Ineffective supervision<\/p>\n
The commentaries appearing in the media on the crisis relating
\nto the liquidation of a great number of banks reveals that there
\nis a latent deficiency in the supervision system within the
\nIndonesian corporation structure that was disregarded which
\nsubsequently caused the revocation of the banks' licenses by the
\ngovernment.<\/p>\n
Much has been said on the subject, but the discussions have
\npredominantly dealt with the macroeconomic and monetary aspects
\nof the problem. Aside from the external factors, it is obvious
\nthat the internal problem regarding the supervisory deficiencies
\nwithin the Indonesian corporation structure is commonly ignored.<\/p>\n
The crucial deficiency within the Indonesian corporate system
\nlies in the blatant ineffectiveness of the supervisory functions
\nthat are supposed to be performed by the board of commissioners
\n(dewan komisaris) over a company's board of directors.<\/p>\n
Articles of association stipulate that approval is needed from
\nthe board of commissioners for specific transactions involving
\nlarge disbursements and investments. But such approval by the
\nboard of commissioners, as required by law, tends to be
\ndisregarded, perhaps for practical reasons. The risk that such
\nanomalies may give rise to disputes in lawsuits is brushed aside.<\/p>\n
In comparison, the Japanese corporate supervisory system, as
\nexercised by the kansa-yaku, over the business operations boards
\nof directors, may be worthwhile to consider.<\/p>\n
The Indonesian komisaris is in Japanese translated into kansa-
\nyaku -- but \"auditor\" is a more proper translation of Kansa-yaku.<\/p>\n
The supervisory powers in the Japanese corporation system are
\nconcerned with auditing and the supervision over the execution of
\nbusiness operations by the board of directors.<\/p>\n
It may be admitted that as long as human beings essentially
\nremain to operate whatever system that may exist, fraudulent
\nmalpractice will remain. Nonetheless, such eventualities must be
\nregarded as exceptional cases to the expected rule of an
\neffective and workable system.<\/p>\n
It's a pity that the present system of the board of
\ncommissioners in the Indonesian corporation structure tends to
\ndegenerate into a pro forma institution of prestige rather than
\naccomplishing its role as an effective supervisory body, so as to
\nlive up to the law and the demands of times.<\/p>\n
With a view to the 21st century, we are glad to hear that
\nmergers of banks will take place, so that only healthy banks will
\nserve the people. Nevertheless, there still remains a need to
\ncreate a workable and effective supervisory system within the
\nIndonesian corporation structure.<\/p>\n
SAM SUHAEDI<\/p>\n
Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/ineffective-supervision-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }