We believe that applying good corporate governance (GCG) principles across the Company is a prerequisite for the sustainable, responsible growth of the business over the long term. Ensuring good corporate governance in all our operations, through our compliance with the prevailing laws, standards and regulations, provides assurance to our shareholders and stakeholders that our activities and practices meet their expectations and standards, and that their interests are protected. We are committed to the continuous improvement of our governance practices through an ongoing review of processes and controls to identify and address any deficiencies.
In compliance with the provisions of Law No. 40/2007 regarding Limited Liability Companies (the Company Law), the governance structure of PT Multi Bintang Indonesia Tbk consists of three organs: the General Meeting of Shareholders (GMS), the Board of Commissioners and the Board of Directors. The GMS has the highest decision-making authority, while the Board of Commissioners is responsible for exercising oversight over the management of the Company, and the Board of Directors is responsible for managing the Company and executing the agreed strategies.
The Board of Commissioners and Board of Directors have separate authorities and responsibilities according to their respective functions, as specified in the Company Law and in the Company’s Articles of Association. The Board of Commissioners is supported in its supervisory function and in formulating remuneration policy by the Audit Committee and the Remuneration Committee. The Board of Directors is assisted by the Internal Audit Department and the Corporate Secretary in controlling and supervising the actions of the Company and in implementing good corporate governance. Underpinning this framework are the Articles of Association, which define the operational rules and responsibilities within the Company, and the Code of Business Conduct, which sets out the standards of behaviour expected of all members of the organization. Alongside these are the Company’s internal control and risk management systems, which are regularly evaluated and strengthened to ensure their continued efficacy in line with the growth of the business.
GCG Assessment and Strengthening
Multi Bintang’s corporate governance is continually evaluated and upgraded through the operation of the various controls and review processes described in the following pages. However, to provide an objective, independent assessment of the coverage and quality of GCG implementation in the organization, the Company applies the principles of the ASEAN Corporate Governance Scorecard (ACGS). This instrument, which is based on the principles of good corporate governance developed by the Organisation for Economic Cooperation and Development (OECD), evaluates five key aspects of governance: (1) shareholders’ rights; (2) equitable treatment of shareholders; (3) the role of stakeholders; (4) disclosure and transparency; and (5) board responsibilities.
In 2016, the Indonesian Institute for Corporate Directorship (IICD) assessed the corporate governance of Multi Bintang against the ACGS. . Based on that, in November 2016 the Company was, for the first time, ranked among the top 50 Publicly Listed Companies in Indonesia.
The assessment also indicates aspects of corporate governance that require further strengthening. The Company will follow up on these.