INDONESIA Law and Practice Contributed by: Ira A Eddymurthy and A Charlie R Malessy, SSEK Law Firm
pany’s annual reports (as per Article 6 of GR 47/2012). In addition to the aforementioned considera - tions, the OJK has mandated separate ESG reporting requirements for private companies operating as financial institutions, as regulated in OJK Regulation No 51/POJK.03/2017 concern - ing the Implementation of Sustainable Finance for Financial Service Institutions, Issuers, and Public Companies ( “OJK Reg, 51/2017” ), which is discussed in the following. Public Companies OJK Reg, 51/2017 mandates a specific ESG disclosure for public companies and financial institutions. This regulation primarily imposes the obligation for financial institutions and pub - lic companies to integrate sustainable economic practices and provide relevant disclosures to both the OJK and the public. The requirement for sustainable economic practices entails the submission of a sustainability report, either as an integral part of the annual report or as a separate document, on an annual basis. The OJK also issued Circular Letter No 16/ SEOJK.04/2021, which delineates guidelines for ESG disclosures within the annual reports of public companies. These guidelines necessitate, among other provisions, the inclusion of detailed information concerning the actions taken by companies to fulfil their social and environmen - tal responsibilities. 3. Management of the Company 3.1 Bodies or Functions Involved in Governance and Management The Company Law recognises three primary bodies within the corporate structure of Indo -
nesian companies: the BOD, the BOC and the GMS. Each of these principal bodies holds dis - tinct functions and authorities. According to the Company Law, the BOD is entrusted with managing the company in align - ment with its purposes and objectives, and in the best interests of the company. In exercising its management authority, the BOD has the capac - ity to oversee the company’s assets, enter into contracts on behalf of the company and gener - ally represent the company both in and out of court. Despite the breadth of its management powers, the BOD operates under certain con - straints, as delineated by law and/or the com - pany’s articles of association. The BOC is tasked with supervisory and adviso - ry functions directed towards the BOD, ensuring that the company’s interests and objectives are pursued effectively. The GMS holds decision- making authority that surpasses that granted to the BOC and BOD, as stipulated by the Compa - ny Law or the company’s articles of association. 3.2 Decisions Made by Particular Bodies As briefly introduced in 3.1 Bodies or Functions Involved in Governance and Management , the BOD, BOC and GMS each possess distinct authorities and functions. Given that the BOD is vested with the authority to conduct the management of the company, all decisions related to the company’s management fall under the purview of the BOD. However, as previously stated, these powers may be subject to limitations as specified in the law or the com - pany’s articles of association. For example, if the BOD intends to sell or encumber company assets with a value exceeding 50% of the net assets of the company in one or more trans - actions, or to undertake a merger with another
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