ADHI is committed to implementing Good Corporate Governance in an adequate and efficient manner, and as a platform to enhance its business sustainability as well as to ensure accountability to its stakeholders.
Good Corporate Governance (GCG) constitutes a series of principles and rules by which the Company is managed and controlled to meet the interests of its stakeholders. The Government of Indonesia, through the Regulation of the Minister of State-Owned Enterprise No. PER-01/MBU.2011 and No PER-09/MBU/2012 dated July 6, 2012, endeavors to implement GCG in all State-Owned Enterprise (SOE) organizations.
This regulation is deemed to affect SOE business goals, provide better assessments of business risks, optimize performance, and create a more responsive working culture among the SOEs. The implementation and internalization of the GCG principles are keys to executing a company’s grand strategy in pursuing its overall objectives. ADHI is of the opinion that GCG will increase the trust of stakeholders toward the Company, in addition to enhancing its reputation. Furthermore, ADHI believes that GCG constitutes a value system, and that its implementation in line with international best practice would enhance overall performance.
Adherence to GCG within the Company shall promulgate:
- Adequate protection and fair treatment for all stakeholders.
- Optimal contribution towards increased performance.
- Enhancement and preservation of Company reputation through service excellence.
- Safeguarding of Company assets and resources.
The implementation of GCG by every SOE will promote good management in order to achieve optimum performance. In the case of ADHI, adherence to best practice GCG has proven to be an effective way to boost performance and contribute to sustainable financial growth.
ADHI is one of the SOEs that has implemented GCG in line with the dynamism of the construction business. ADHI adopts GCG policies that are integrated and designed to effectively assure compliance, manage risks, and execute internal controls. Efforts have been taken to equip the Company with the required knowledge and competence to undertake corporate governance practices that are in line with the demands of its businesses, and achieve long-term sustainability.
Furthermore, ADHI believes that not only does GCG strengthen business sustainability, but more importantly, it will shape a solid and structured organization within the Company. Another positive aspect of GCG is its propensity to generate business efficiency, competitiveness, growth, high return, and high value.
In order to implement GCG effectively, ADHI has established a clear GCG structure, policies and procedures, guidelines and Board Manual that set forth the rights and responsibilities, as well as the interactive relations between and among members of the Board of Commissioners and Board of Directors, between the Management Board of the Company and those of subsidiary companies, as well as between members of Board Committees and the Corporate Secretary.
GCG is also prevalent in risk management. In order to manage risk effectively, a company needs to be competent, precise and meticulous in identifying industry as well as organization risks. This includes the ability to espouse a strong risk culture within the organization. Risk management plays a central part in ADHI’s governance that includes planning, decisionmaking, organizing, executing and overseeing.
Adherence to the GCG principles is manifested also in the Company’s Code of Conduct that sets forth a clear guideline of do’s and don’t’s for all management and employees to follow. This Code of Conduct also aims to instill a strong corporate culture of merit and achievements through the socalled 3B initiatives that stand for Working Smart, Integrity, and Modesty.
The Indonesian Financial and Development Audit Board has regularly assessed the implementation of GCG at ADHI on an annual basis. In 2013, ADHI earned a score of 89.50 in this assessment, up from 85.30 in 2012. The improving score reflects the Company’s continuing commitments to implement the GCG principles of transparency, accountability, responsibility, independence and fairness across the entire ADHI business group. In the assessments, emphases were placed on identifying the Company’s level of effectiveness in a number of governance and control aspects such as business ethics, internal control, risk management, fraud, and financial reporting. The Company takes pride in its score improvement, and looks ahead to further improve its performance in the future.