A recent corporate governance study by the Indonesian Institute for Corporate Directorship showed that implementing corporate governance best practices remains a challenge for listed Indonesian companies, especially those outside the banking industry. Such best practices include protecting shareholders’ rights, and defining clearly what the role of stakeholders is and what the responsibilities of board directors are.
Meeting these international standards could make Indonesian companies more competitive and attract more investments. To support the process, IFC launched a new, five-year Corporate Governance Program in Indonesia in June, providing advice to companies, institutional investors, and banks on implementing good practices, working with government organizations to improve the corporate governance regulatory framework, and increasing the capacity of educational institutions to provide corporate governance training.
“The challenge for corporations and the business sector as a whole will be to accept corporate governance practices and commit to them,” said Moez Miaoui, IFC Operations Officer for Corporate Governance in Indonesia. “But for corporate governance to be widely adopted it also requires the involvement of other stakeholders such as the media to raise public awareness and create momentum.”
More than 130 representatives of Indonesian government agencies and private enterprises attended the launch of the program last month. At the event, Juan Carlos Fernandez Zara, IFC Senior Operations Officer for Corporate Governance in East Asia Pacific, said IFC’s experience in China and Vietnam will help guide the Indonesia program. IFC produces an annual corporate governance scorecard for large listed Vietnamese companies and has partnered with China’s Shenzhen Stock Exchange to enhance corporate board performance.
“IFC’s firsthand experience shows that good corporate governance leads to better business results and fosters a favorable business climate,” he said.
Globally, IFC has helped develop 48 corporate governance codes in 32 countries and is currently working on a Bahasa Indonesia version of IFC’s Corporate Governance Manual.
For more information about IFC in Indonesia, contact our communications officer, Novita Patricia Wund, at nwund@ifc.org.
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