Good Corporate Governance (GCG) is a company management system that reflects the synergistic relationship between management and shareholders, creditors, governments, suppliers and other stakeholders. The implementation of GCG in a Company is significant to ensure the Company’s sustainability and support the development of a healthy business environment and adding value to all stakeholders. By applying GCG principles, a Company can survive and remains tough in overcoming intense business competition. GCG is expected to be a better means to achieve Vision, Mission and Corporate Objectives.
GCG Principles, which consist of Transparency, Accountability, Responsibility, Independence and Justice must be implemented thoroughly and consistently and become the soul and spirit of every Insan Pupuk Kaltim. As a result, GCG will provide protection for stakeholders and ultimately GCG will help create a conducive environment for sustainable business growth.
Implementation of Good Corporate Governance
The implementation of Good Corporate Governance (GCG) is a form of Pupuk Kaltim’s compliance to the circular letter of PT Pupuk Indonesia (Persero) as a shareholder of Pupuk Kaltim based on SE-08/XI/2012 on November 27, 2012, regarding the Implementation of Good Corporate Governance for the subsidiaries of PT Pupuk Indonesia (Persero).
The implementation of Good Corporate Governance in Pupuk Kaltim aims to:
- Optimize the corporate values, in order to make the Company be highly competitive, both nationally and internationally, so as to maintain the Company’s existence and its sustainability to achieve its aims and objectives.
- Encourage the management of the Company in a professional, efficient, and effective manner and empower the functions and increase the independence of the Company’s Organ.
- Encourage the Company’s organ to be able to make decisions and execute actions based on high moral values and compliance with laws and regulations, and aware of the social responsibility of the Company toward the Stakeholders and the sustainability of the surrounding environment.
- Increase Company's contribution in the national economy.
- Improve conducive environment for the development of national investment.
Good Corporate Governance Commitment
Pupuk Kaltim is committed to implement GCG by issuing Directors' Decree No. 13/DIR/III.2012 regarding the improvement of Pupuk Kaltim’s structure of organization by forming Compliance and Risk Management Department as the work unit to manage GCG, with regard to the Compliance and Risk Management.
Based on the direction of the Shareholders according to letter No. U-1283/A00000.UM/2014 dated September 5, 2014 on the Standardization Policy of Corporate Governance and Risk Management Work Unit, on December 8, 2014 stipulated Decree No. BOD. 50/DIR/X.2014 valid from October 1, 2014 on the Improvement of Directors' Decision Letter concerning the Organizational Structure of PT Pupuk Kalimantan Timur, the Compliance and Risk Management Department changed its name into Department of Corporate Governance and Risk Management.
In the implementation of GCG, Pupuk Kaltim issued Board of Director’s Decree (SKD) No. 40/DIR/VII.2013 dated July 8, 2013 regarding the implementation of GCG in Pupuk Kaltim, which is an improvement of the SKD No. 4/DIR/II. 2010 regarding the Improvement of Code of Conduct of PT Pupuk Kalimantan Timur, which include:
- Establish and enforce "Code of Good Corporate Governance of PT Pupuk Kalimantan Timur", as set out in Attachment I to this Board of Directors Decree, as the main reference for the implementation of Good Corporate Governance at PT Pupuk Kalimantan Timur. This Decree is further called "GCG PKT Guidelines",
- Establish and enforce "Manual of Board of Commissioners and Board of Directors (Board Manual) of PT Pupuk Kalimantan Timur", as stated in Attachment II, as the main reference and govern the relationship between the Board of Commissioners and the Board of Directors in PT Pupuk Kalimantan Timur.
The implemented GCG practices are:
- All important transactions that require Shareholders approval are executed in compliance to the regulation. Shareholders have directed the Board of Directors to make various breakthroughs in responding to market conditions.
- The Board of Commissioners has a Board Manual that regulates functions, tasks and responsibilities
- The Board of Directors has made changes to the organizational structure, anticipating business and strategy development, implementing risk management, conducting risk self-assessment and improving the quality management capability
- The Corporate Secretary delivers the information to stakeholders periodically, clearly and accurately, through print and electronic media.
- The Company has established a GCG Self-Assessment Team and conducts assessments based on parameters drawn up by BPKP.