INTRODUCTION

Background

Corporate Governance, commonly referred to as Good Corporate Governance (GCG), is a system of management and control that must be implemented by every company. The application of GCG  is based on the principles of transparency, accountability, responsibility, and independence. A professional implementation of GCG can enhance the Company’s performance and strengthen stakeholder’s confidence and trust, ultimately improving Company's image and reputation.

PT Pakuwon Jati Tbk (the “Company”) is currently undergoing a transformation to become one of the leading property developers in Indonesia, aiming to be a trusted entity by the public and its shareholders. The Company is a pioneer of the superblock concept in Indonesia, developing large-scale, integrated mixed-use projects combining shopping malls, office spaces, condominiums, and hotels.

The implementation of GCG within the Company is closely linked to the roles of the Board of Commissioners and the Board of Directors. Good corporate management by the Board of Directors, combined with careful, effective, and efficient oversight and advisory functions by the Board of Commissioners in accordance with GCG principles, will foster the creation of a high-performing and trustworthy company for both the general public and shareholders.

The Board of Directors and the Board of Commissioners of the Company hold authorities and responsibilities as regulated in the Company’s Articles of Association and prevailing laws and regulations. Accordingly, both are responsible for ensuring the long-term sustainability of the Company's operations. Therefore, the Board of Directors and the Board of Commissioners must share a unified vision, mission, values, and strategy for the Company. In this regard, a guideline is needed to serve as a common reference for the execution of their respective duties. 

 

Purpose and Objectives

The Work Guidelines for the Board of Directors and the Board of Commissioners ("Work Guidelines") are established as a reference or guideline that contains the working rules, including the duties, authorities, and responsibilities of the Board of Directors and the Board of Commissioners.
The Work Guidelines are based on principles of corporate law, prevailing laws and regulations, the company’s Articles of Association, and the principles of Good Corporate Governance (GCG).

The formulation of these Work Guidelines aims to serve as a reference/guide for the Board of Directors and the Board of Commissioners in executing good corporate governance and management in accordance with both local and national cultural values while applying GCG principles.

The Work Guidelines may be amended, developed, and adjusted in line with the company's needs and dynamics for the betterment of the company itself. Any changes made must be based on prevailing regulations and must not violate the provisions of the Articles of Association. Detailed provisions contained in the Articles of Association and other legal requirements remain binding, even if not explicitly stated in these Work Guidelines.
The principles of good faith, responsibility, trustworthiness, care, and inherent competence of those holding positions in the Board of Directors and the Board of Commissioners are general principles that must always be upheld by the company's governing bodies responsible for supervision and management.

Vision

“Together We Grow”

  • Growing together with shareholders: we enhance shareholder value through the successful development and management of high-quality capital-intensive products.
  • Growing together with tenants: we create value by providing a profitable retail platform for our tenants to grow their businesses.
  • Growing together with buyers: we offer investment opportunities with optimal capital appreciation.
  • Growing together with employees: we cultivate a work environment that paves the way for future career and personal development. With over 200 years of aggregate experience, our management team offers sound expertise and continues to invest in training and personal development.

Mission

  • To become the leading non-strata retail mall developer in Indonesia
  • To develop the best superblocks and self-sustained township-scale residential developments for a better quality of life
  • To become the best workplace in the property industry
  • To optimize investment returns for tenants and buyers

Legal Basis

Regulations forming legal basis for the preparation of the Guidelines are: 

  1. Law No. 8 of 1995 on the Capital Market.
  2. Law of the Republic of Indonesia No. 40 of 2007 on Limited Liability Companies.
  3. Law of the Republic of Indonesia No. 21 of 2011 on Financial Service Authority (Otoritas Jasa Keuangan).
  4. Regulation of Financial Service Authority (Otoritas Jasa Keuangan) No. 33/POJK.04/2014 on the Board of Directors and Board of Commissioner of Public Company.
  5. The Company’s Article of Association.

 

Definitions

  • The Company refers to PT PAKUWON JATI Tbk 
  • The Company’s Organs refers to General Meeting of Shareholders, the Board of Commissioner and the Board of Directors. 
  • General Meeting of Shareholders (GMS) is a Company Organ with authority not granted to the Board of Directors or the Board of Comissioners, within the limitations set by laws and/or the Articles of Association. 
  • The Board of Directors, is a Company Organ that is authorized and fully responsible for managing the Company in the interest of the Company, in accordance with its purposes and objectives, and represents the Company both inside and outside of court as stipulated in the Articles of Association.
  • The Board of Commissioner, is a Company Organ responsible for conduction general and/or specific supervision in accordance with the Articles of Association, and for providing advice to the Board of Directors. 
  • The Independent Commissioner is a member of the Board of Commissioner coming from out of the Company and has no conflicts of interest, and meets the requirements to be an Independent Commissioner as stipulated in the Regulation of Financial Service Authority. 

 

Values 

The Board of Directors and the Board of Commissioners must strive to implement values that align with and do not contradict the principles of Good Corporate Governance: Transparency, Accountability, Resposibility, Independency, Fairness, in the operation and management of the Company. 

 

BOARD OF DIRECTORS

 

Board of Directors Criteria 

  1. Possess good character, morals and integrity as well as competency in performing legal acts;
  2. In the 5 (five) years prior to appointment and during the term of office:
  3. Has never been declared bankrupt
  4. Has never served as a member of the Board of Directors and/or the Board of Commissioners who was found guilty of causing a company to be declared bankrupt;
  5. Has never been convicted for committing a criminal offense that caused financial loss to the state and/or is related to the financial sector;
  6. Has never served as a member of the Board of Directors and/or Board of Commissioners during which:
    • Failed to hold Annual General Meeting of Shareholders (AGMS)
    • His/her accountability as a member of the Board of Directors and/or Board of Commissioners was not accepted by the AGMS or failed to provide accountability to the AGMS; and
    • Caused a company that obtained a license, approval, or registration from the Financial Services Authority (OJK) to fail in submitting its Annual Report and/or Financial Statements to the OJK.
  7. Have a commitment to comply with laws and regulations; and
  8. Possess knowledge and/or expertise in the field required by The Company.

 

Duties of Board of Directors

  1. Comply with the articles of association and applicable laws and regulations and implement the principles of Good Corporate Governance.
  2. Manage the Company in accordance with the articles of association and applicable laws and regulations, including its subsidiaries.
  3. Organize the Annual General Meeting of Shareholders and other GMS as required.
  4. Prepare the Shareholder Register, Special Register, Minutes of GMS, and Meeting Minutes.
  5. Conduct Board of Directors’ Meetings.
  6. If needed, establish committees to support the effective execution of their duties and responsibilities and evaluate the performance of those committees at the end of each fiscal year.
  7. Carry out their duties to manage the Company in good faith, with full responsibility, and without conflicts of interest.

 

Responsibilities of the Board of Directors

  1. Each member of the Board of Directors is jointly and severally responsible for losses suffered by the Company due to errors or negligence in performing their duties.
  2. A member of the Board of Directors is not liable for such losses if they can prove:
  3. The loss was not due to their error or negligence;
  4. They managed the Company in good faith, responsibly, and carefully in the interests and in accordance with the purposes of the Company;
  5. They had no conflict of interest, directly or indirectly, in the management actions that led to the loss; and
  6. They took action to prevent the loss or its continuation.

 

Authority of the Board of Directors

  1. The Board of Directors has the authority to manage the Company as stipulated in Article 12 of POJK No. 33/2014, in line with policies deemed appropriate and aligned with the purposes and objectives set out in the articles of association.
  2. The Board of Directors has the authority to represent the Company both in and out of court.

 

Working Time 

The Board of Directors must allocate sufficient time to perform their duties and responsibilities optimally.

 

Board of Director’s Meeting Policy

  1. The Board of Directors must hold regular meetings at least once every month.
  2. Such meetings can proceed if the majority of the Board members are present.
  3. A joint meeting with the Board of Commissioners must be held at least once every four months.
  4. Meetings must be scheduled for the following year before the current fiscal year ends.
  5. For scheduled meetings, materials must be provided to participants at least five (5) days before the meeting.
  6. For unscheduled meetings, materials must be provided no later than the time the meeting is held.

Attendance in Board Meetings

The attendance quorum of Board members must comply with regulations and be disclosed in the Company’s annual report.

 

Decision-Making Process

Decisions of the Board meetings are made based on deliberation and consensus. If no consensus is reached, decisions are made by majority vote.

 

Meeting Minutes of the Board of Directors

  1. Meeting outcomes must be recorded in minutes, signed by all attending Board members, and distributed to all members.
  2. Joint meetings with the Board of Commissioners must also be recorded and signed by all attendees from both Boards and shared accordingly.
  3. If any member refuses to sign, they must provide a written explanation attached to the minutes.
  4. Meeting minutes must be documented by the Company.

 

Reporting and Accountability of the Board of Directors 

The board of Directors must report and be accountable for the Company’s management at the Annual General Meeting of Shareholders to obtain approval.

 

Performance Evaluation of the Board of Directors

The Company a policy on evaluating the Board of Directors as stated in the Board Manual. According to the policy, performance is assessed based on corporate Key Performance Indicators (KPI). The Board's collective KPI corresponds to the President Director’s KPI, which is further broken down for each Board member based on their duties, functions, and responsibilities. Each member aligns their directorate’s goals and initiatives and assesses performance through their individual KPIs to support corporate strategic targets.

 

The Board is then evaluated by the shareholders based on a review of data compared to targets in the Management Contract. The Board of Commissioners also evaluates performance achievements based on this data. Annual KPI achievements are reported to the shareholders at the Company’s Annual General Meeting of Shareholders.

 

Performance Assessment Criteria

Performance assessment of the Company’s Board of Directors is based on the following criteria:

  1. Leading, managing, and controlling the Company according to its objectives;
  2. Efforts to improve efficiency and effectiveness;
  3. Controlling, maintaining, and managing the Company’s assets
  4. Preparing an annual work plan including the Company’s budget and submitting it to the Board of Commissioners for approval before the start of the next fiscal year.

 

Competency Development Program for the Board of Directors

The Company has policies and actual practices to encourage Board members to participate in ongoing professional education programs. These programs aim to provide up-to-date information on the business and company policies and share knowledge according to their capabilities to support their duties in managing the Company.

 

BOARD OF COMMISSIONERS

 

Board of Commissioners criterias: 

  1. Possess good character, high morals, and integrity, as well as being competent in performing legal acts;
  2. Within five (5) years before appointment and during the term of office:
  3. Has never been declared bankrupt;
  4. Has never served as a member of the Board of Directors and/or the Board of Commissioners found guilty of causing a company to be declared bankrupt;
  5. Has never been convicted of a crime that caused financial losses to the state and/or is related to the financial sector;
  6. Has never served as a member of the Board of Directors and/or Board of Commissioners during which:
    • Failed to hold the Annual General Meeting of Shareholders (AGMS);
    • Their accountability as a member of the Board of Directors and/or Board of Commissioners was not accepted by the AGMS or failed to provide accountability to the AGMS;
    • Caused a company that obtained a license, approval, or registration from the Financial Services Authority (OJK) to fail in submitting its Annual Report and/or Financial Statements to OJK.
  7. Have commitment to comply with laws and regulations;
  8. Possess knowledge and/or expertise in the field required by the Company.

 

Duties of the Board of Commissioners

  1. The Board of Commissioners supervises and is responsible for the supervision of management policies, the general running of the Company, both in terms of the Company and its business, and provides advice to the Board of Directors.
  2. Each member must perform their duties and responsibilities with good faith, full responsibility, and caution.
  3. To support the effectiveness of their duties, the Board of Commissioners is required to form an Audit Committee and may form other committees.
  4. The Board of Commissioners must evaluate the performance of the committees supporting their duties at the end of each fiscal year.
  5. Supervision must be carried out with good faith, full responsibility, and without any conflict of interest.

 

Responsibilities of the Board of Commissioner

  1. Each member is jointly and severally liable for losses suffered by the Company due to errors or negligence in carrying out their duties.
  2. A member shall not be held liable for such losses if they can prove:
  3. The loss was not due to their error or negligence;
  4. They acted in good faith, responsibly, and cautiously for the Company’s benefit and in line with its objectives;
  5. They had no direct or indirect conflict of interest in the supervisory actions causing the loss;
  6. They took action to prevent or mitigate the loss.

 

Authority of the Board of Commissioner 

  1. Has the authority to temporarily dismiss members of the Board of Directors, stating the reasons.
  2. May assume management duties in special situations for a limited period.
  3. This authority is stipulated in the articles of association or a decision of the General Meeting of Shareholders (GMS).

 

Working Time of the Board of Commissioner

The Board must allocate sufficient time to perform its duties and responsibilities optimally.

 

Working Procedures

  1. Decisions in meetings are made by consensus.
  2. If consensus is not reached, decisions are made by majority vote.
  3. Any dissenting opinions during decision-making must be clearly documented in the meeting minutes with the reasons provided.
  4. Meeting outcomes must be documented by the Company.

 

Meeting Arrangements 

Meeting concerning Nomination and/or Remuneration must be held at least once every four (4) months. Such meetings can only proceed if:

  1. A majority of Board members are present;
  2. At least one of the majority is an Independent Commissioner.

 

Board Meeting Policy

  1. Must hold a meeting at least once every two (2) months.
  2. Meetings are valid if a majority of members are present.
  3. Must hold joint meetings with the Board of Directors at least once every four (4) months.
  4. Quorum requirements must comply with regulations and be disclosed in the Company’s annual report.

 

Decision-Making 

Decisions are made by consensus. If consensus is not reached, majority vote is used.

 

Minutes of Meetings 

  1. Meeting outcomes must be recorded, signed by all attending members, and distributed to all Board members.
  2. Joint meeting outcomes with the Board of Directors must be signed by attendees from both Boards and distributed accordingly.
  3. Members who do not sign the minutes must state their reasons in writing, attached to the meeting minutes.
  4. Meeting minutes must be documented by the Company.

 

Reporting and Accountability 

The Board of Commissioners must report and be accountable for their supervision results at the AGMS to obtain approval.

 

Nomination and Remuneration Functions

To comply with Financial Services Authority Regulation No. 34/POJK.04/2014 on the Nomination and Remuneration Committee of Public Companies (Article 20), the Board of Commissioners carries out these functions.

 

Nomination Function

In carrying out this function, the Board must:

  1. Arrange the composition and nomination process of members of the Board of Directors and/or Board of Commissioners;
  2. Draft policies and criteria required in the nomination process;
  3. Assist in performance evaluations of the Board of Directors and/or Board of Commissioners;
  4. Develop capability improvement programs;
  5. Review and propose eligible candidates to the GMS.

 

Remuneration Function

In carrying out this function, the Board must:

  1. Draft the remuneration structure for Board members, which may include salary, honorarium, incentives, and/or allowances, fixed and/or variable.
  2. Draft remuneration policies by considering:
  3. Industry standards;
  4. Duties, responsibilities, and authorities of each member in achieving goals and performance;
  5. Performance targets and achievements of each member;
  6. Balance between fixed and variable components.
  7. Determine the amount of remuneration, structure, and policies, which must be evaluated at least once a year by the Nomination and Remuneration Committee.

 

Performance Evaluation of the Board of Commissioners

The Board conducts collective performance assessments in accordance with POJK No. 21/POJK.04/2015 and SEOJK No. 32/SEOJK.04/2015.

The evaluation includes:

  1. Setting key performance indicators based on criteria such as supervisory effectiveness and support for good corporate governance;
  2. Conducting self-assessment for:
    • Each member individually
    • The Board as a collegial unit, based on criteria recommended by the Nomination and Remuneration Committee;
  3. The AGMS evaluates the Board’s performance based on the Annual Report.

 

Performance Evaluation Criteria

  1. Execution of each Commissioner’s duties and functions;
  2. Compliance of the Company with regulations
  3. GCG (Good Corporate Governance) practices implemented by the Board
  4. Attendance in Board and committee meetings;
  5. Involvement in special assignments.

 

Reporting System

Company activities must disclose in the annual report and corporate website at least:

  1. Explanation if the Nomination and Remuneration Committee is not formed;
  2. Description of Nomination and Remuneration functions carried out in the fiscal year.

 

Competency Development Program for the Board of Commissioners

The Company has policies, practices, and active programs that encourage members to participate in ongoing professional education.

These programs aim to provide updated information on the Company’s business and policies and share knowledge according to their capabilities to support their supervisory duties.

 

RELATIONSHIP BETWEEN COMPANY ORGANS

 

Basic Principles of the Working Relationship between the Board of Directors and the Board of Commissioners

  1. The working relationship between the Board of Directors and the Board of Commissioners is based on the principles of transparency and mutual respect.
  2. Every interaction between the Board of Directors and the Board of Commissioners in the context of their respective duties and responsibilities is formal in nature.
  3. Informal interactions may occur but are not binding until formally decided in a joint meeting of the Board of Directors and the Board of Commissioners.
  4. Information requested by the Board of Directors or the Board of Commissioners must be related to and for the benefit of the Company.
  5. The Board of Directors may reject a request for information from the Board of Commissioners if the information is not related to the responsibilities of the Board of Directors.
  6. The Board of Commissioners may communicate with management under the Board of Directors’ supervision with the knowledge of or accompanied by the Board of Directors.

 

Joint Meetings of the Board of Directors and Board of Commissioners

The Board of Directors and the Board of Commissioners must hold joint meetings regularly, at least once every four (4) months. Attendance at these Joint Meetings must be disclosed in the Company’s Annual Report.

 

Sanction Provisions 

Members of the Board of Directors and/or the Board of Commissioners who are proven to have violated the provisions of the Articles of Association and/or the Company’s Code of Ethics may, through a decision of the Joint Meeting of the Board of Directors and Board of Commissioners, be subject to administrative or non-administrative sanctions.

 

Amendments 

The Work Guidelines for the Board of Directors and Board of Commissioners are reviewed periodically in line with the dynamics, interests, and business developments of the Company.

 

Closing

These Work Guidelines for the Board of Directors and the Board of Commissioners shall take effect as of the date they are established.