Business Judgment Rule Deemed Crucial to Support SOE Transformation

Nagara Institute researcher Satya Arinanto stated that the application of the Business Judgment Rule (BJR) principle is a crucial element in strengthening the governance of BPI Danantara. According to him, this legal doctrine provides room for directors to make professional business decisions while remaining grounded in the principles of prudence and good governance. “This legal protection rule aims to provide certainty for management in making business decisions that carry business risk,” Satya said during a Nagara Institute–Akbar Faizal Uncensored (AFU) Round Table Discussion in Jakarta on Thursday (25/6/2026). Satya explained that the regulation is based on three main legal pillars: Law Number 16 of 2025 on the Fourth Amendment to Law Number 19 of 2003 concerning State-Owned Enterprises (BUMN), Law Number 40 of 2007 concerning Limited Liability Companies (PT), and Law Number 21 of 2021 on the Amendment to Law Number 31 of 1999 concerning the Eradication of Corruption. He noted that the BJR concept aims to protect directors who make business decisions professionally and in accordance with applicable regulations. “Directors cannot be blamed as long as their decisions do not involve elements of fraud, conflicts of interest, or unlawful acts,” Satya said. Satya added that the latest regulation in Law Number 16 of 2025 reinforces the paradigm of asset management based on limited liability company principles. This provision confirms the position of company wealth as assets separated from state finances, yet remaining within the corridor of supervision and accountability. “Although the wealth is separated, supervision and examination of the company are still carried out as part of state asset management. At the same time, proven legal violations must of course be processed according to applicable regulations,” Satya said. Former President Director of PT Merpati Nusantara Airlines, Hotasi Nababan, stressed the importance of harmonising the various legal regimes governing the management of SOEs. He believes legal certainty will help state company managers carry out business functions more optimally. “We live under two regimes with different characteristics. Therefore, clarity and alignment of regulations are needed so that company management can run effectively and remain accountable,” Hotasi said. Consequently, Hotasi assessed that BPI Danantara needs to be supported by a strong legal framework to support national economic growth targets. Regulatory certainty is considered important so that professionals can optimally execute various investment and business development strategies. “What needs to be clarified is the boundary between reasonable business risk and legal violations. That way, directors have sufficient room to make strategic decisions that can drive economic growth,” Hotasi said. Meanwhile, Nagara Institute Executive Director Akbar Faizal said that the restructuring of SOEs through Danantara is a strategic step that must be supported by strong governance and professional leadership. He believes this process is a momentum to strengthen the competitiveness of SOEs while increasing economic benefits for the community.