Corporate Governance

Corporate Governance (hereinafter referred to as CG) is a system designed to guide the management of a company professionally based on the principles of transparency, accountability, responsibility, independence, and fairness, as well as ethical behaviour and sustainability. The primary goal of implementing CG is to optimize the company's value for Shareholders and other stakeholders in the long term.

IDX, as the facilitator and regulator of the capital market in Indonesia, is committed to becoming a globally competitive exchange with world-class credibility, as well as a healthy and globally competitive Stock Exchange. The embodiment of good CG practices, commonly referred to as Good Corporate Governance (GCG), is reflected in the Company's mission, which is to create a reliable and credible financial market infrastructure to achieve an orderly, fair, and efficient market accessible to all stakeholders through innovative products and services.

IDX has successfully implemented guidelines, frameworks, and CG principles effectively and efficiently in the Company's operational activities and continues to improve CG practices in the future. The benefits of implementing GCG can positively impact the creation of the Company's accountability, fair and independent transactions, as well as the reliability and improvement of the quality of information provided to the public.

IDX Strategies to ensure the successful implementation of Corporate Governance (GCG):

1. Consistently Maintaining Governance Guidelines, Charters, and Procedures
   

   IDX regularly reviews its Guidelines, Charters, and Procedures. This aims to improve the quality of these documents so that IDX can achieve better performance. The updates to the Guidelines, Charters, and/or work procedures include:

   • Corporate Governance Guidelines

   IDX was established to support the government's policies in developing the capital market and to facilitate organized, fair, and efficient securities trading. The purpose, objectives, and activities of IDX are detailed in the Company’s Articles of Association. Approval of the Stock Exchange Articles of Association is carried out by the Financial Services Authority (OJK) in accordance with Regulation Number 2/POJK.04/2019 concerning Procedures for Approval of Stock Exchange Articles of Association.

   One of IDX’s commitments and embodiments of GCG implementation is the inclusion of GCG practices in the company’s mission. The key to successful and sustainable GCG implementation at IDX lies in the effective functioning of the company’s main organs, namely the General Meeting of Shareholders (GMS), the Board of Commissioners, and the Board of Directors. Additionally, the effective functioning of supporting organs will significantly help enhance the implementation of corporate governance.
   
   IDX is a limited liability legal entity specifically regulated under the Capital Market Law, therefore, the implementation of GCG at IDX adheres to the provisions and regulations set by the Financial Services Authority (OJK). Consequently, the Corporate Governance Guidelines are prepared by considering IDX’s unique characteristics as both a regulator and facilitator in the capital market, while still complying with OJK provisions and regulations. 

   The objectives of these Guidelines are:

   1. To serve as a guideline for the Board of Commissioners in supervising and providing advice to the Board of Directors in managing the Company.
   2. To serve as a guideline for the Board of Directors in conducting the Company’s operational activities based on high moral values, while adhering to applicable laws, regulations, the Articles of Association, and business ethics.
   3. To serve as a guideline for IDX management and employees in carrying out their daily activities and duties in accordance with the principles of good corporate governance (CG).

   • Code of Conduct

   The consistent implementation of the Code of Conduct is a crucial part of improving GCG practices and fostering a healthy work environment. It also supports the reinforcement of the company's values and culture to create a conducive workplace. The Code of Conduct is designed to establish a culture that upholds teamwork, integrity, honesty, discipline, independence, quality, responsibility, and professionalism among all IDX personnel.

   As a regulator and facilitator of the capital market in Indonesia, IDX is committed to becoming a globally competitive exchange with world-class credibility. To that end, the Code of Conduct has been developed as a reference for all levels of Management and Employees in building and fostering healthier, more professional, and harmonious working relationships with fellow Employees, the Board of Commissioners, the Board of Directors, Stock Exchange Members, Listed Companies, Partners, Customers, the Government, and the public. This will be achieved through the alignment of the aspects outlined in the Code of Conduct with the Company’s Vision, Mission, and Core Values, namely Teamwork, Integrity, Professionalism, and Service Excellence (TIPS).

   The Code of Conduct broadly outlines the basic ethical principles that serve as the foundation for formulating the Company’s policies and procedures. However, these policies and procedures may not specifically address all possible situations that could arise. Therefore, the basic ethical principles outlined in the Code of Conduct are used as a fundamental reference to navigate various changing circumstances while maintaining good corporate governance. As a commitment to adhering to the Code of Conduct, all Employees are required to read, understand, and sign the Employee Personal Statement every two years, as well as to embody all provisions of the Code of Conduct in their daily behaviour.

   • Board of Commissioners Charter
     The Board of Commissioners Charter is one of the GCG documents that serves as an elaboration of the Code of Corporate Governance at IDX. It is designed as a guideline to ensure that the Board of Commissioners performs its duties and responsibilities effectively, efficiently, transparently, competently, independently, prudently, and responsibly, in accordance with applicable laws and regulations and based on good faith.
     
     The Board of Commissioners Charter regulates the organization of the Board of Commissioners, including the appointment and tenure of its members. Additionally, it covers:
     1. The ethical standards of the Board of Commissioners.
     2. The duties, responsibilities, and authority of the Board of Commissioners.
     3. Financial authority limits of the Board of Commissioners.
     4. Provisions regarding Board of Commissioners meetings.
     5. Supporting organs of the Board of Commissioners, referred to as Committees.
     6. Working relationships between:
        - The Board of Commissioners and the Board of Directors;
        - The Board of Commissioners and the Audit Committee; and
        - The Board of Commissioners and the Remuneration Committee.
     7. The Secretary of the Board of Commissioners
     8. Performance evaluation of the Board of Commissioners.
        
        
   • Board of Directors Charter
     This Charter serves as a guideline for the Board of Directors in carrying out their functions, duties, and responsibilities within the Company to ensure effective, efficient, transparent, competent, independent, and accountable operations in accordance with the Articles of Association and applicable laws and regulations.
     
     The Board of Directors Charter governs the organization of the Board of Directors, including the appointment, tenure, and leave of its members. Additionally, it covers:
     1. The ethical standards of the Board of Directors.
     2. The duties, responsibilities, and authority of the Board of Directors.
     3. Financial authority limits of the Board of Directors.
     4. Provisions regarding Board of Directors meetings.
     5. Supporting organs of the Board of Directors, referred to as Committees.
     6. Working relationships between:
        - The Board of Commissioners and the Board of Directors;
        - The Board of Directors and the Financial Services Authority (OJK);
        - The Board of Directors and Shareholders;
        - The Board of Directors and Committees;
        - The Board of Directors and Internal Audit; and
        - The Board of Directors and Employee Representatives/Unions.
     7. Performance evaluation of the Board of Directors.
   • Committees and Committee Charters

   In carrying out their roles, duties, and responsibilities, the Board of Commissioners and the Board of Directors are supported by Committees that provide advice and recommendations. Committees operate independently and directly accountable to the Board of Commissioners or the Board of Directors, adhering to the provisions in their Committee Charters.
   
   Generally, the Committee Charters outline the organization of the Committees, including membership requirements, appointment processes, and terms of service. Additionally, the charters cover:

   1. Ethical standards for the Committees.
   2. The duties and functions of the Committees, including meeting protocols and reporting.
   3. The working relationships between the Committees, supporting units, and the Board of Commissioners or Board of Directors.
   4. Performance evaluations.
      
      

   These Committees include: 

   a. Committees supporting the Board of Commissioners:

   - Audit Committee guided by the Audit Committee Charter

   Guided by the Audit Committee Charter, the establishment of this Committee is based on Article 121 of Law No. 40 of 2007 concerning Limited Liability Companies, OJK Regulation No. 55/POJK.04/2015 on the Establishment and Implementation of Audit Committee Work Guidelines, OJK Regulations No. 58/59/60/POJK.04/2016 concerning the Boards of Directors and Commissioners of the Indonesia Stock Exchange (IDX)/Kliring Penjaminan Efek Indonesia/Kustodian Sentral Efek Indonesia, Law No. 4 of 2023 concerning Financial Sector Development and Strengthening, and OJK Regulation No. 3/POJK.04/2021 concerning Activities in the Capital Market Sector.

   The Audit Committee Charter is regularly updated to align with organizational conditions and needs. The current version, Audit Committee Charter 4.0, was ratified in September 2023. This charter serves as a work guideline for the Audit Committee, detailing the duties and functions of its members in supporting the Board of Commissioners professionally, in line with GCG principles and applicable ethical standards in BEI. The Audit Committee Charter governs areas such as membership (appointment and dismissal), duties, responsibilities, and authority. The current Chairman of the Audit Committee is Mr. Karman Pamurahardjo, with members including Mr. Mohamad Oki Ramadhana, Mrs. Lany Djuwita, Mr. Mohammad Noor Rachman, Mrs. Ilya Avianti, and Mrs. Riniek Winarsih. The schedule, agenda, and attendance details for Audit Committee meetings are comprehensively presented in the IDX Annual Report.

   - Remuneration Committee Guided by the Remuneration Committee Charter

   In performing its duties, the Remuneration Committee adheres to the Remuneration Committee Charter, which serves as a guideline for executing the Committee's tasks and functions. The Remuneration Committee supports the Board of Commissioners by reviewing the remuneration system for the Board of Commissioners and the Board of Directors, as well as evaluating the remuneration policies implemented by the Company. The Remuneration Committee Charter includes provisions on the Committee's membership (appointment and dismissal), duties, responsibilities, and authority. The current Chairperson of the Remuneration Committee is Mrs. Nurhaida, with Mr. Yozua Makes as a member. Details regarding the schedule, agenda, and attendance of the Remuneration Committee meetings are fully disclosed in the IDX Annual Report.

   b. Committees Supporting the Board of Directors:

   • Securities Trading Committee.
   • Corporate Valuation Committee.
   • Exchange Members Discipline Committee.
   • Information Technology and Risk Management Steering Committee.
   • Investment Committee.
   • Budget Committee.
   • Financial Institution Pension Fund (DPLK) Investment Committee.
   • Index Committee.
   • Margin Committee.
   • Product Development Committee.
   • Sustainability Committee.

   These committees operate in accordance with their respective Committee Charters. Full details of the committee members, meeting agendas, and attendance are provided in the IDX Annual Report.

   • GCG Supporting Bodies

   In addition to the Committees formed by the Board of Commissioners and the Board of Directors, there are other supporting bodies that assist the main bodies in implementing Good Corporate Governance (GCG), including:

   a. Internal Audit

   The Internal Audit is a supporting body for GCG implementation that provides independent and objective audit (assurance) and consultancy services. Its purpose is to enhance value and improve the Company’s operations through a systematic approach by evaluating and improving the effectiveness of risk management, internal controls, and corporate governance processes. The duties and functions of Internal Audit are outlined in a Board of Directors Decree. The current Head of Internal Audit is Dedy Setiawan.

   b. Corporate Secretary

   The Corporate Secretary is a function established to interact with Shareholders and other Stakeholders, maintain the Company’s reputation, and serve as the custodian of corporate documents. Corporate Secretary has direct access to the Board of Directors and works collaboratively with other divisions to gather necessary information related to their duties, including:

   • Stakeholder relations.
   • Board of Dir ectors meetings and/or joint meetings with the Board of Commissioners.
   • Organizing the General Meeting of Shareholders (GMS) and Extraordinary General Meeting of Shareholders (EGMS), including issuing invitations and disseminating results through press releases. Information regarding GMS/EGMS invitations can be found here.
   • Corporate document administration.
   • Orientation programs for the Board of Commissioners and the Board of Directors.
   • Publics relations.

   The duties and responsibilities of the Corporate Secretary are detailed in a Board of Directors Decree. The current Corporate Secretary is Kautsar Primadi Nurahmad.

   c. Risk Management and Compliance

   The primary objective of risk management implementation at IDX is to ensure that the Company's business activities don’t result in losses exceeding its capacity or disrupt its business continuity. IDX conducts risk management through the processes of identifying, measuring, monitoring, and controlling risks related to all material risk factors. 
   
   The implementation of the identification, measurement, monitoring, and control of risks is supported by:

   • A timely management information system.
   • Accurate and informative reports on the Company’s financial condition, functional performance, and risk exposure.

   In implementing corporate risk management, IDX has a Risk Management and Compliance Division, with its tasks and functions outlined in a Board of Directors Decree. The current Head of the Risk Management and Compliance Division is Elsierra Putri Yosita.
   
   

2. Continuous Awareness of CG Principles
   IDX has conducted ongoing awareness of CG principles to all employees and stakeholders. This awareness aims to instil CG principles in all employees so that they consistently adhere to CG regulations while carrying out the Company’s operational activities.
   
   
3. Third-Party Assessment of CG Implementation at IDX
   IDX believes that third-party assessments can enhance the quality of CG. These assessments bring objective and independent perspectives to evaluate compliance and the effectiveness of CG implementation. The most recent third-party assessment of CG implementation at IDX was conducted in 2021.
   
   
4. Management System Certification
   The implementation of a management system aligns with the application of good CG at IDX. By adopting management system standards, IDX aims to improve business processes, minimize the risk of legal violations, and strengthen its reputation among customers, investors, and other business partners.