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.”