Observers Back Danantara's Governance Reset of State-Owned Enterprises

Indonesia’s Investment Management Agency (BPI) Daya Anagata Nusantara (Danantara) plans a governance reset to strengthen the fundamentals of State-Owned Enterprises (SOEs). According to Professor Syafruddin Karimi, Full Professor at the Faculty of Economics and Business (FEB) Universitas Andalas, this step is a prudent move to improve the management structure of SOEs. He hopes it will be more efficient and productive in the long term.

‘The governance reset of SOEs should be read in two parts. First, a correction of longstanding issues, and second, a strategic repositioning for the future. The government aims to transform SOEs from policy implementers to creators of economic value capable of driving industrialisation, processing, and long-term investment,’ Syafruddin said in a press release received on Friday (6/3).

Syafruddin noted that for decades, many SOEs faced classic problems — policy interference, weak investment discipline, and unclear relationships between the state’s role as owner and as policy maker. He said this could reduce corporate efficiency and create hidden fiscal risks. Here is where governance reset comes in to fix the structure through strengthening governance, management professionalism, and a clearer separation between business mandates and policy mandates.

Furthermore, Syafruddin said the step could also be seen as a signal of strategic repositioning. The government wants to move SOEs from mere policy implementers to creators of economic value capable of driving industrialisation, processing, and long-term investment.

‘In a global context that is increasingly competitive, this repositioning is important so that SOEs can become more productive development instruments while also boosting investor confidence,’ Syafruddin said.

Nevertheless, he sees substantial challenges in consolidating SOE governance under a single entity. He notes that SOEs operating in Indonesia span diverse sectors, including energy, banking, infrastructure, telecommunications, and transportation. Each sector, he said, has different market structures, business models, and risk profiles.

‘Consolidating governance means creating a framework of oversight that can reach across these differences without hindering operational flexibility of each company,’ he said.

Syafruddin also sees another challenge in 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 suggested that Danantara Indonesia should build a portfolio system that can separate investment functions from operational functions, and establish transparent performance indicators.

‘The success of this consolidation depends heavily on institutional capacity and disciplined governance,’ he concluded.