RI corporate governance reforms on track<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
In spite of recent negative corporate news, the Asian
\nDevelopment Bank (ADB) sees positive steps being taken by both
\nthe public and private sectors to apply good corporate
\ngovernance, thus helping reform the country's economy.<\/p>\n
ADB corporate governance project leader Bernie Carmody said
\nthe idea of corporate governance was gaining momentum in
\nIndonesia.<\/p>\n
\"The government and the private sector are making significant
\nefforts to improve corporate governance,\" he told The Jakarta
\nPost in an interview on Wednesday.<\/p>\n
Good corporate governance, he said, is a company's ability to
\ngenerate long-term profit in an ethical manner, without
\ndisregarding the interest of its stakeholders. They being the
\nemployees, the local community, and its creditors.<\/p>\n
So far Indonesia's response to this concept had been
\nencouraging, he said.<\/p>\n
\"Eighteen months ago you didn't have a single NGO (non-
\ngovernmental organization) on corporate governance. Now there are
\nseven,\" Carmody said.<\/p>\n
On visits to the boardrooms of 30 large private and state
\ncompanies, he recalled that all had responded positively.<\/p>\n
\"The question has moved from what is corporate governance to
\nhow to implement it,\" he said.<\/p>\n
Carmody said the ADB was working alongside the National
\nCommittee for Corporate Governance in implementing the concept.<\/p>\n
The ADB project started last February and is one of several
\nsponsored by other donors, such as the World Bank.<\/p>\n
Its programs also cover promoting corporate governance reforms
\nat the macro level, such as within the country's legal system.<\/p>\n
According to Carmody, a clean state apparatus is vital for
\nensuring companies apply good corporate governance.<\/p>\n
One problem in this regard here is the widespread incidence of
\ncorruption, collusion and nepotism, he said.<\/p>\n
\"How are we supposed to stay clean if we swim in dirty water,\"
\nCarmody said, recalling a question by a local participant at a
\ncorporate governance seminar.<\/p>\n
The initiative to reform Indonesia's corporate governance
\nsprang from the 1997 financial crisis. Carmody said the crisis
\npartly stemmed from companies making bad business decisions.<\/p>\n
At that time, the government and private companies saw a need
\nto adhere to best practices lest the same mistakes occurred
\nagain.<\/p>\n
Carmody added that foreign investors regarded corporate
\ngovernance as a yardstick when they wanted to bet on Indonesian
\ncompanies.<\/p>\n
At this point, a stream of bad corporate news had further
\ndampened their interest in Indonesian assets.<\/p>\n
The latest example of this was the liquidation of the publicly
\nlisted Unibank.<\/p>\n
The Capital Market Supervisory Agency (Bapepam) suspects the
\nbank's former owner may have illegally stripped his stake in the
\nbank to escape liability.<\/p>\n
Monday's closure of the bank followed hot on the heels of a
\nsurvey last week on the best practices of 45 leading firms listed
\non the Jakarta Stock Exchange (JXS).<\/p>\n
Out came names like PT Astra International, PT Unilever, PT
\nBank NISP, PT Bank Universal, PT Bank Niaga, and state-owned
\nfirms such as PT Tambang Timah and PT Aneka Tambang.<\/p>\n
The survey found that these companies were practicing
\nacceptable corporate governance standards. Carmody called this a
\npositive sign.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-corporate-governance-reforms-on-track-1447893297",
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"sponsor": "Okusi Associates",
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