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Corporate governance in Indonesian PLCs improves: Consultant

The Jakarta Post, Jakarta, 23 Juli 2018

Better corporate-govemance practices by the country's publicly listed companies (PLCs) boosted Indonesia’s score on the ASEAN Corporate Governance Scorecard (ACGS) in 2017.

Based on thé assessment by accounting and consultancy firm RSM Indonesia, the average score of Indonesian PLCs increased .to 70.59 in 2017 from 62.68 in 2015 as a result of the high scores earned by the top 100 biggest market companies by capitalization listed on the Indonesia Stock Exchange (IDX).

RSM Indonesia was appointed by the Financial Services Authority (OJK) in 2016 as the domestic

ranking body to conduct assessment of the country’s PLCs.

The assessment is based on the companies’ information disclosures presented in English, shareholder involvement in the company, treatment of shareholders and board responsibility.

The high scores that the companies earned last year also led to an increase in the number of Indonesian PLCs in the top 50 ASEAN list, up to four companies from the two in 2015.

RSM Indonesia Managing consulting partner, Angela Simatu-pang, said recently that three of the five highest-scoring companies were in the banking sector.

She said that domination might have been due to the fact that they were heavily regulated and supervised by the OJK, Which in turn ensured they applied the best corporate governance in their companies.

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Authors

Angela Simatupang
International Contact Partner