INDONESIA Law and Practice Contributed by: Ira A. Eddymurthy, A. Charlie R. Malessy, A. Ramadinan Saptara and Medita F. Siregar, SSEK Law Firm
3.9 Other Claims/Enforcement Against Directors/Officers As a principle, there is a clear separation between the personal assets and liabilities of the members of the BOD and those of the company. It is essential to determine whether a director is acting in a personal capacity or on behalf of the company. As discussed previously, a director may incur personal liability if they are found to have engaged in misconduct or negli - gence in the performance of their duties. A director cannot be held personally liable for com - pany losses if: • the loss was not caused by their fault or negli - gence; • they have managed the company in good faith and with due care, in the interests of and in accordance with the company’s purposes and objectives; • they do not have a direct or indirect conflict of interest in the management actions that caused the losses; and • they have taken action to prevent the loss or its continuation. 3.10 Payments to Directors/Officers The Company Law provides that the remuneration payable to BOD and BOC members may be deter - mined by the GMS. The GMS may delegate such authority to the BOC, in which case the remuneration of the BOD and BOC members would be determined by a resolution of the BOC. The Company Law also requires the remuneration payable to members of the BOD and BOC to be included in the company’s annual report. The annual report shall be submitted by the BOD to the GMS after it has been reviewed by the BOC. The Company Law does not require separate public disclosure of remu - neration, fees or benefits payable to members of the BOD or other company officers. Certain companies regulated by the OJK are, howev - er, required to make their annual reports publicly avail - able. As the remuneration of BOD and BOC members must be included in the annual report, such compa - nies are effectively required to disclose the remunera - tion of BOD and BOC members to the public.
company’s best interests, ensuring that their actions are in alignment with their fiduciary duties as well as the company’s purposes and objectives. Additionally, the Company Law assigns the BOD the responsibility of representing the company in both legal and non- legal matters. 3.7 Responsibility/Accountability of Directors The members of the BOD are entrusted to act in the best interest of the company, ensuring their actions align with the company’s objectives and purposes. In fulfilling their duties, BOD members may also consider the advice provided by the BOC, provided such advice similarly aligns with the company’s best interests and objectives. Ultimately, BOD members are obligated to serve solely in the best interest of the company, without consideration of the interests of other parties or bodies. 3.8 Breach of Directors’ Duties Under the Company Law, members of the BOD are required to perform their duties in good faith and with full responsibility. Generally, BOD members are not personally liable for company losses, provided their actions are conducted in the company’s interest and in accordance with the provisions of the company’s articles of association. However, BOD members may be personally liable for company losses if they are found guilty of misconduct or negligence in perform - ing their duties. In such instances, claims may be brought against the relevant BOD members by other company organs. If the BOD comprises two or more members, liability is joint and several, meaning each member responsible for the misconduct or negligence may be held jointly and individually liable. On behalf of the company, shareholders represent - ing at least one-tenth of the total shares with voting rights may file a lawsuit against BOD members in the relevant district court to seek compensation for losses suffered by the company. In addition, members of the BOC or other BOD members may also bring claims on behalf of the company against any BOD member whose misconduct or negligence has caused losses to the company.
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