POJK on the Board of Directors and Board of Commissioners of Issuers or Public Companies

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 33 /POJK.04/2014
CONCERNING
THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS OF ISSUERS OR PUBLIC COMPANIES BY THE GRACE OF GOD THE ALMIGHTY, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to improve the implementation of good corporate governance principles for Issuers or Public Companies related to the duties and responsibilities of the Board of Directors and Board of Commissioners, it is necessary to perfect regulations regarding the Board of Directors and Board of Commissioners of Issuers or Public Companies by establishing a Financial Services Authority Regulation concerning the Board of Directors and Board of Commissioners of Issuers or Public Companies; Recalling: 1. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 40 of 2007 concerning Limited Liability Companies (State Gazette of the Republic of Indonesia Year 2007 Number 106, Supplement to the State Gazette of the Republic of Indonesia Number 4756);
3. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
DECIDES:
Decree: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS OF ISSUERS OR PUBLIC COMPANIES.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. General Meeting of Shareholders, hereinafter referred to as GMS, is the organ of the Issuer or Public Company that has authority not delegated to the Board of Directors or Board of Commissioners as regulated in the Law on Limited Liability Companies and/or the Articles of Association.
2. Board of Directors is the organ of the Issuer or Public Company that has the authority and full responsibility for the management of the Issuer or Public Company for the benefit of the Issuer or Public Company, in accordance with the purpose and objectives of the Issuer or Public Company, and represents the Issuer or Public Company, both in and out of court, in accordance with the provisions of the Articles of Association.
3. Board of Commissioners is the organ of the Issuer or Public Company that is tasked with carrying out general and/or specific supervision in accordance with the Articles of Association and providing advice to the Board of Directors.
4. Independent Commissioner is a member of the Board of Commissioners who comes from outside the Issuer or Public Company and meets the requirements as an Independent Commissioner as referred to in this Financial Services Authority Regulation.

CHAPTER II
BOARD OF DIRECTORS
First Section
Membership
Article 2
(1) The Board of Directors of an Issuer or Public Company shall consist of at least 2 (two) members.
(2) 1 (one) of the Board of Directors members shall be appointed as the Chief Director or President Director.
Article 3
(1) Board of Directors members are appointed and dismissed by the GMS.
(2) Board of Directors members are appointed for a specific term of office and may be reappointed.
(3) 1 (one) term of office for a Board of Directors member shall be at most 5 (five) years or until the closing of the Annual GMS at the end of 1 (one) term of office.
Article 4
(1) Those who may become Board of Directors members are individuals who meet the requirements at the time of appointment and during their tenure:
a. having good character, morality, and integrity; b. having the legal capacity to perform legal acts;
c. within 5 (five) years prior to appointment and during tenure:

1. have never been declared bankrupt;
2. have never been a member of the Board of Directors and/or Board of Commissioners who were declared at fault causing a company to be declared bankrupt;
3. have never been sentenced for committing criminal acts that harm state finances and/or are related to the financial sector; and
4. have never been a member of the Board of Directors and/or Board of Commissioners who during their tenure:
   a) failed to hold the Annual GMS; b) their accountability as a member of the Board of Directors and/or Board of Commissioners was never accepted by the GMS or they never provided accountability as a member of the Board of Directors and/or Board of Commissioners to the GMS; and c) caused a company that obtained permission, approval, or registration from the Financial Services Authority to fail to fulfill the obligation to submit annual reports and/or financial reports to the Financial Services Authority. d. having a commitment to comply with laws and regulations; and e. having knowledge and/or expertise in the fields required by the Issuer or Public Company. (2) Fulfillment of the requirements as referred to in paragraph (1) must be included in a letter of statement and submitted to the Issuer or Public Company. (3) The letter of statement as referred to in paragraph (2) must be examined and documented by the Issuer or Public Company.
   Article 5
   Issuers or Public Companies are required to hold a GMS to replace Board of Directors members who no longer meet the requirements as referred to in Article 4.
   Article 6
   (1) Board of Directors members may hold concurrent positions as:
   a. members of the Board of Directors of at most 1 (one) other Issuer or Public Company; b. members of the Board of Commissioners of at most 3 (three) other Issuers or Public Companies; and/or
   c. members of committees of at most 5 (five) committees in the Issuer or Public Company where the person concerned also serves as a member of the Board of Directors or Board of Commissioners.
   (2) Concurrent positions as referred to in paragraph (1) may only be held insofar as they do not conflict with other laws and regulations.
   (3) In the event that other laws and regulations regulate provisions regarding concurrent positions that differ from the provisions in this Financial Services Authority Regulation, the provisions that regulate more strictly shall apply.
   Article 7
   Proposals for the appointment, dismissal, and/or replacement of Board of Directors members to the GMS must take into account recommendations from the Board of Commissioners or the committee exercising nomination functions.

Second Section
Resignation and Temporary Dismissal
Article 8
(1) Board of Directors members may resign from their positions before the end of their term of office.
(2) In the event that a Board of Directors member resigns as referred to in paragraph (1), the member concerned must submit a resignation request to the Issuer or Public Company. (3) The Issuer or Public Company is required to hold a GMS to decide on the resignation request of the Board of Directors member as referred to in paragraph (2) at the latest 90 (ninety) days after the receipt of the said resignation request.
Article 9
Issuers or Public Companies are required to provide information disclosure to the public and submit to the Financial Services Authority at the latest 2 (two) working days after:
a. receipt of the Director's resignation request as referred to in Article 8 paragraph (2); and b. the results of the GMS as referred to in Article 8 paragraph (3).
Article 10
(1) Board of Directors members may be temporarily dismissed by the Board of Commissioners with stated reasons.
(2) Temporary dismissal as referred to in paragraph (1) must be notified in writing to the Board of Directors member concerned.
(3) In the event that a Board of Directors member is temporarily dismissed as referred to in paragraph (1), the Board of Commissioners must hold a GMS to revoke or uphold the decision of temporary dismissal. (4) The GMS as referred to in paragraph (3) must be held within a period of at most 90 (ninety) days from the date of temporary dismissal. (5) With the expiration of the period for holding the GMS as referred to in paragraph (4) or if the GMS cannot make a decision, the temporary dismissal as referred to in paragraph (1) becomes void. (6) In the GMS as referred to in paragraph (3), the Board of Directors member concerned is given the opportunity to defend themselves. (7) Board of Directors members temporarily dismissed as referred to in paragraph (1) are not authorized to:
a. manage the Issuer or Public Company for the benefit of the Issuer or Public Company in accordance with the purpose and objectives of the Issuer or Public Company; and b. represent the Issuer or Public Company in and out of court. (8) The limitation of authority as referred to in paragraph (7) applies from the decision of temporary dismissal by the Board of Commissioners until:
a. there is a GMS decision upholding or canceling the temporary dismissal as referred to in paragraph (3); or b. the expiration of the period as referred to in paragraph (4).
Article 11
Issuers or Public Companies are required to provide information disclosure to the public and submit to the Financial Services Authority regarding:
a. the decision of temporary dismissal; and b. the results of the GMS as referred to in Article 10 paragraph (3) or information regarding the voiding of temporary dismissal by the Board of Commissioners due to the failure to hold the GMS until the expiration of the period as referred to in Article 10 paragraph (5), at the latest 2 (two) working days after the occurrence of the event.

Third Section
Duties, Responsibilities, and Authority
Article 12
(1) The Board of Directors is tasked with managing and is responsible for the management of the Issuer or Public Company for the benefit of the Issuer or Public Company in accordance with the purpose and objectives of the Issuer or Public Company established in the Articles of Association. (2) In carrying out duties and responsibilities for management as referred to in paragraph (1), the Board of Directors is required to hold Annual GMS and other GMS as regulated in laws and regulations and the Articles of Association. (3) Each Board of Directors member is required to carry out duties and responsibilities as referred to in paragraph (1) with good faith, full responsibility, and care. (4) In order to support the effectiveness of the implementation of duties and responsibilities as referred to in paragraph (1), the Board of Directors may form committees. (5) In the event that committees are formed as referred to in paragraph (4), the Board of Directors is required to evaluate the performance of the committees at the end of each fiscal year.
Article 13
(1) Each Board of Directors member is jointly and severally liable for losses to the Issuer or Public Company caused by errors or negligence of Board of Directors members in carrying out their duties. (2) Board of Directors members cannot be held accountable for losses to the Issuer or Public Company as referred to in paragraph (1) if they can prove:
a. the loss was not due to their error or negligence; b. they managed with good faith, full responsibility, and care for the benefit and in accordance with the purpose and objectives of the Issuer or Public Company;
c. they did not have a conflict of interest, either directly or indirectly, regarding the management actions that caused the loss; and
d. they took actions to prevent the occurrence or continuation of the loss.
Article 14
The Board of Directors has the authority to carry out management as referred to in Article 12 in accordance with policies deemed appropriate, in accordance with the purpose and objectives established in the Articles of Association.
Article 15
(1) The Board of Directors has the authority to represent the Issuer or Public Company in and out of court.
(2) Board of Directors members are not authorized to represent the Issuer or Public Company if:
a. there is a court case between the Issuer or Public Company and the Board of Directors member concerned; and b. the Board of Directors member concerned has interests conflicting with the interests of the Issuer or Public Company. (3) In the event of circumstances as referred to in paragraph (2), those entitled to represent the Issuer or Public Company are:
a. other Board of Directors members who do not have a conflict of interest with the Issuer or Public Company; b. the Board of Commissioners in the event that all Board of Directors members have a conflict of interest with the Issuer or Public Company; or
c. other parties appointed by the GMS in the event that all Board of Directors members or Board of Commissioners have a conflict of interest with the Issuer or Public Company.

Fourth Section
Board of Directors Meetings
Article 16
(1) The Board of Directors is required to hold Board of Directors meetings regularly at least 1 (one) time every month.
(2) Board of Directors meetings as referred to in paragraph (1) may be held if attended by a majority of all Board of Directors members.
(3) The Board of Directors is required to hold joint meetings with the Board of Commissioners regularly at least 1 (one) time in 4 (four) months.
(4) The attendance of Board of Directors members in meetings as referred to in paragraph (1) and paragraph (3) must be disclosed in the annual report of the Issuer or Public Company.
Article 17
(1) The Board of Directors must schedule meetings as referred to in Article 16 paragraph (1) and paragraph (3) for the following year before the end of the fiscal year.
(2) At meetings scheduled as referred to in paragraph (1), meeting materials must be submitted to participants at the latest 5 (five) days before the meeting is held.
(3) In the event that meetings are held outside the schedule established as referred to in paragraph (1), meeting materials must be submitted to participants at the latest before the meeting is held.
Article 18
(1) Decision-making at Board of Directors meetings as referred to in Article 16 paragraph (1) is based on deliberation and consensus.
(2) In the event that deliberation and consensus cannot be reached as referred to in paragraph (1), decision-making is based on the majority vote.
Article 19
(1) The results of meetings as referred to in Article 16 paragraph (1) must be recorded in meeting minutes, signed by all attending Board of Directors members, and submitted to all Board of Directors members. (2) The results of meetings as referred to in Article 16 paragraph (3) must be recorded in meeting minutes, signed by attending Board of Directors members and Board of Commissioners members, and submitted to all Board of Directors members and Board of Commissioners members. (3) In the event that there are Board of Directors members and/or Board of Commissioners members who do not sign the meeting results as referred to in paragraph (1) and paragraph (2), the concerned party must state the reasons in writing in a separate letter attached to the meeting minutes. (4) Meeting minutes as referred to in paragraph (1) and paragraph (2) must be documented by the Issuer or Public Company.

CHAPTER III
BOARD OF COMMISSIONERS
First Section
Membership
Article 20
(1) The Board of Commissioners shall consist of at least 2 (two) members.
(2) In the event that the Board of Commissioners consists of 2 (two) members, 1 (one) of them is an Independent Commissioner.
(3) In the event that the Board of Commissioners consists of more than 2 (two) members, the number of Independent Commissioners must be at least 30% (thirty percent) of the total number of Board of Commissioners members. (4) 1 (one) of the Board of Commissioners members shall be appointed as the Chief Commissioner or President Commissioner.
Article 21
(1) Provisions regarding requirements and fulfillment of requirements to become Board of Directors members as referred to in Article 4 apply mutatis mutandis to Board of Commissioners members. (2) In addition to meeting the provisions as referred to in paragraph (1), Independent Commissioners must meet the following requirements:
a. are not persons who work or have authority and responsibility to plan, lead, control, or supervise the activities of the Issuer or Public Company in the last 6 (six) months, except for reappointment as an Independent Commissioner of the Issuer or Public Company in the next period; b. do not have shares, directly or indirectly, in the Issuer or Public Company;
c. do not have an Affiliation relationship with the Issuer or Public Company, Board of Commissioners members, Board of Directors members, or major shareholders of the Issuer or Public Company; and
d. do not have business relationships, directly or indirectly, related to the business activities of the Issuer or Public Company.
(3) Requirements as referred to in paragraph (1) and paragraph (2) must be met by Board of Commissioners members during their tenure.
Article 22
Issuers or Public Companies are required to hold a GMS to replace Board of Commissioners members who no longer meet the requirements as referred to in Article 21 during their term of office.
Article 23
Provisions regarding the appointment, dismissal, and term of office of the Board of Directors as referred to in Article 3 and Article 4 apply mutatis mutandis to Board of Commissioners members.
Article 24
(1) Board of Commissioners members may hold concurrent positions as:
a. members of the Board of Directors of at most 2 (two) other Issuers or Public Companies; and b. members of the Board of Commissioners of at most 2 (two) other Issuers or Public Companies. (2) In the event that Board of Commissioners members do not hold concurrent positions as members of the Board of Directors, the Board of Commissioners member concerned may hold concurrent positions as members of the Board of Commissioners of at most 4 (four) other Issuers or Public Companies. (3) Board of Commissioners members may serve concurrently as committee members of at most 5 (five) committees in the Issuer or Public Company where the person concerned also serves as a member of the Board of Directors or Board of Commissioners. (4) Concurrent positions as committee members as referred to in paragraph (3) may only be held insofar as they do not conflict with other laws and regulations. (5) In the event that other laws and regulations regulate provisions regarding concurrent positions that differ from the provisions in this Financial Services Authority Regulation, the provisions that regulate more strictly shall apply.
Article 25
(1) Independent Commissioners who have served for 2 (two) terms of office may be reappointed in the next period insofar as the Independent Commissioner concerned declares themselves to remain independent to the GMS. (2) The statement of independence of the Independent Commissioner as referred to in paragraph (1) must be disclosed in the annual report. (3) In the event that an Independent Commissioner serves on the Audit Committee, the Independent Commissioner concerned may only be reappointed to the Audit Committee for 1 (one) term of office of the Audit Committee next.
Article 26
Provisions regarding proposals for the appointment, dismissal, and/or replacement of Board of Directors members to the GMS as referred to in Article 7 apply mutatis mutandis to Board of Commissioners members.
Article 27
Provisions regarding the resignation of Board of Directors members as referred to in Article 8 and Article 9 apply mutatis mutandis to Board of Commissioners members.

Second Section
Duties, Responsibilities, and Authority
Article 28
(1) The Board of Commissioners is tasked with supervising and is responsible for supervision over management policies, the general course of management, both regarding the Issuer or Public Company and the business of the Issuer or Public Company, and providing advice to the Board of Directors. (2) Under certain conditions, the Board of Commissioners is required to hold Annual GMS and other GMS according to their authority as regulated in laws and regulations and the Articles of Association. (3) Board of Commissioners members are required to carry out duties and responsibilities as referred to in paragraph (1) with good faith, full responsibility, and care. (4) In order to support the effectiveness of the implementation of duties and responsibilities as referred to in paragraph (1), the Board of Commissioners is required to form an Audit Committee and may form other committees. (5) The Board of Commissioners is required to evaluate the performance of committees assisting in the implementation of duties and responsibilities as referred to in paragraph (4) at the end of each fiscal year.
Article 29
Provisions regarding the accountability of the Board of Directors as referred to in Article 13 apply mutatis mutandis to the Board of Commissioners.
Article 30
(1) The Board of Commissioners has the authority to temporarily dismiss Board of Directors members with stated reasons.
(2) The Board of Commissioners may carry out management actions of the Issuer or Public Company under certain conditions for a specific period.
(3) Authority as referred to in paragraph (2) is determined based on the Articles of Association or GMS decision.

Third Section
Board of Commissioners Meetings
Article 31
(1) The Board of Commissioners is required to hold meetings at least 1 (one) time in 2 (two) months.
(2) Board of Commissioners meetings as referred to in paragraph (1) may be held if attended by a majority of all Board of Commissioners members.
(3) The Board of Commissioners is required to hold joint meetings with the Board of Directors regularly at least 1 (one) time in 4 (four) months.
(4) The attendance of Board of Commissioners members in meetings as referred to in paragraph (1) and paragraph (3) must be disclosed in the annual report of the Issuer or Public Company.
Article 32
Provisions regarding meeting scheduling and submission of Board of Directors meeting materials as referred to in Article 17 apply mutatis mutandis to Board of Commissioners meetings.
Article 33
(1) Decision-making at Board of Commissioners meetings as referred to in Article 31 paragraph (1) is based on deliberation and consensus.
(2) In the event that deliberation and consensus cannot be reached as referred to in paragraph (1), decision-making is based on the majority vote.
Article 34
Provisions regarding meeting results and Board of Directors meeting minutes as referred to in Article 19 apply mutatis mutandis to Board of Commissioners meetings.

CHAPTER IV
GUIDELINES AND CODE OF ETHICS
Article 35
(1) The Board of Directors and Board of Commissioners are required to formulate guidelines that bind every Board of Directors member and Board of Commissioners member.
(2) Guidelines as referred to in paragraph (1) must contain at least:
a. legal basis; b. description of duties, responsibilities, and authority;
c. values;
d. working hours; e. meeting policies, including attendance policies and meeting minutes policies; and f. reporting and accountability.
(3) Issuers or Public Companies are required to disclose in the annual report of the Issuer or Public Company information that the Board of Directors and/or Board of Commissioners have guidelines. (4) Guidelines as referred to in paragraph (1) in full must be included on the website of the Issuer or Public Company.
Article 36
(1) The Board of Directors and Board of Commissioners are required to formulate a code of ethics that applies to all Board of Directors members, Board of Commissioners members, employees/staff, and supporting organs owned by the Issuer or Public Company. (2) The code of ethics as referred to in paragraph (1) must contain at least:
a. principles that the implementation of duties of the Board of Directors, Board of Commissioners, employees/staff, and/or supporting organs owned by the Issuer or Public Company must be carried out with good faith, full responsibility, and care; and b. provisions regarding the professional attitude of the Board of Directors, Board of Commissioners, employees/staff, and/or supporting organs owned by the Issuer or Public Company in the event of a conflict of interest with the Issuer or Public Company. (3) The code...

(3) The code of ethics as referred to in paragraph (1) must be socialized to all employees working at the Issuer or Public Company.

(4) The code of ethics as referred to in paragraph (1) must be fully included on the website of the Issuer or Public Company.

CHAPTER V
PROHIBITIONS

Article 37
Every member of the Board of Directors and/or member of the Board of Commissioners is prohibited from taking personal benefits, directly or indirectly, from the activities of the Issuer or Public Company, other than lawful income.

CHAPTER VI
SANCTION PROVISIONS

Article 38
(1) Without prejudice to criminal provisions in the Capital Market sector, the Financial Services Authority is authorized to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties causing the violation, in the form of:

a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and g. cancellation of registration.

(2) Administrative sanctions as referred to in paragraph (1) letter b, letter c, letter d, letter e, letter f, or letter g may be imposed with or without prior imposition of administrative sanction in the form of a written warning as referred to in paragraph (1) letter a.

(3) Administrative sanctions in the form of a fine as referred to in paragraph (1) letter b may be imposed separately or together with the imposition of administrative sanctions as referred to in paragraph (1) letter c, letter d, letter e, letter f, or letter g.

Article 39
In addition to administrative sanctions as referred to in Article 38 paragraph (1), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 40
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 38 paragraph (1) and specific actions as referred to in Article 39 to the public.

CHAPTER VII
TRANSITIONAL PROVISIONS

Article 41
Issuers or Public Companies are required to adjust to the provisions of this Financial Services Authority Regulation no later than 1 (one) year from the enactment of this Financial Services Authority Regulation.

CHAPTER VIII
CLOSING PROVISIONS

Article 42
Provisions regarding Directors and Commissioners in other legislation remain applicable to Issuers or Public Companies insofar as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 43
Upon the commencement of this Financial Services Authority Regulation, the Decision of the Head of the Capital Market Supervisory Board Number: Kep-45/PM/2004 dated 29 November 2004 regarding Directors and Commissioners of Issuers and Public Companies along with Regulation Number IX.I.6 which is its attachment are repealed and declared invalid.

Article 44
This Financial Services Authority Regulation comes into force on the date of its enactment.

To ensure that everyone knows it, order the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 8 December 2014

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY, signed.
Signed.

MULIAMAN D. HADAD

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2014 NUMBER 375 Enacted in Jakarta On 8 December 2014

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,
Signed.

YASONNA H. LAOLY

Copy consistent with the original
Legal Director 1
Ministry of Law,
Signed.

Tini Kustini