Danantara Resets Governance of State-Owned Enterprises, Backed

The Investment Management Body (BPI) Daya Anagata Nusantara (Danantara) will implement a governance reset to strengthen the fundamentals of state-owned enterprises (BUMN). The aim is to improve efficiency and productivity in the long term. According to Syafruddin Karimi, a professor at the Faculty of Economics and Business (FEB), Universitas Andalas, this step is well-suited to refining the management structure of BUMN. He said the government hopes to make BUMN more efficient and productive in the long run. A governance reset of BUMN must be read as two things. First, a correction of old problems. Second, a strategic repositioning for the future. The government wants to transform BUMN from merely a policy implementer into a creator of economic value capable of driving industrialisation, downstream development, and long-term investment, Syafruddin said in an official statement on Thursday (5 March 2026). He noted that for decades many BUMN faced classic problems such as policy interventions, weak investment discipline, and unclear relationships between the state’s role as owner and policymaker. He said these conditions could reduce corporate efficiency and pose hidden fiscal risks. This is where the governance reset comes in to improve the structure through stronger governance, professional management, and a clearer separation between business mandates and policy mandates. He further suggested that this step could also be seen as marking a strategic repositioning. The government wants to transform BUMN from policy implementer into a creator of economic value capable of driving industrialisation, downstream development, and long-term investment. ‘In a global context that is increasingly competitive, this repositioning is important so that BUMN can become a more productive development instrument while also boosting investor confidence,’ said Syafruddin. Nevertheless, he sees a major challenge in consolidating BUMN governance under a single entity. He notes that BUMN operating in Indonesia span diverse sectors, including energy, banking, infrastructure, telecommunications, and transportation. Each sector has different market structures, business models, and risk profiles. ‘Consolidating governance means creating an oversight framework that can reach all these differences without hampering the operational flexibility of each company,’ he said. He also sees another challenge arising from integrating risk management standards, financial reporting, and performance evaluation mechanisms. Without a strong institutional design, consolidation could trigger conflicts of interest or misalignment of strategies between companies. He urged Danantara to build a portfolio system that can separate the investment function from the operational function, and to set transparent performance indicators. ‘The success of this consolidation depends on institutional capacity and disciplined governance,’ he said. (I-2)