INDONESIA Law and Practice Contributed by: Ira A Eddymurthy and A Charlie R Malessy, SSEK Law Firm
Unlike the provisions for the BOD and BOC, the Company Law extensively regulates how deci - sions can be validly made in the GMS. In short, the Company Law has established formal pro - cedures regarding the conduct of GMS, such as how a formal GMS request is to be submitted and how the GMS invitations are to be delivered to shareholders, as well as the quorum require- ments and decision-making process in the GMS. This is elaborated in 5. Shareholders . As indicated in the preceding sections, Indone - sia, similar to other civil law jurisdictions, adopts a two-tier board system comprising the BOD and the BOC. The implementation of the two-tier board system in Indonesia is mandatory under the Company Law, meaning that every Indo - nesian company is required to have an active BOD and BOC functioning in the operation of the company. Furthermore, based on Article 92, paragraph 3 of the Company Law, the BOD may consist of at least one or more members. However, Article 92, paragraph 4 of the Company Law mandates that companies engaged in activities related to the collection and/or management of public funds, companies issuing debt instruments to the pub - lic and publicly listed companies must have at least two members on the BOD. This indicates that the Company Law only stipulates the mini - mum number of BOD members and does not impose a maximum limit on the number of BOD members. 4. Directors and Officers 4.1 Board Structure Similarly, Article 108, paragraphs 2 and 5 of the Company Law states that the BOC must consist of at least one member, except for companies
engaged in activities related to the collection and/or management of public funds, compa - nies issuing debt instruments to the public, or publicly listed companies, which are required to have at least two members on the BOC. It should be noted that the Company Law does not require that any member of the BOD or BOC be appointed as president director or president commissioner. However, the GMS may choose to make such appointments. Moreover, for the BOD, it is common for the GMS to determine the titles and authorities of each appointed member of the BOD, such as appointing one member of the BOD as the director of finance or director of operations. 4.2 Roles of Board Members In general, the Company Law stipulates that the role of the BOD is to carry out the management of the company in compliance with applicable laws and regulations, as well as the company’s articles of association. As briefly discussed in the preceding sections, the Company Law does not differentiate the roles of different BOD members. However, in cases where there are two or more directors, the allo - cation of authorities and tasks among the BOD members may be determined by a resolution of the GMS. In the absence of such a resolution, the BOD may decide on this matter themselves. As discussed in 3.3 Decision-Making Process- es and 4.1 Board Structure , while the GMS may elect a specific member of the BOC to serve as president commissioner, it is crucial to recognise that no member of the BOC can independently carry out the duties of the BOC. According to the Company Law, this prevents variations in the roles of individual BOC members. There - fore, even if there is a president commissioner,
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