IFC will advise and support OJK in developing a Corporate Governance Road Map to identify gaps and challenges in Indonesia's regulatory framework, covering areas such as shareholder rights, protection of minority shareholders, corporate board practices, and disclosure and transparency. They will also finalize an Indonesia Corporate Governance Manual, an instrument developed by IFC in many other regions to provide best practice guidelines to practitioners, board members and policymakers.
"Indonesia needs to have a fundamentally sound and sustainable financial system that is capable of protecting the interests of consumers and society," said Muliaman D. Hadad, chairman of OJK. "To achieve that objective, OJK has initiated strategic initiatives to enhance corporate governance in Indonesia, such as the introduction of the Annual Report Awards. IFC's support to OJK will help us further raise the transparency and competitiveness of Indonesian public companies going forward."
As an independent regulator, OJK recognizes the importance of a fair, transparent, and accountable governance system in the financial sector. Together with IFC, OJK will organize public events in order to disseminate the road map and the manual to the private sector.
IFC established its corporate governance program in Indonesia in June 2012 and has conducted 10 seminars and conferences, such as a women leaders' forum, training for family businesses, and lectures at some Indonesian universities. IFC is also helping private firms improve their corporate governance practices.
"Good corporate governance standards and practices help improve the competitiveness and sustainability of businesses, ultimately fostering economic development," said Sergio Pimenta, IFC Director for East Asia and Pacific. "Our cooperation with Indonesia's OJK will help strengthen the country's financial system."
IFC has contributed to the development of 48 corporate governance codes in 32 countries. In East Asia and the Pacific, IFC produces an annual corporate governance scorecard for large Vietnamese listed companies; it has also partnered with China's Shenzhen Stock Exchange to enhance corporate board performance.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world's most pressing development challenges. For more information, visit www.ifc.org.
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