Book III Questionnaire ENG (1)

7/27/2019 Book III Questionnaire ENG (1)

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Forum for Corporate Governance in Indonesia (FCGI)

PriceWaterhouse Coopers (PwC)

Corporate Governance Self Assessment Checklist

Purpose of this questionnaireThis questionnaire has been developed by FCGI and PwC as a self assessment tool for Indonesian

companies to review and evaluate the quality of their governance practices. It is intended that this questionnaire can be used by any company,

regardless of whether they are a state owned entity, a listed company or a private company, and regardless of the industry in which the

company operates.

LimitationsThe results of this questionnaire should be treated with caution. Good corporate governance is not only a question of having appropriate procceses

in place in the company, those processes must also be operating effectively. Judgement is therefore required

in interpreting the score that is achieved when answering the questions in the survey, which largely require "yes" or "no" answers.

Secondly, because the questionnaire is intended to cover a broad range of companies, it is necessarily wide in its scope, and it does not necessarilyaddress all possible issues of corporate governance that should be considered by companies in particular industry groups and/ or regulatory regimes.

Finally, as with any self-assessment system, the quality of the evaluation depends greatly on the knowledge, experience and objectivity

of the person or people responsible for completing the questionnaire.



1.0 Shareholder Rights

Shareholder Rights and Responsib i l i t ies: the effect iveness of the company in protect in g the rights of al l of its shareholders,

includ ing its abi l i ty to prevent majori ty shareholders from dilut ing the value and interests of minori ty shareholders

The applicable answers determine the score between brackets

Score

1.1 s t e annua meet n g o s are o ers con ucte w t n mont s

after the accounting year end in accordance with the regulation

chapter 65 (2) of the company law? Yes (2) No (0)

1.2 re a s are o ers g ven at east ays not ce o t e annua

shareholders' meeting by announcement in at least two daily

newspapers? Yes (2) No (0)

1.3 Are additional efforts made to encourage all shareholders to attend

and vote during the annual shareholder meeting? Yes (2) No (0)

1.4 re a tona e orts ma e to encourage ot er s are o ers to

attend and vote during special shareholder meetings? Yes (2) No (0)

1.5 Are all shareholders given the right to subscribe when the

company's Board increases its share capital by less than 5%? Yes (2) No (0)

1.6 Are all shareholders given the right to subscribe when the

company's Board issues convertible bonds? Yes (2) No (0)

How easy is it for your shareholders to participate in voting at

the shareholders meeting?

1.7 Is voting by mail allowed? Yes (2) No (0)

1.8 Can anybody serve as a proxy? Yes (2) No (0)

What proportion of shareholders is required for the approval of

the following items?

1.9 Amendment of funding documents <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)



1.10 Merger, and major sale or acquisition of assets <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

1.11 Large related-party transactions, etc <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

1.12 Appointment of directors and auditors <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

1.13 Removal of directors <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

1.14 Removal of auditors <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

1.15 Remuneration of board members <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

1.16 New share issuance <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

1.17 Not giving a preemptive right to existing shareholders when shares

or convertible bonds are issued <1/2 (0) 1/2-2/3 (1) >2/3-3/3 (2)

The role of shareholders in practice in nominating candidates

and electing outside directors of your firm

1.18 Are director candidates disclosed before the shareholders meeting?Yes (2) No (0)

1.19 an m nor ty s are o ers o ng more t an a certan eve o

shares) nominate candidates at the shareholders meeting or prior to

the meeting (to have the company disseminate relevant

information)? Yes (2) No (0)

1.20 Is cumulative voting practiced in your firm?

- introduced, and has been exercised at least once (2)

- introduced, but has not occurred so far (1)

- the firm opted out (by the articles of incorporation, etc) (0)

1.21 ou t e poss e t at t e rector can ates propose y

management of your firm fail to be elected at the shareholders

meeting? (2) (1) (0)



Sometimes Rarely Unthinkable

Information about the latest annual shareholders meeting

1.22 How long did the meeting last? (0) (1) (2)

1-30 minutes 31-120 minutes > 120 minutes

1.23 What percentage of the shareholders attended the last General

Meeting of Shareholders? (0) (2)

<= 50% > 50%

Do you agree with the following statements for your firm?

1.24 are o ers are prov e wt a equate n ormaton on agen a

items of shareholders meeting Disagree (0) Agree (1) Fully agree (2)

1.25 Adequate time is given for asking questions and placing issues at

the shareholders meeting Disagree (0) Agree (1) Fully agree (2)

1.26 are o ers preempt ve rg t n t e ssuance o s ares or

convertible bonds (so that they can maintain their fractional

ownership) are adequately protected in the company's articles of

incorporation or in the process of shareholder approval Disagree (0) Agree (1) Fully agree (2)

1.27 e ate -party transactons are u y scusse w t a equate

information at the shareholders meeting (with interested

shareholders abstaining from voting) Disagree (0) Agree (1) Fully agree (2)

1.28 t s not cut to now ow muc equ ty owners p t e maor

shareholders control (including the equity shares of companies they

control) Disagree (0) Agree (1) Fully agree (2)

1.29 Is each substantial change in the corporate governance structure of

the company or in the Company's compliance with the Indonesian

Code of Corporate Governance submitted to the General Meeting of

Shareholders for discussion under a separate agenda item? Yes (2) No (0)



1.30 Is the policy of the Company on reserves and on dividends (the level

and purpose of the reserves, the amount of the dividend and the

type of dividend and the proposal for the distribution for the

dividend) and any changes to this policy dealt with and explained as

a separate agenda item at the General meeting of Shareholders? Yes (2) No (0)

1.31 Is there adequate opportunity for shareholders to receive and review

the financial reports in order to ask for questions to be put on the

Agenda at the annual shareholders' meeting? Yes (2) No (0)

1.32 Is there adequate time given during the annual shareholers' meeting

for shareholders to ask questions? Yes (2) No (0)

1.33 Does the annual meeting of shareholders decide the following

items?

- appointment of BoC and BoD? Yes (2) No (0)

- evaluation of BoC and BoD performance? Yes (2) No (0)

- compensation of BoD and BoC? Yes (2) No (0)

- appointment of external auditors? Yes (2) No (0)

Total score

Weighted score (total score divided by maximum possible score

(72) then multiplied by weighting of 20%)



2.0 Corporate Governance Policy

Board Structure and Governance: the abi l ity of the B oard of Comm issioners to provide independent overs ight of

management perform ance and hold management accountable to shareholders and other relevant stakeholders

The applicable answers determine the score between brackets

Score2.1 Does your company have a written code of corporate governance,

which includes:

- Responsibilities of the BoD Yes (2) No (0)

- Responsibilities of the BoC Yes (2) No (0)

- Principles for the selection of members of the BoD Yes (2) No (0)

- Principles for the selection of members of the BoC Yes (2) No (0)

- Responsibilities of the Remuneration System of BoD and BoC Yes (2) No (0)

- Principles in Dealing with Conflicts of Interest Yes (2) No (0)

- Powers of the General Meeting of Shareholders Yes (2) No (0)

- Provisions of information to the General Meeting of Shareholders Yes (2) No (0)

- The audit of the financial reporting and the position of the internal

auditor function, the external auditor, the BoD and the BoC Yes (2) No (0)

- e ro e, appo ntment, remunerat on an assessment o t e unct on o

External Auditor Yes (2) No (0)

2.2 Does your firm disclose the following information? If yes, by what

means?

<More than one choice can be made.>



Web: company's web page (2 points) AR: annual report (1 points)

RR: report to regulatory agencies (1 points) No: no disclosure (0 points)

- Self- dealing (related-party) transactions Web (2) AR (1) RR (1) No (0)

- Directors selling or buying shares in their company Web (2) AR (1) RR (1) No (0)

- Resume/background of directors Web (2) AR (1) RR (1) No (0)

- Remuneration of directors Web (2) AR (1) RR (1) No (0)

- Fees paid to external auditors, advisors, and other related Web (2) AR (1) RR (1) No (0)

parties

- Major contingent liabilities such as cross-guarantees of debt Web (2) AR (1) RR (1) No (0)

repayment

- Policies on risk management Web (2) AR (1) RR (1) No (0)

- Significant changes in ownership Web (2) AR (1) RR (1) No (0)

- Governance structures and policies (explicit corporate governance

rules and visions) Web (2) AR (1) RR (1) No (0)

- The extent to which the firm's corporate governance practices conform

to the established standardsWeb (2) AR (1) RR (1) No (0)

2.3 Is the BoC, to the extent permissable under the law, specifically made

responsible for ensuring adherence to the code of corporate

governance? Yes (2) No (0)

2.4 oes t e company ave a orporate ecretary or a comp ance o cer

whose task is to ensure full compliance of the company with existing

laws and regulations and internal procedures? Yes (2) No (0)

2.5 Is the Corporate Secretary also assisting the BoC ? Yes (2) No (0)

2.6 Can the Corporate Secretary only be dismissed with the consent of Yes (2) No (0)

the BoC ?



2.7 Does the company have a written code of conduct / ethics? Yes (2) No (0)

2.8 Is the code of conduct distributed to all employees ? Yes (2) No (0)

2.9 Is the code of conduct available on the company's website? Yes (2) No (0)

2.10 Alert Policyo a empoyees ave t e poss ty o report ng a ege rreguates o

a general, operational and financial nature in the Company to the

President Director, The Chairman of the Board of Commissioner, or

another designated official, without jeopardising their legal position? Yes (2) No (0)

2.11 Conflict of interest

- ust a transactons etween t e ompany an n v uas or ega

entities be agreed on terms that are customary for arm's-length

transactions in the branch of business in which the Company and its

Subsidiaries operate?Yes (2) No (0)

- o ecs ons to enter nto transactons n w c t ere are mater a

conflists of interest between members of the BoD and the Company

require the approval of the BoC? Yes (2) No (0)

2.12 Does the code of conduct take into account the following issues?

- business ethical standards in dealing with customers, vendors and

other relevant parties Yes (2) No (0)

- company expectations of management and employees Yes (2) No (0)

- the privacy of information about outsider companies Yes (2) No (0)

- the privacy of information about employees Yes (2) No (0)

- the importance of compliance with laws and regulations Yes (2) No (0)

- compliance with laws and regulations Yes (2) No (0)

- engagement of shareholders Yes (2) No (0)



- consumer interests (if applicable) Yes (2) No (0)



- environmental protection Yes (2) No (0)

- employment Yes (2) No (0)

- human rights Yes (2) No (0)

- contributions to sustainable development Yes (2) No (0)

- business integrity Yes (2) No (0)

- no political engagement Yes (2) No (0)

- fair competition Yes (2) No (0)

- monitoring, reporting and independent verification of the Code Yes (2) No (0)

2.13 Are all employees required to confirm periodically in writing that theyhave complied with the code of conduct Yes (2) No (0)

Total score

Weighted score (total score divided by maximum possible score ( )

then multiplied by weighting of 15%)



3.0 Corporate Governance Practices

The applicable answ ers determine the score between brackets

Sco

3.1 How often per year do the BoC and the BoD meet? ( = points;

1-3= 1 points; 4 or more= 2 points)

3.2 How many members sit on the BoD? ( - = points; - =

points; 13 or more=2 points)

3.3 Is there a separate By-Law regulating the procedures for the

BoD meeting and its decision-making? Yes (2) No (0)

3.4 Does the BoD have effective meeting procedures (for example,

are meeting agendas and board papers distributed in advance)?Yes (2) No (0)

3.5 Are the BoD meetings minuted? Yes (2) No (0)

3.6 Do the By-Laws contain procedures on preventing conflicts of

interest between Directors and the company? Yes (2) No (0)

3.7 How many times a year does the BoD conduct formal meetings?

(if 0-1=0 points; 2-6=1 points; 7 or more=2 points)

3.8 How many members sit on the BoC? ( - = points; - =

points; 13 or more=2 points)

3.9 Is there a separate By-Law regulating the procedures for the

BoC meeting and its decision-making? Yes (2) No (0)

3.10 Does the BoC have effective meeting procedures (for example,

are meeting agendas and board papers distributed in advance)? Yes (2) No (0)

3.11 Are the BoC meetings minuted? Yes (2) No (0)

3.12 Do the By-Laws contain procedures on preventing conflicts of

interest between Commisioners and the compay? Yes (2) No (0)



3.13 How many times a year does the BoC conduct formal meetings?

(if 0-1= 0 points; 2-6=1 points; 7 or more=2 points)

3.14 How many members of the BoC are Independent *? ( if none=0

points; less than 20%=1 points; 20% or more=2 points) BoC

* Not a former Director or currently having an important relationship with the company or receiving financial

compensation other than the regular BoC remuneration

3.15 How many members of the BoC have a short term financial

interest*?

* Financial interest is defined as owning shares, warrants,

convertible bonds or debt to the company as well as any business relationship such as a supplier or customer of the

company

- in the company (if none= points; - %= points; - %=0 points)

- or its affiliates? (if none= points; - %= points; - %=

0 points)

3.16 Are there any potential conflicts of interest between the company

and the members of its BoC or BoD? Yes (2) No (0)

3.17 Does the company have a list of the shares owned by the

members of the BoD and BoC? Yes (2) No (0)

3.18 Does the company have a list of the shares owned by the

families of the members of the BoD and BoC? Yes (2) No (0)

3.19 Consistent with the prevailing laws, does the company have an

internal written policy regarding BoD members having concurrent

positions as directors in other companies? Yes (2) No (0)

3.20 Check which of these committees (if any) are actively

functioning in your company:

- Audit Committee (for supervising the external and internal

auditors) 2 points



- Compensation Committee (for reviewing BoC, BoD &

management compensation) 2 points

- Nomination Committee (for selecting BoD and BoC

members) 2 points

- Compliance Committee (for adherence to laws and

regulations) 2 points

- Risk Management Committee (for control and management

of risk) 2 points

- Executive Committee (for reviewing management decisions) 2 points

- nsurance omm ee or rev ew ng e nsurance po c es o

the company) 2 points

- Other (please specify) Not sc

3.21 Is there a formal performance appraisal system for the BoD? Yes (2) No (0)

3.22 Is there a formal performance appraisal system for the BoC? Yes (2) No (0)

3.23 How often is the performance appraisal review of the BoD? (if

any=2 points) per year

3.24 How often is the performance appraisal review of the BoC? (if

any=2 points) per year

3.25 When is the timing of changes to the BoD? (if any= points) every ____ years

3.26 When is the timing of changes to the BoC? (if any= points) every ____ years

3.27 Is there an internal nomination process for the BoC? Yes (2) No (0)

3.28 Is there an internal nomination process for the BoD? Yes (2) No (0)

3.29 re can ates gven a wr tten appontment etter as

Commissioners? Yes (2) No (0)



3.30 Are candidates given a written appointment letter as Directors? Yes (2) No (0)

3.31 What are the types of compensation given to Directors?

- Salary independent of performance 2 points- Bonus dependent on performance 2 points

- Stock options with limitation on exercise period 2 points

- Other (pls specify) Not sc

3.32 What are the types of compensation given to

Commissioners?- Salary independent of performance 2 points- Bonus dependent on performance Negative 2 points

- Stock options with limitation on exercise period 2 points

- Other (pls specify) Not sc

3.33 How often does the BoD actively monitor the results of thebusiness? (if 0-3= o points; 4-11=1 points; 12 or more=2 points) per year

3.34 Does the BoC give input to the BoD on matters of strategy? Yes (2) No (0)

3.35 Does the BoC give input to the BoD on matters of policy? Yes (2) No (0)

3.36 oes t e o g ve nput to t e o on matters concern ng

company performance? Yes (2) No (0)

3.37 re t e v s on an m sson, us ness pan an st rategc pan t eresponsibility of the BoD? Yes (2) No (0)

3.38 Do the BoD and BoC identify and select external specialists

when needed expertise is not possessed by existing directors or

staff? Yes (2) No (0)

3.39 Are members of the BoD and BoC given introduction training? Yes (2) No (0)

3.40 re mem ers o t e o an o prov e w t t e opportun ty

of ongoing training? Yes (2) No (0)

3.41 re t e mem ers o t e o appon te y t e enera eetng

of Shareholders? Yes (2) No (0)



3.42 What is the term of appointment for the BoD? (2) (1) (0)

1-2 years 3-4 years 5 years or more

3.43 Is there any rotation plan for the BoD in order to avoid as much

as possible the situation in which many BoD members retire at

the same time? Yes (2) No (0)

3.44 Is there a clear division of tasks within the BoD? Yes (2) No (0)

3.45 Does the BoC have to approve the following:- the operational and financial objectives of the Company Yes (2) No (0)

- the strategy designed to achieve the objectives Yes (2) No (0)

- eterm n ng an amen ng t e parameters to e app e n

relation to the strategy (for example in respect of the financial

ratios), and Yes (2) No (0)

- the appointment of the BoD member as CFO Yes (2) No (0)

- t e a ocat on o ut es o t e o to n v ua mem ers o t e

BoD Yes (2) No (0)

- a ransac ons e ween e ompany an na ura or ega

persons who hold at least 10% of the shares in the Company

that are of material significance to the Company and/or such

persons Yes (2) No (0)

- a resouton on t e operatona an nanca a ms o t e

Company, the strategy designed to achieve the aims, and the

parameters to be applied in relation to the strategy Yes (2) No (0)

- all transactions in which there are conflicts of interest with BoD

members Yes (2) No (0)

- all transactions in which there are conflicts of interest with BoC

members Yes (2) No (0)

- the appointment and removal of the Corporate Secretary Yes (2) No (0)

- the remuneration policy for senior management in general Yes (2) No (0)



- t e annua capta nvestment u get, a acqus t ons an

disposals of business activities whose sales exceed a

predetermined amount in the year prior to the acquisitions or

disposal Yes (2) No (0)

- all financial statements before publication Yes (2) No (0)

- all other acts that require the approval by legislation, the

Company's Articles of Association, the By-Laws of the BoD, the

By-Laws of the BoC, the Indonesian Corporate Governance

Code, or any other applicable legislation Yes (2) No (0)

- any c anges to t e ompanys a m n strat ve proce ures w t

regard to decision making by the BoD and the BoC Yes (2) No (0)

3.46 Is Company's Risk Management structure and activities defines

the overall policies? Yes (2) No (0)

3.47 Is Company's Risk Management structure and policies identifies

the element of risk asessment? Yes (2) No (0)

3.48 Is Company's Risk Management structure and policies identifies

the element of control activities? Yes (2) No (0)

Total score

e g te score tota score v e y maxmum poss e score

(144) then multiplied by weighting of 30%)



4.0 Disclosure Policies and Practices

Disclosure: the accuracy and timeliness with which the company discloses its financial position,

condition and prospects, and other non-financial information, and also the ability of existing and prospective

investors to access this information. Disclosure of non-financial matters, includes such matters as the company’s

ownership structure, corporate governance and ethics guidelines, which should be a matter of public record.

The applicable answers determine the score between brackets Score

4.1 Does your company provide shareholders and

investment analysts equal access to information

that may affect share price? Yes (2) No (0)

4.2 Does the company publish its financial results and

management analysis for distribution to analysts? Yes (2) No (0)

4.3 Does the company post its financial results and

management analysis on the internet? Yes (2) No (0)

4.4 ow requenty oes t e company con uct anayst

briefings? (If 1-3 times=1 points; 4 or more=2

points) per year

4.5 Do the reports prepared for the annual

shareholders meeting contain only basic

information of sufficient details to enable investment

analysts to assess the financial and non-financial

performance of the corporation? (2) (1) (0)

morethan

sufficie

nt

detail

avera

ge info

only

basic

info



4.6 Does the annual report describe the following:

- risk management systems Yes (2) No (0)

- business goals and strategies Yes (2) No (0)

- cross-shareholdings and cross debt guarantees Yes (2) No (0)

- management assessment of business climate

and risks Yes (2) No (0)

- names of Commissioners and Directors Yes (2) No (0)

-Commissioners and Directors compensation

rates Yes (2) No (0)

- pr n c pa externa o s e y t eCommissioners Yes (2) No (0)

- corporate governance practices of the company Yes (2) No (0)

- material claims and court cases Yes (2) No (0)

- related party transactions Yes (2) No (0)

- existing and potential conflicts of interest Yes (2) No (0)

- s are o ng o omm ss oners, rectors or

their family members in the company or its

related companies Yes (2) No (0)

4.7 List of information to be included in the

Annual Report

- publication of all transactions between the

company and legal or natural persons who hold

at least ten percent of the shares in the company Yes (2) No (0)



- a st o a exst ng or potenta ant -ta eover

measures and also an indication of the

circumstances in which it is expected that these

measures may be used Yes (2) No (0)

4.8 Does the company track changes in its ownership

structure so that any and all voting blocks are

known? Yes (2) No (0)

4.9 If "Yes", where is this information disclosed? Not scored

Total Score



e g te score tota score v e y max mum

possible score (40) then multiplied by weighting of

20%)



5.0 Audit

The applicable answ ers determine the score between brackets

Score

5.1 Does your company have an Audit Committee? Yes (2) No (0)

5.2 How many members does your Audit Committee

have? (if 0-1=0 points; 2-3=1 points; 4 or more=2

points)

5.3 Is there an Audit Charter that specifies the

qualifications, responsibilities, and procedures of

the Audit Committee? Yes (2) No (0)

5.4 Is there an Audit Charter addressing the authority

to conduct special investigations? Yes (2) No (0)

5.5 How many of these members are independent *? (if

any=1 points; if majority=2 points)* independence is defined here as having no

financial interest in the company or significant

relationships with major shareholders,

management, suppliers or customers

5.6 Does the Audit Committee have regular meetings? Yes (2) No (0)

5.7 Does the Audit Committee report regularly to the

BoC? Yes (2) No (0)

5.8 Does the Audit Committee have regular meetings

with the external auditors? Yes (2) No (0)

5.9 Please rate the quality of: Very High Average Very Low

- Internal Audit (2) (1) (0)- Audit Committee (2) (1) (0)



- External Audit (2) (1) (0)

Total Score

e g te score tota score v e y maxmum

possible score (22) then multiplied by weighting of

15%)



6.0 ResultsThe table below shows the summary scores from the 5 separate sections of the preceding questionna

While all questions in each section have scored equally, the sections themselves have been weightedto reflect the relative importance of each area.

Summary Scores Company Scores Weightings Weighting Scores

(in %age)

1. Shareholder Rights 20%

2. Corporate Governance Policies 15%

3. Corporate Governance Practices 30%

4. Disclosures 20%5. Audit 15%

Total score 100%

Interpretation:1. 0-49%: Your Company needs to look at its CorporateGovernance system

because the overall score is below standard

2. 50-59%: Your Company's overall Corporate Governance score meets the basic standards,

but should seriously consider improvement on issues where the score is low

3. 60-80%: Your Company’s overall Corporate Governance score is good, but could be further improv

4. 81-100%: Your company's Corporate Governance score is excellent

A Word of Caution:The assessment is based on the judgement of the respondents and list of issues that are valid

for most companies. Therefore, the results are determined by the liability of the replies

and the relevant of the questionnaire The questionnaire is therefore a simplification of the reality



ire.

ed



6.0 General Information for Classification of the Company

The following questions are facts about your corporation and its ownership

Name of the company:

Name of preson who completed/ authorised this questionnaire:

Position in the company:

Your e-mail address or other contact details:

6.1 What is the net assets of your corporation at the latest balance sheet date?

- less than or equal to 200,000,000 Rupiah

- more than 200,000,000, less or equal to 10 trillion Rupiah

- more than 10 trillion Rupiah

6.2 What industry does your corporation belong to?

- financial (Bank, Insurance, Other Financial Institution)

- manufacturing

- services

- utility/energy

- other (please specify:___________________________________________)

6.3 Is your company: a listed company? Yes No

6.4 Please focus on the present controlling shareholders of your corporation (if any):

- a State Owned Enterprise? Yes No

- a family controlled company? Yes No

- a subsidiary of Multinational company? Yes No

6.4.1 How many directors in the Board represent this controlling group?

6.4.2 Are the Chairman of the Commissioners and the President Director either affiliated with or appointed by

the controlling shareholders?

Yes CEO only NANo Chairman only



Documents

Book III Questionnaire ENG (1)