exempt Listing
\nto an ASX Listing. With the full listing, Antam must comply with
\nall ASX listing rules and the company's governance should
\ncontinue to improve.<\/p>\n
The JORC code, which was developed on the ASX, is the
\ninternational standard used for the disclosures of mining
\ncompanies.<\/p>\n
A well-known mining equity analyst says, \"The need to meet ASX
\nstandards in reserves reporting under the JORC code means that
\nAntam's reporting is consistent with international standards and
\nthus its numbers are comparable with other international mining
\ncompanies.\"<\/p>\n
The fact that Antam's reporting meets the requirements of the
\nASX adds credibility to the information for third parties, he
\nadds.<\/p>\n
Antam's effort to improve corporate governance has shown
\nbenefits. To date in 2002, the JSX is the world's second best
\nperforming exchange, having increased 20% in Rupiah terms and 55%
\nin US dollar terms. This year Antam has outperformed the JSX, by
\n13%. This is in line with the above mentioned McKinsey report
\nwhich states, \"surveys suggest that institutional investors will
\npay as much as 28 percent more for the shares of well-governed
\ncompanies in emerging markets\".<\/p>\n
The next step for Antam will be the implementation of a
\ncorporate policy manual with emphasis on the audit, remuneration
\nand nomination committees and the code of conduct. Improving
\ngovernance will remain an ongoing priority to help improve
\nperformance and create sustainable profitability. Shareholders,
\nemployees, customers, suppliers, communities, governments, and
\nespecially now investors, demand it.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/advertorial-pt-aneka-tambang-1447899208",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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