Independent directors, commissioners

The idea to establish independent boards of directors and boards of commissioners in public companies aims to uphold good corporate governance. An independent board of directors or commissioners may, directly or otherwise, be considered an extension of the public.

In the case of many issuers, independence is just an empty slogan which the controlling shareholders in a public company can freely flaunt. Take a look at Panin Bank. Priyatna Atmadja is its independent commissioner. Then at PT Matahari Putra Prima Tbk (MPPA), Roy E. Tirtadji, the right hand of the Lippo Group, is its independent commissioner.

We can perhaps learn from firms in the Eka Tjipta Widjaja's Sinar Mas Group, i.e. PT Tjiwi Kimia Tbk P Indah Kiat Pulp and Paper Tbk. These firms have chosen the right people as their independent commissioners. Mas Achmad Daniri, Teddy Pawitra and Ferdinand A. Sonneville are in no way related to Sinar Mas.

If "independent" refers to a function, than anybody can sit on the independent board of directors or board of commissioners. Independent directors or commissioners must act exactly as independent parties representing the public. The question is whether a person loyal to a group or an issuer can play his/her role and at the same time represent public interests.

If "independent" refers to background, then the directors or commissioners should be professionals without any relationship with the issuers. Who will decide on the appointment of independent directors or commissioners? The founders? The public? It would be fairer if they are chosen by independent shareholders.

Therefore, the Jakarta Stock Exchange, the Capital Market Supervisory Agency or the National Committee of Good Corporate Governance must work to review the meaning of "independent" in this context.

-- Investor Indonesia, Jakarta