TABLE OF CONTENT - Bank BJB · 3 Implementation of Good Corporate Governance (GCG) of bank bjb year...
Transcript of TABLE OF CONTENT - Bank BJB · 3 Implementation of Good Corporate Governance (GCG) of bank bjb year...
i Table of content
TABLE OF CONTENT
A. Background ................................................................................................................. 1
A.1 Key Principles ..................................................................................................... 1
A.2 Good Corporate Governance Assessment ........................................................ 1
A.3 Vision, Mission, and Corporate Values of the Bank ........................................ 2
A.4 Organizational Structure .................................................................................. 3
B. Implementation of Good Corporate Governance of the Bank ................................ 3
B.1 Execution of Duties and Responsibilities of the Board of Commissionersand Board of Director ....................................................................................... 3
B.1.1 The Board of Commissioners ................................................................... 3
B.1.1.1 Amount and Composition of the Board of Commissioners ...... 3
B.1.1.2 Criteria of the Member of the Board of Commissioners .......... 4
B.1.1.3 The Duties and Responsibilities of the Board ofCommissioners ............................................................................
5
B.1.1.4 The Board of Commissioners’ Independence ............................ 7
B.1.1.5 Recommendation from the Board of Commissioners .............. 7
B.1.2 Board of Directors .................................................................................... 9
B.1.2.1 Number and Composition of the Board of Directors ............... 9
B.1.2.2 Criteria of the Members of the Board of Directors .................. 9
B.1.2.3 Duties and Responsibilities of the Board of Directors ............. 10
B.2 Instrument and the Performance of Committees ............................................ 13
B.2.1 Audit Committee ..................................................................................... 14
B.2.1.1 Independence of the Audit Committee Members .................... 15
B.2.1.2 The Roles and Responsibilities of the Audit Committee ......... 15
B.2.1.3 Meetings and Attendance of the Audit Committee ................. 24
B.2.1.4 The Implementation of the Task of the Audit Committee ...... 24
B.2.2 Risk Monitoring Committee ................................................................... 26
B.2.2.1 Independence of Risk Monitoring Committee Members ........ 27
B.2.2.2 The Roles and Responsibilities of the Risk MonitoringCommittee .................................................................................... 27
B.2.2.3 Meeting and Attendance of the Risk Monitoring Committee . 28
B.2.2.4 Implementation of Risk Monitoring Committee Duties ......... 28
B.2.3 Nomination and Remuneration Committee ......................................... 29
B.2.3.1 Nomination and Remuneration Committee Independence .... 30
B.2.3.2 The Roles and Responsibilities of the Nomination andRemuneration Committee .......................................................... 30
B.2.3.3 Meetings and Attendance of the Nomination andRemuneration Committee .......................................................... 32
B.2.3.4 Implementation of the Task of the Remuneration andNomination Committee .............................................................. 32
B.2.4 Integrated Good Governance Committee ............................................. 33
B.2.4.1 The Independence of the Integrated Good GovernanceCommittee .................................................................................... 34
B.2.4.2 The Roles and Responsibilities of of the Integrated GoodGovernance Committee .............................................................. 34
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B.2.4.3 Meeting and Attendance of the Integrated Good GovernanceCommittee .................................................................................... 35
B.2.4.4 Implementation of the Task of the Integrated GoodGovernance Committee .............................................................. 35
B.2.5 Business & Credit Monitoring Committee ............................................ 36
B.2.5.1 Business & Credit Monitoring Committee ................................ 36
B.2.5.2 The Roles and Responsibilities of the Business and CreditMonitoring Committee ............................................................... 37
B.2.5.3 Meeting and Attendance of Business Monitoring and CreditCommittee .................................................................................... 37
B.2.5.4 Implementation of the Task of the Business Monitoring andCredit Committee ........................................................................ 37
B.3 Implementation of Compliance Function, Internal and External Audit ....... 38
B.3.1 Implementation of Compliance Function .............................................. 38
B.3.1.1 Compliance Function .................................................................. 38
B.3.1.2 The Roles and Responsibilities of the Compliance Work Unit 39
B.3.1.3 Monitoring implementation of Anti Money Laundering andCounter Terrorist Financing (APL-CFT) .................................... 42
B.3.2 Implementation of Internal Audit Function ......................................... 44
B.3.3 Implementation of External Audit Function ......................................... 46
B.4 Implementation of Risk Management and Internal Control System ............. 47
B.4.1 Risk Management Implementation ........................................................ 47
B.4.2 Internal Control System ......................................................................... 59
B.5 Credit Grant to Related Parties and Large Exposures ..................................... 61
B.6 The Bank’s Strategic Plan .................................................................................. 62
B.7 Bank’s Learning and Training 2016 ................................................................... 67
B.7.1 Competence Development of the Board of Commissioners ................ 67
B.7.2 Development of the Board of Directors Competency .......................... 68
B.7.3 Employee Training Information ............................................................. 68
B.8 Company Secretary ............................................................................................ 70
B.9 Bond Rating ........................................................................................................ 71
B.10 Good Corporate Governance Activity of 2016 .................................................. 71
C. Share Ownership of the Members of the Board of Commissioners and Board ofDirectors that Reach 5% (five percent) or More from the Paid-in Capital ............ 72
D. Financial Relationships and Family Relationships of the Members of the Boardof Commissioners and the Board of Directors with Other Members of TheBoard of Commissioners, the Board of Directors and/or The Bank’s ControllingShareholder ................................................................................................................. 73
E. Human Resources Management ............................................................................... 73
E.1 Human Resoures Planning ................................................................................. 73
E.2 Recruitment of Human Resources .................................................................... 74
E.3 Career Development Policy ............................................................................... 74
E.4 Employee Competency Development .............................................................. 75
E.5 Competency Development Policy ..................................................................... 75
E.6 Performance Management System ................................................................... 75
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E.7 Corporate Recognition to All Employee ........................................................... 76
E.8 Employee Remuneration Strategy .................................................................... 77
F. The Frequency of the Board of Commissioners and the Board of DirectorsMeeting ....................................................................................................................... 78
G. Number of Internal Fraud ......................................................................................... 79
H. Litigation Cases .......................................................................................................... 79
I. Conflict of Interest Transaction ................................................................................ 80
J. Buy Back Shares and/or Buy Back Bonds ................................................................. 80
K. Social Activities Funding for 2016 ............................................................................. 80
L. General Conclusion of Self Assessment Results Implementation of GoodCorporate Governance Bank Implementation for Year 2016 ..................................
82
1 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Implementation of Good Corporate Governance of bank bjbYear 2016
A. Background
To build on its success PT. Bank Pembangunan Daerah Jawa Barat dan Banten, Tbk.,
hereinafter referred to as the Bank, needs to adapt with any changes. The changes faced
by the Bank in performing its business activities require professional and consistent
management of the company. Such changes can be the motivator to perform a good
corporate governance across the company’s process. Based on the above considerations,
the Bank strives to make the good governance principles as one of the main pillars in
undertaking all of its business activities. The commitment is made so the Bank can
always give extra value to all the stakeholders, i.e. the customers, investors, shareholders.
public in general, and bjb employees for all the trust they have put to the Bank.
A.1 Key Principles
Good Corporate Governance is always founded on these 5 basic principles, i.e.:
a. Transparency, the openness in providing material and relevant information as
well as in its decision-making process;
b. Accountability, the clarity of the functions and accountability from the Bank’s
elements to ensure effective management;
c. Responsibility, compliance of the Bank management to the prevailing
legislations and sound bank management principles;
d. Independency, the professional management of the Bank without any
influence/pressure from any parties;
e. Fairness, the absence of favoritism and equality to fulfill the rights of the
stakeholders due the contractual agreement and prevailing legislations
requirements.
To implement Good Corporate Governance (GCG) practice, the Bank has committed
to make the GCG principles in conformity with its policies as the foundation in
performing its business activities. This is consistent with the Financial Services
Authority’s objective to improve the good governance practice of the banking sector
as stated in the Financial Services Authority Regulation number 55/POJK.03/2016
and Concerning the Implementation of Good Governance for Commercial Bank and
Circular Letter of the Financial Services Authority number 13/SEOJK.03/2017
Concerning the Implementation of Good Corporate Governance for Commercial
Bank.
A.2 Good Corporate Governance Assessment
Assessments have been preformed to ensure the implementation of 5 basic
principles of GCG by the Bank. Using the self-assessment method, the Bank has
performed the assessments on a regular basis. The assessments were made by
evaluating 11 (eleven) GCG implementation factors:
2 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
a. Execution of duties and responsibilities of the Board of Commissioners;
b. Execution of duties and responsibilities of the Board of Directors;
c. Establishment of the Committee and performance of its duties;
d. Conflict of interest management;
e. Implementation of compliance function;
f. Implementation of internal audit function;
g. Implementation of external audit functions;
h. Implementation of risk management including its internal control system;
i. Credit grant to related parties and large exposures;
j. Transparency of the Bank's financial and non-financial conditions, Good
Corporate Governance implementation, and internal reporting;
k. The Bank’s Strategic Plan
The assessments of 11 (eleven) GCG implementation factors were carried out in a
governance system comprising of 3 (three) assessment components, i.e. governance
structure, governance process, and governance outcome.
A.3 Vision, Mission, and Corporate Values of the Bank
As an organization, the Bank expresses its objectives in the following vision and
mission:
Vision:
To be the Indonesian Top 10 Most Performing Bank.
Mission:
- To be the motor and driver of the regional economy;
- To be the region's money management;
- One of the region’s original sources of income.
To achieve the vision and mission, the Bank nurtures corporate values so that all
the Bank’s employees have the shared perceptions on the actions that the Bank
need to take to run aligned business activities. The corporate values set by the Bank
are also founded on the principles of transparency, accountability, responsibility,
independence, and fairness which also the foundation of GCG implementation.
These established corporate values are embodied in the tagline of Go SPIRIT in
order to facilitate the implementation.
Go SPIRIT
Corporate Values Main Behavior
Service Excellence1. Friendly, sincere, family relationship
2. Continuous excellent service
Professionalism
3. Fast, precise, accurate
4. Competent and responsible
5. Understands and in compliance with the company policies.
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Integrity
6. Consistent, disciplined, and passionate
7. Keeping good image of the Bank through exemplary
behavior and ethics
Respect8. Customer-focused
9. Care for the environment
Intelligence
10. Always provides the best solution
11. Strong determination to develop themselves
12. Open to positive change
Trust13. Nurture transparency, unity, and positive collaboration
14. Maintain the bank’s and company’s confidentiality
A.4 Organizational Structure
Implementation of GCG in the Bank is based on the joint commitment of all Bank
personnel to follow and comply with all applicable regulations. This is implemented
through Bank’s organizational structure that reflects the GCG principles. The
Bank’s organizational structure consists of main organs (General Meeting of
Shareholders, Board of Commissioners, and Board of Directors) and supporting
organs (Committees, Internal Audit Work Unit, Risk Management Work Unit, and
Company Secretary)
B. Implementation of Good Corporate Governance of the Bank
B.1 Execution of Duties and Responsibilities of the Board of Commissioners and
Board of Directors
B.1.1 The Board of Commissioners
B.1.1.1 Amount and Composition of the Board of Commissioners
(a) Pursuant to the Decision of the Annual General Meeting of
Shareholders PT. Bank Pembangunan Daerah Jawa Barat dan
Banten, Tbk., as written in the Deed of Statement of The
Business andSupporting Work
Unit
Internal Audit ComplianceRisk
Management
Board of
Directors
General Meeting ofShareholders
The Board of
Commissioners
CompanySecretary
Audit Committee
Nomination andRemuneration Committee
Risk Monitoring Committee
Integrated GoodGovernance Committee
Business & Credit MonitoringCommittee
Risk ManagementCommittee
IT Steering Committee
Asset & Liability Committee
Integrated Risk ManagementCommittee
4 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Annual General Meeting of Shareholders number 119 dated 31
March 2015, the structure of the Bank’s Board of
Commissioners is:
i. Commissioner : Muhadi
ii. Independent Commissioners : Klemi Subiyantoro
iii. Independent Commissioners : Rudhyanto Mooduto
iv. Independent Commissioners : Yayat Sutaryat
(b) Pursuant to the Decision of the Annual General Meeting of
Shareholders PT. Bank Pembangunan Daerah Jawa Barat dan
Banten, Tbk., as written in the Deed of Statement of the
Resolution of The Annual General Meeting of Shareholders
number 61 dated 23 March 2016, the structure of the Bank’s
Board of Commissioners is:
i. Commissioner : Muhadi
ii. Independent Commissioners : Klemi Subiyantoro
iii. Independent Commissioners : Rudhyanto Mooduto
iv. Independent Commissioners : Yayat Sutaryat
v. Independent Commissioners : Suwarta
B.1.1.2 Criteria of the Member of the Board of Commissioners
The criteria for members of the Board of Commissioners refer to
the Financial Services Authority Regulation number
33/POJK.04/2014 dated 08 December 2014 Concerning the Board of
Directors and the Board of Commissioners of Issuers or Public
Companies. The Board of Commissioners of the Bank has passed
the fit and proper test which means that they have met the
prerequisites criteria. The Board of Commissioners of the Bank is
an individual who meets the requirements when appointed and
during the service:
(a) Having good character, morals. and integrity;
(b) Competent in taking legal actions;
(c) Five (5) years before and during the service year:
i. has never been declared bankrupt;
ii. has never been the member of the Board of Directors
and/or member of the Board of Commissioners who is
declared to cause a company’s bankruptcy;
iii. has never been sentenced due to criminal actions that
causes losses to the state’s finance and/or related to the
financial sector; and
iv. has never been the member of the Board of Directors
and/or the Board of Commissioners, who is during his
service:
has never convened to perform annual GMS;
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his accountability as the member of the Board of
Directors and/or the member of Board of
Commissioners was previously unacceptable or failed
to provide an accountability as a member of the Board
of Directors and/or the member of the Board of
Commissioners to the GMS; and
has caused the Company with the permit, approval, or
registration from the Financial Service Authority to
fail in meeting the obligation in providing the annual
report and/or financial report to the Financial Services
Authority.
(d) Committed to comply with the laws and legislations; and
(e) Has the knowledge and/or skills required by the Company.
B.1.1.3 The Duties and Responsibilities of the Board of
Commissioners
The duties and responsibilities of the Board of Commissioners are
expressed in the Guidelines and Code of Conduct of the Board of
Commissioners stipulated in the Decree of the Board of
Commissioners number 07/SK/DK/2016 dated 14 October 2016
Concerning the Guidelines and Code of Conduct of the Board of
Commissioners. The following are the duties and responsibilities of
the Board of Commissioners based on the Guidelines and Code of
Conduct of the Board of Commissioners:
(a) Monitor, advise, direct, supervise and evaluate the
management of the Bank and the implementation of the
Bank’s strategic policy by the Board of Directors;
(b) Perform the duty, responsibilities, and authorities according to
the Company’s Articles of Association, decision GMS and
prevailing rules and regulations;
i. Prepare and evaluate the Guidelines and Code of Conduct
of the Board of Commissioners that bind each member of
the Board of Commissioners;
ii. Evaluate and approve the Bank’s Business Plan (RBB);
iii. Based on the resolutions of the GMS, Board of
Commissioners appoints a Public Accountant upon the
recommendation of the Audit Committee to audit the
Company's financial statements.
(c) Carry out the duties and responsibilities independently and
responsibly to the GMS;
(d) Requirement to ensure the implementation of GCG in every
business activity of the Bank at all levels or organization level;
6 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(e) Requirement to establish committees and ensure that their
performance is effective according to prevailing rules and
regulation.
(f) Prohibition to involve in the decision making of Bank
operational activities, unless otherwise stated in in the Articles
of Association or prevailing laws and legislations;
(g) The approval granted by the Board of Commissioners is part of
the supervisory duties of the Board of Commissioners therefore
not eliminating the Board of Director's responsibility in the
management of the Bank. Such supervisory duties of the Board
of Commissioners are the form of initial monitoring that must
be performed;
(h) Review and approve the policy that according to the prevailing
rules and legislations require the Board of Commissioners’
approval;
(i) Review the the Board of Directors' accountability on the
execution of previously approved policies;
(j) Create a report on the supervisory duty that has been
performed during past financial year for the GMS;
(k) Evaluate and sign the annual report prepared by the Board of
Directors. Annual report reviews to be conducted prior to the
GMS;
(l) Ensure that the Board of Directors has followed up the audit
findings and audit recommendations from the Bank’s Internal
Audit Work Unit (SKAI), external auditors, the results of the
Financial Services Authority and/or other authority's
supervision result;
(m) Notify the Financial Services Authority at no later than 7
(seven) working days upon the discovery of:
i. Violations of financial and banking laws and regulation;
ii. Circumstances or predictions of circumstances that could
jeopardize the Bank's business based on the findings and
recommendations from the committees assisting the
Board of Commissioners in supervising the Bank’s
operation: and
iii. Other compulsory requirements above that yet or were
not reported by the Bank and/or bu the Director of the
Compliance to the Financial Services Authority.
(n) Define and perform a transparent nomination system,
evaluation, remuneration for all the Management after
considering the results of all Nomination and Remuneration
Committee study that will subsequently submitted for GMS
approval.
7 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.1.1.4 The Board of Commissioners’ Independence
The Board of Commissioners always strives to ensure that the
Company has been managed professionally, according to the
shareholders’ and other stakeholders’ interest. The Board of
Commissioners always maintains objectivity and independence in
performing its role. For that reasons, the Board is not involved in
the Company’s operational decision making, unless for aspects that
have been governed and stipulated in the Articles of Association
and the laws and regulations.
Additionally, considering the composition of the Company’s Board
of Commissioners as of 31 December 2016 which in total was 5 (five)
persons, 4 (four) of them were the Independent Commissioners or
80% of the member of the Board of Commissioners were from
Independent Commissioners. The Independence of Independent
Commissioners is evident in the Certificate of Independent issued
and signed by all of Independent Commissioners.
B.1.1.5 Recommendation from the Board of Commissioners
As part of its duties and responsibilities, the Board of
Commissioners proactively monitored and provided feedback to
the the Board of Directors. The Board of Commissioners monitors
the Board of Directors by referring to its recommendation to the
Board of Directors or to the established committees. During the
period of January to December 2016 period, the Board of
Commissioners have performed the following:
(a) Supervised the management’s policy, the management of the
Company by the Board of Directors including the supervision
of:
i. The Bank’s Business Plan 2016-2018;
ii. The Company’s Annual Work Plan and Budget (RKAP).
iii. Monthly Performance Evaluation;
iv. The provisions of Articles of Association and Resolutions
of the GMS;
v. The rules and legislations for the the Company’ and
business’ so it aligns with the purpose and objectives of
the Company.
(b) "Performing the duties that have been specifically assigned to
the Board of Directors according to the Articles of Association,
laws and regulations, Central Bank (BI) and/or Financial
Service Service provisions. and GMS.
i. Monitoring and reporting the implementation of the GCG
action plan;
8 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
ii. Supervising and advising the Board of Directors in
conducting the Company's business activities (Board of
Directors’ management policy);
iii. Supervising the effectiveness of GCG implementation at
all levels of the Bank’s organization;
iv. Supervising the implementation of risk management;
v. Monitoring and evaluating the performance of the Board
of Directors;
vi. Monitoring the Bank's compliance and commitment to
Bank Indonesia/Central Bank regulations, prevailing laws
and legislations and to the Financial Services Authority/
Bank Indonesia and other parties;
vii. Directing, monitoring, and evaluating the implementation
of RJP, RBB, Company Work Plan and Budget (RKAP);
viii. Studying the development and utilization of information
technology.
(c) Dividing the duties among the member of the Board of
Commissioners according to the skill and experience of
members;
(d) Creating an annual work program and performance target of
the Board of Commissioners and review mechanism for the
performance of the Board of Commissioners.
(e) Creating the mechanism of providing information from the
Board of Commissioners to all stakeholders;
(f) Providing the accountability of the duties as the Board of
Commissioners to the GMS;
(g) Giving written opinions and suggestions to the GMS on the
Company's Long-Term Plan (RJP), the Bank’s Business Plan
(RBB), and Company’s Work Plan and Budget (RKAP)
proposed by the Board of Directors;
(h) Giving the opinion to the General Meeting of Shareholders on
the strategic issues or important matters, including the
opinions on the feasibility of the Bank's vision and mission;
(i) Examining and study the regular and annual reports prepared
by the Board of Directors, including the result of the
Company’s internal audit reports.
(j) Ensuring that the Board of Directors has followed up the audit
findings and audit recommendations from the Bank’s Internal
Audit Work Unit, external auditors, the results of the Financial
Services Authority and/or other authority's supervision result;
(k) Ensuring that the committees that have been established to
perform effectively;
(l) Reviewing of the structure of the organization;
9 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(m) Reviewing the Key Performance Index of the Board of
Directors;
(n) Reviewing the company's work culture;
(o) Recommending ISO implementation for the Compliance Work
Unit and Risk Management Division
B.1.2 Board of Directors
B.1.2.1 Number and Composition of the Board of Directors
Pursuant to the Decision of the Extraordinary General Meeting of
Shareholders of PT. Bank Pembangunan Daerah Jawa Barat dan
Banten, Tbk., as written in the Deed of Statement of the Resolution
of The Extraordinary General Meeting of Shareholders number 111
dated 29 May 2015, the structure of the Bank’s Board Board of
Directors is:
(a) President Director : Ahmad Irfan
(b) Director : Suartini
(c) Director : Fermiyanti
(d) Director : Agus Gunawan
(e) Director : Nia Kania
(f) Director : Benny Santoso
(g) Director : Agus Mulyana
B.1.2.2 Criteria of the Members of the Board of Directors
The criteria for members of the Board of Directors refer to the
Financial Services Authority Regulation number 33/POJK.04/2014
dated 08 December 2014 Concerning the Board of Directors and the
Board of Commissioners of Issuers or Public Companies. The Board
of Directors of the Bank has passed the fit and proper test which
means that they have met the prerequisites criteria. The Criteria for
the Members of the Board of Directors according to Financial
Services Authority regulations are:
(a) The Board of Directors are required to comply with the
prevailing rules and legislation and with applicable regulation
of Bank Indonesia/Financial Services Authority (OJK), passed
the fit and proper test according to the provisions of Bank
Indonesia/ Financial Services Authority (OJK) on Fit and
Proper Test, and residing in Indonesia;
(b) The Board of Directors to follow the provisions of the Law on
Limited Liability Company, the laws and regulations on the
Capital Market and laws and regulations relevant to the Bank's
business activities;
(c) The Board of Directors is an Indonesian citizen who:
i. Faithful to the God the Almighty;
ii. Having good character and moral;
10 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
iii. Faithful and loyal to the State and the Government of the
Republic of Indonesia;
iv. Not directly or indirectly involved in the act of treason
against the State of Republic of Indonesia;
v. Physically and mentally in good condition;
vi. Not involved in drugs or alcohol abuse;
vii. Maintain impartiality against all political parties;
viii. Has never been sentenced due to activities or actions
that may harm the state or the banking sector;
ix. No court decision currently in place that revokes his
voting rights;
x. Having the capability to perform legal acts;
xi. Has never been declared as bankrupt; or become the
member of the Board of Directors and/or member of the
Board of Commissioners who is declared to cause a
Bank’s bankruptcy;
xii. Has never been sentenced for committing the crime that
harms the State's finances within 5 (five) years prior to
the appointment;
xiii. Has passed the fit and proper test pursuant to the
applicable regulation;
xiv. The maximum age of candidates for the Board of
Directors on first appointment is 54 (fifty-four) years;
xv. Not formerly the member of the Board of Directors or
Executive Officer of the Company that has retired,
resigned, or terminated;
xvi. Particularly for the President Director’s position, it
requires commercial banking experience with minimum
experience in Directorship position at a Commercial
Bank with total assets of minimum equal to Company’s
asset value and having excellent track record;
xvii. Requirement to be the member of the Board of Directors
of a Bank for candidates coming from Corporate
background;
xviii. Requirement to posses commercial banking background
with the experience as an executive officer or one level
below the position of Board of Directors, for the
Director’s candidate coming from a Bank or non-Bank.
B.1.2.3 Duties and Responsibilities of the Board of Directors
Pursuant to the Decree of the Board of Directors number
519/SK/DIR-CS/2011 dated 20 September 2011 Concerning the Board
of Directors’ Work Guideline, the duties and responsibilities of the
Board of Directors are:
11 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(a) The Duties of the Board of Directors
i. The Board of Directors is fully responsible for the
execution of the Bank's management;
ii. The Board of Directors are required to manage the Bank
in accordance to its authorities and responsibilities, as
stated in the Articles of Association and prevailing laws
and legislations;
iii. The Board of Directors to manage its assets according to
the rules and legislations then in place;
iv. The Board of Directors are required to create and execute
the Annual Work Plan that should be delivered to the
Board of Commissioners at no later than 60 (sixty)
calendar days prior to the commencement of the
forthcoming financial year;
v. The previous year’s work plan to be used if the Board of
Directors do not provide such plan. The previous year
work plan provision also applies for Bank whose plan has
not been approved as specified in the Articles of
Association or laws and legislations;
vi. The Board of Directors are required to submit the Bank’s
annual report to the General Meeting of Shareholders
(GMS) for review. The result of audit by public
accountant to be delivered in writing to the Annual
General Meeting of Shareholders. The annual report
should include at least:
The balance of recent financial year in comparison
with the previous fiscal year, the relevant fiscal year’s
statements of income, the profit and loss statement of
the relevant year, cash flow statement, and the
statement of changes in stakeholder equity, and the
notes to the financial statements;
The report on the Bank’s activities;
The report on the implementation of corporate social
and environmental responsibility;
The details of all problems encountered in financial
year that affect the Bank's business activities;
The supervisory duties of the Board of Commissioners
in the previous fiscal year;
The names of the members of the Board of Directors
and the Board of Commissioners;
The wages and allowances for the members of the
Board of Directors and previous year’s salaries or
wages and allowance for the members of the Board of
Commissioners.
12 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
vii. The Board of Directors is required to implement the risk
management and GCG principals in the Banks business
activity at all levels or organization level. In order to
implement GCG, the Board of Directors at least establish
the following:
Working Units performing Internal Audits function in
order to assist the Board of Directors in supervising
the Bank's across the Bank’s organization. The
Internal Audit Work Unit must be independent from
the operational work unit;
The work unit performing the Risk Management
Function and Risk Management Committee to help
the Board of Directors in implementing the risk
management as required by Bank Indonesia
Regulations/Financial Services Authority Regulation;
The Work Unit performing the Compliance function
that will help the Board of Directors in complying
with the legal, laws, and legislation requirements as
well as with the operational requirements from the
Bank Indonesia/Central Bank Regulations and
Financial Service Authority regulations.
viii. It is compulsory that the Board of Directors to follow the
audit findings and audit recommendations from the
Bank’s Internal Audit Work Unit, external auditors, the
results of the Financial Services Authority and/or other
authority's supervision result;
ix. Performing the tasks specifically assigned by the Board of
Commissioners and/or the GMS;
x. The Board of Directors to organize the Annual General
Meeting of Shareholders (AGM) and Extraordinary
General Meeting of Shareholders (EGMS) prior to the
General Meeting of Shareholders;
xi. In RUPS, if all members of the Board of Commissioners
are not available or having conflict of interest, the RUPS
must be chaired by one of the Directors appointed by the
Board of Directors;
xii. The Board of Directors through the Human Resources
staff to inform the employees on the Bank’s strategic
policy in relation to personnel matters, salary, benefits,
facility, employee recruitment system, including the
bank ‘s plan to improve the efficiency through employee
reduction or the Bank’s other personnel related aspects.
13 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
xiii. The Board of Directors is prohibited from
deciding/taking strategic decisions within three months
prior to the termination of the Board of Directors service.
xiv. The Board of Directors is required to provide the Board
of Commissioners with accurate, relevant, and timely
data and information;
xv. The Board of Directors to provide answer and
explanation asked by the Board of Commissioners;
xvi. The Board of Directors to ensure a smooth
communication between the Bank and its stakeholders
by empowering the corporate secretary;
xvii. The Board of Directors must keep and maintain list of
shareholders and special lists in good condition;
xviii. The Board of Directors need to follow the Bank's ethical
standards and ethical standards found in the Board of
Directors Work Guideline.
(b) The Board of Directors responsibilities
i. Responsible for the financial statements;
ii. The Board of Directors is collectively responsible for the
Bank’s strategic duties. All members of the Board of
Directors is responsible to implement the operational
activities of the strategic decisions and other decisions
according to its task and authorities;
iii. The Board of Directors is required to report the execution
of its duties to the General Meeting of Shareholders;
iv. The Board of Directors must be able to ensure continuous
compliance of the Bank’s Corporate Social Responsibility
(CSR) by making available of transparent plan and focus
of execution.
v. The Board of Directors’ decision are in compliance of the
Company’s guideline and code of conduct that binds all
members of the Board of Directors;
vi. The Board of Directors is responsible to implement the
code of conduct and code of business conduct within the
company premise.
B.2 Instrument and the Performance of Committees
The establishment of Audit Committee, Risk Monitoring Committee, Remuneration
and Nomination Committee, Integrated Good Governance Committee as well as
Business and Credit Monitoring Committee by the Board of Commissioners to
support the effectiveness of duties and responsibilities of the Board of
Commissioners.
14 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.2.1 Audit Committee
The Audit Committee is the Board of Commissioners’ instrument
responsible to supervise the effectiveness of internal control system,
internal audit, financial reporting process that will enable the management
of the Bank according to the principles of transparency, accountability,
responsibility, independence and fairness.
The Audit Committee was established based on the Financial Services
Authority Regulation number 55/POJK.04/2015 dated 23 December 2015
Concerning the Establishment and Implementation Guidelines for the Audit
Committee. Additionally, the following provisions also served as the
guidelines for the Audit Committee:
(1) Financial Authority Regulation number 55/POJK.03/2016 dated 07
December 2016 concerning The Implementation of Good Governance
for Commercial Bank;
(2) Decision of the State Minister of State Owned Enterprises number
KEP-117/M-PBUMN/2002 dated 1 August 2002 Concerning the
Implementation of Good Corporate Governance Practice within the
State Owned Enterprises.
(3) The Decision of the Chairman of Bapepam number Kep-41/PM/2003
dated 22 December 2003 Concerning the Establishment and
Implementation Guidelines for the Audit Committee;
(4) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 07/SK/DK/2015 dated 22
April 2015 concerning Allocation of Tasks and the Implementation of
the Board of Commissioners’ and Committee’s Activity Schedule.
(5) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 04/SK/DK/2016 dated 30
March 2016 concerning Allocation of Tasks and the Implementation of
the Board of Commissioners’ and Committee’s Activity Schedule.
Below is the information on the membership, structure, and skills of the
Audit Committee of 2016:
No Name Remarks Title Expertise
1 Suwarta* Independent
Commissioners
Chairman Accounting and
Legal
2 Klemi Subiyantoro** Independent
Commissioner,
Acting President
Commissioner
Member Accounting and
Legal
3 Muhadi Commissioner Member Technical
4 Rudhyanto
Mooduto***
Commissioner Member Accounting and
International
Business
15 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Management
5 Erie Febrian**** Independent
Party
Member Economy
6 Mokhamad
Anwar*****
Independent
Party
Member Economy and
Financial
Management
7 Memed Sueb****** Independent
Party
Member Accounting and
Legal
8 Ramson
Sinaga*******
Independent
Party
Member Accounting and
Legal
*Appointed as the committee Chairman on 30 March 2016
**Assumed the Head of Committee position until 30 March 2016 and became the
members of the committee afterwards
***Became the member of the committee until 30 March 2016
****Appointed as the committee member on 19 September 2016
*****Appointed as the committee member on 19 September 2016
******Resigned as the member of the committee on 30 June 2016
*******Honorably discharged as the member of the committee on 14 October 2016
B.2.1.1 Independence of the Audit Committee Members
The Audit Committee Independence are stipulated in the following
Audit Committee Code of Conduct:
(a) The members of the Audit Committee are not affiliated with
the Bank, the Board of Commissioners, the Board of Directors
or the General Meeting of Shareholders (GMS);
(b) Committee have no direct or indirect business relationship
with the Bank's business activities;
(c) Committee are not authorized or responsible to plan, lead, or
control the Bank’s activities within the last 6 (six) months prior
to the stipulation, except the individuals with authority and
responsibility to perform the supervisory role;
(d) Committee are not the Board of Commissioners or the
majority shareholders or the primary partners of the Bank;
(e) The Independent Party who is the member of the Audit
Committee is the Bank’s external party that has no financial
relationship. Management, shares ownership and/or family
relations with the Board of Commissioners, Board of Directors
and/or Controlling Shareholder, or any relationship with the
Bank that may affect its ability to act independently.
B.2.1.2 The Roles and Responsibilities of the Audit Committee
The duties of the Audit Committee are to support the Board of
Commissioners according to the following its responsibilities:
(a) Supervising the Financial Report Process
16 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
The audit committee is responsibility to supervise the issuance
of Bank’s Financial Statement. In this regard, the Audit
Committee:
i. Monitor the financial reporting process to ensure that the
accounting standard and policy are met.
ii. Evaluate the financial information to be issued by the
Bank, i.e. financial statements, projections, and other
financial information.
iii. Review the financial statements’ compliance with the
prevailing accounting standards and its consistency with
the other information available to the members of the
Audit Committee on a monthly, quarterly and annual
basis.
iv. Monitor the rating determination of valuation method of
assets and liabilities, commitment and contingency and
the reserves that meeds to be established.
v. Monitor the entries in the financial statements that
contain complex and unusual transactions.
vi. Evaluate the adequacy of transactions disclosure with
relevant parties.
vii. Evaluate and provide recommendations to the Board of
Commissioners regarding the suggestions given by the
external auditors, the Board of Directors and internal
auditors for the changes in the scope of the audit and in
the accounting principles and standards.
viii. The Audit Committee will communicate with the External
Auditor, the Board of Directors, and the Internal Auditor
upon discovery of different interpretations and
inconsistencies.
(b) Selection and Appointment of Public Accounting Firm (PAF)
and the Supervision of the Work
The Audit Committee provides the Board of Commissioners
with the recommendation on the appointment of PAF that will
perform the external annual audit will do the following:
i. Select and recommend the appointment of PAF
The Audit Committee selects and recommends PAF
candidates that will audit the Bank's annual financial
report for the Board of Commissioners.
The PAF selection and appointment process is
available in the appendix of the Audit Committee
Work Guideline - Independent Auditor's Appointment
Process, according to the applicable regulations.
The Audit Committee may recommend the Board of
Commissioners to terminate the relationship with the
17 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
external auditor if there is a strong indication that the
auditor's independence may be impaired or the
auditor failed to perform the audit according to the
Standards of Professional Public Accountant.
ii. Evaluate the External Auditor’s work
Evaluate the audit plan and the adequacy of the audit
program as well as monitor the external auditor work
and follow up the audit results evaluate the adequacy
of internal controls including the adequacy of the
financial reporting process.
Involved in and/or receive the reports on audit
findings made by the external auditor with
management and issuing a written report of any
difference of opinion between the auditor and
management that requires the Board of
Commissioners’ attention.
To perform the above duties, the Audit Committee at
least to monitor and evaluate:
- The compliance of PAF’s Audit according to
applicable standards;
- The compliance of financial statements according
to applicable accounting standards;
- The Board of Directors’ follow up actions based on
the external auditor’s findings as the
recommendation for the Board of Commissioners.
Giving the inputs to the External Auditor to identify
high risk areas.
Consulting with the External Auditor without the
presence of management regarding the internal
control to identify the possible weaknesses, and the
issuance and the accuracy of the Bank's financial
statements.
On general audit, ensure the external auditor to
communicate the following;
- The auditor’s level of responsibility on the internal
control in the presentation of financial statements;
- Significant accounting policy revision;
- Significant design and application weaknesses of
internal controls;
- Recording and reporting methods, and the impact
of significant extraordinary transactions on the
financial statements;
- The existence or indications of fraud and the
irregularities in violation of prevailing rules and
18 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
regulations performed by the management or
employees causing the material misrepresentation
of the financial statements;
- Significant audit correction;
- The procedures performed by the auditors on the
annual reports containing audited financial
statements;
- Disagreements with management on the
application of accounting standards, audit scope,
disclosures in financial statements and words used
by auditors in their audit reports;
- Any difference of opinions between the
management and the external auditors to consult
with the other external auditors;
- Any obstacles during the performance of the audit.
Perform a joint review with the Board of
Commissioners, the Board of Directors, and external
auditors on:
- The Bank’s annual financial statements along with
its notes prior to publication;
- External auditors report on the Bank's annual
financial statements including the external
auditor’s opinions and suggestions;
- Follow up of External Auditor’s crucial findings and
recommendations to be monitored by the Board of
Directors and management;
- Reviewing the representation letter signed by the
Board of Directors, and ensuring easy access to
obtain the letter and other specific matters
discovered in the assignment;
- Evaluate the external auditor’s opinion on the
quality and accuracy of the applied Financial
Accounting Standards for the banks.
The Audit Committee evaluates the external auditor’s
qualifications, performance, and independence of the
PAF audit partner and the appointed auditor perform
the financial audit, receives input from the
management and the Internal Audit Division of the
work of the external auditor;
Discussion with the Board of Commissioners and the
Board of Directors and external auditor to understand
the considerations of the accounting standards used
and its applications;
19 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Ensure sufficient disclosure against the accounting
standards.
(c) Evaluation of Non-Audit Services
In order to keep the external auditor independence, the Audit
Committee is required to provide initial approval (pre-
approval) to the non-audit services assigned to an external
auditor performing the audit service. The non-audit services
that may impair the independence are:
i. Bookkeeping services or other services related to the
accounting records or the Bank’s financial report;
ii. Design and implementation services of financial
information systems;
iii. Assessment service or service to provide opinions of
reasonableness;
iv. Actuarial service;
v. Outsourcing of internal audit service;
vi. Management or human resources management service;
vii. Intermediary service;
viii. Non-audit legal and expertise services;
ix. Taxation advisory service;
x. Other services according to the prevailing rules and
regulations and Central Bank/Bank Indonesia regulations
The procedure to be followed by the Bank’s management in
order to obtain pre-approval are:
i. The Board of Directors to submit a detailed description to
the to the Board of Commissioners regarding the type of
services and work to be assigned to the PAF;
ii. The Audit Committee to evaluate and analyze the non-
audit services to be assigned to the PAF to avoid things
that may undermine the independence or cause a conflict
of interest;
iii. The Audit Committee may only approve the provision of
non-audit services if no indication that may undermine
the independence or cause conflict of interest in the in the
evaluation results.
Pre-approval of non-audit services may not be required if the
value of all non-audit services is not more than 5% of the total
audit cost spent by the Bank to PAF in the fiscal year which
non-audit services are rendered.
(d) Internal Control Monitoring
The Audit Committee and the Internal Audit Work Unit
supervise the Bank’s operation according to its functional
responsibility to comply with the Central Bank/Bank
20 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Indonesia/Financial Services Authority regulations, and
prevailing legislations. The monitoring at minimum to include:
i. Regular internal audit reports from the Internal Audit
Division to the Audit Committee as the form of feedback
and input that can be used to identify the possibility of
weak internal controls;
ii. Feedback and input to improve internal controls
effectiveness containing suggestions to improve the
performance of the Internal Audit Division are provided
by the Audit Committee to the management of the Bank
via the Board of Commissioners;
iii. Review and give feedback to the Board of Commissioners
on the Annual Internal Audit Work Plan, including the
scope of the Audit, and to ensure that the Annual Internal
Audit Work Plan already covers all the operational risks of
the Bank;
iv. Evaluation on an annual basis by the Audit Committee on
the Annual Audit Work Program created by the Internal
Audit Division and recommend the result to the Board of
Commissioners;
v. Review and inform the Board of Commissioners on the
difficulties and constraints faced by the internal audits in
performing their duties, including the to the scope of the
audit work and/or issues to access required information;
vi. The Audit Committee in coordination with the Internal
Audit Division to:
Conduct regular meetings to discuss findings and/or
other issues regarding the indications of weaknesses
or loopholes in the internal control weaknesses, as
well as inappropriate application of accounting
standards as well as monitoring of the follow-up with
the Bank's management regarding the findings;
Discuss the response from the Bank's management for
significant findings in the operation of the Bank and
the recommendations provided by the Internal Audit
Division for such findings;
Annually monitor the ethical code of the profession,
evaluate the activities, organizational structure and
qualifications of internal audit members;
Extend the evaluation in order to assess the nature,
scope, magnitude and impact of significant internal
control weaknesses and how it affects the financial
statements.
21 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
vii. Assess the effectiveness and independence of the Internal
Audit Division and evaluate the regular activities,
placement of internal auditors and the Internal Audit
Division’s organizational structure.
viii. Recommend the Board of Commissioners on:
Any significant changes to the scope of the audit work
against the original plan, including human resources
and internal audit budget;
Updates on the Audit Committee Work Guideline;
Compliance against the Audit Committee Work
Guideline.
ix. At the request of the Board of Commissioners, the Audit
Committee may recommend the appointment and
dismissal of the Chief of the Internal Audit Division.
(e) Supervision on the Compliance to the Rules and Legislation
Based on its functions, the Audit Committee and the
Compliance Work Unit are required to monitor the
operational compliance of the bank with applicable Laws and
Regulations, the Financial Services Authority
Regulation/Central Bank or Bank Indonesia Regulation,
including:
i. Evaluation of findings, reporting or inspection results
performed by the Financial Services Authority/Central
Bank or Bank Indonesia, external auditors, Compliance
Work Unit, Internal Audit Work Unit, Risk Management
Work Unit/Risk Management Committee.
ii. The report to the Board of Commissioners by the Audit
Committee if there is a strong indication of the
occurrence of violation to the prevailing laws and
regulations, Central Bank or Bank Indonesia/Financial
Services Authority regulations, and to propose an
investigation.
(f) Risk and Risk Management Implementation Report
The Audit Committee and the Risk Monitoring Committee
according to its functions, to individually monitor the Bank’s
operation and mitigate the risks, at a minimum to include:
i. Evaluation of the risk identified and implementation of
the risk management performed by the management;
ii. Assessment of risk management process and financial
control of the Bank including the identification and
evaluation of all risks and its control to minimize the
occurrence of the risks;
iii. Monitoring and evaluation of the adequacy of duties
performed by External Auditor and Internal Audit
22 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Division to ensure that all the major risks have been
covered in the audit planning.
iv. Assurance that the Bank's management has performed all
recommended actions regarding the risk and control
provided by the external auditors, Internal Audit Division,
Risk Management Work Unit and Risk Monitoring
Committee.
(g) Third Party Complaint Review
The Audit Committee to receive not only information on the
execution of its regular performance, but also third-party
complaints related to the accounting, internal controls, and
fraud that may disrupt the the Bank’s operations.
i. The requirements to follow up the complaints:
Complaint to be submitted in writing;
Clear reasoning of the issues being complained.
ii. Complaint Review
The Audit Committee may request the Internal Audit
Division to follow up the complaints.
iii. Review Result
If the complaints are proven to be accurate based on the
review:
The Audit Committee to forward the result of the
review to the Board of Commissioners.
The Audit Committee to monitor the follow-up of the
review, if the Board of Commissioners request to do
so.
(h) Special Tasks Implementation
Special task refers to any tasks performed on irregular, case to
case basis, as instructed by the Board of Commissioners, and
assigns the Audit Committee.
i. The Board of Commissioners assigns special task, if;
there is an indication of non-compliance with the
prevailing laws and regulations. For that reasons the
Audit Committee by the approval of the Board of
Commissioners to extend the evaluation and conduct
Investigation Audit to measure the impact and
magnitude of the losses due to the violation. The
Audit Committee may request the assistance of the
Internal Audit Division or the external auditor to
perform the investigation audit.
there is a report/complaint from the third party that
indicates the non-compliance
ii. For special task, the Audit Committee has the authority
to:
23 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Evaluate all records including the minutes of the
meetings of the Board of the Board of Commissioners,
documentations and other required information.
Inquire the Board of Directors and its staff and report
the result of th inquiry in the Summary of Q&A signed
by both parties.
If necessary, the audit investigation may be performed
in cooperation with the Internal Audit Division or the
External Auditor.
(i) Independently assess the Audit Committee Implementation
through a self-assessment
The self-assessment to be carried out according to the
provisions of Bank Indonesia on the effectiveness of its
performance in accordance with the Audit Committee Work
Guideline and Board of Commissioners evaluation on Audit
Committee performance.
Additionally, the Audit Committee is also responsible to:
(a) Ensure that the Bank's financial statements are
understandable, transparent, and reliable;
(b) Assess the implementation of the activities and audit results
performed by the Internal Audit Division and external auditors
to avoid non-standard implementation and reporting;
(c) Evaluate the Bank’s policies on the legal compliance with
prevailing laws and regulations, ethics, conflict of interest and
investigate the possibility of omissions and fraud, and through
Board of Commissioners to provide improvements
recommendation on the Bank's internal control system and its
executions;
(d) Evaluate the Internal Audit Division Work Plan, significant
report and findings;
(e) Communicate with the Board of Directors and relevant work
units on the new status, progress and development of
operational issues and findings encountered by the Internal
Audit Division;
(f) Ensure that the Internal Audit Division have direct access to
the Audit Committee and encourage communication outside
the scheduled committee meetings;
(g) Provide direct access of communication with the External
Auditor/Bank’s Oversight to discuss the audit plan, findings
and reports.
24 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.2.1.3 Meetings and Attendance of the Audit Committee
In 2016, the Audit Committee held 14 (ten) meetings. Below is the
information on meetings conducted by the Audit Committee in
2016:
NameTotal
Meetings
Total
AttendancePercentage
Suwarta 14 13 93%
Klemi Subiyantoro 14 6 43%
Muhadi* 10 10 100%
Rudhyanto Mooduto** 4 4 100%
Erie Febrian*** 7 5 71%
Mokhamad Anwar**** 4 4 100%
Memed Sueb***** 8 5 63%
Ramson Sinaga****** 10 8 80%
*Appointed as the committee Chairman on 30 March 2016
**Became the member of the committee until 30 March 2016
***Appointed as the committee member on 19 September 2016
****Appointed as the committee member on 19 September 2016
*****Resigned as the member of the committee on 30 June 2016
******Honorably discharged as the member of the committee on 14
October 2016
B.2.1.4 The Implementation of the Task of the Audit Committee
The audit committee has performed both regular and non-regular
duties. It includes the monitoring and evaluation of audit plan and
execution and follow-up of audit results to assess the adequacy of
internal controls and financial reporting, with the following details:
(a) In 2016 the Audit Committee held internal meetings and
meetings with the Internal Audit Division and the Compliance
to discuss the implementation of work program, the result of
general and special audits findings by the Internal Audit
Division, the follow up by the Board of Directors on the PAF
and Financial Services findings, appointment of public
accountant company and review of published quarterly
financial report.
(b) Review and monitoring
i. The Audit Committee reviews and monitors the
performance of the Internal Audit Division's duties. Based
on the results of the evaluation, a conclusion can be
drawn that the Internal Audit Division has performed the
audit according to the provided work program risk-based
audit planning, audit implementation and reporting are
consistent with the Bank’s Internal Audit Implementation
Standard (SPFAIB).
25 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
ii. The Audit Committee reviews and provides feedback to
improve the draft of quarterly publication reports and
actively in discussions with the PAF on the audit result
performed by PAF.
iii. The Audit Committee reviews and involves in the PAF
selection team consisting of the Audit Committee and the
management, to audit the Financial Statements of 2016.
The committee also reviews the PAF’s audit for the
Pension Fund Investment Portfolio and PAF’s audit for
CSR Funds. The committee also provide the
recommendations to the Board of Commissioners
regarding the result of the PAF appointment.
iv. The Audit Committee evaluates the effectiveness of the
external audit, including independence and objectivity
review of the external auditor and adequacy of the
performed audit to ensure that consideration of all crucial
risks have been considered, as well as the conformity of
the audit by public accounting firm against prevailing
standard. Based on the monitoring and evaluation by the
Audit Committee, PAF have performed the audit
according to the Auditing Standards of Indonesian
Institute of Certified Public Accountants. During the
process, the Audit Committee through its members also
attended the exit meeting of 2015 financial statements
audit the by the public accounting company.
v. Monitor the follow-up
Monitoring the follow up of Internal Audit Results
The Audit Committee monitors the follow up of audit
findings performed by the Internal Audit Division in
meetings to discuss the findings and follow-up of the
Internal Audit Division audit results inside or outside
the regular meetings.
Monitoring the Follow Up of External Audit Results
The Audit Committee monitor the fulfillment of the
commitment made to the result of Financial Service
Authority audit through meetings with the
Compliance Division. This is consistent with Central
Bank/Bank Indonesia regulation number 13/2/PBI/2011
concerning the The Implementation of Bank’s
Compliance Function as contained in Chapter II on
Bank’s Compliance Function where Compliance
Division is in charge to monitor the fulfillment of such
commitment.
26 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
The Audit Committee also provide recommendation
to the Board of Commissioners to remind the
Management to fulfill its commitment given to the
Financial Services Authority.
B.2.2 Risk Monitoring Committee
Consistent with the Financial Services Authority Regulation number
55/POJK.03/2016 Concerning the Implementation of Good Governance for
Commercial Bank, the Risk Monitoring Committee is the Commissioner's
organ to monitor the risk and to assess the risk tolerance that the Bank may
take, to evaluate the improvements made to policies, procedures and
practice of the Bank’s risk management, in order to ensure good risk
management particularly on credit risk management, market risk, liquidity
risk, operational risk and other risks.
The Bank’s Risk Monitoring Committee for 2016 was established under:
a. Financial Authority Regulation number 18/POJK.03/2016 Concerning
The Implementation of Good Governance for Commercial Bank
b. Circular Letter of Bank Indonesia number 15/15/DPNP dated 29 April
2013 concerning The Implementation of Good Corporate Governance for
Commercial Bank;
c. The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 07/SK/DK/2015 dated 22
April 2015 concerning Allocation of Tasks and the Implementation of the
Board of Commissioners’ and Committee’s Activity Schedule.
d. The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 04/SK/DK/2016 dated 30
March 2016 concerning the Working Guideline and Regulations of the of
Integrated Good Governance Committees.
e. The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 02/SK/DK/2015 dated 26
January 2015 concerning the Guideline and Code of Conduct of the Risk
Monitoring Committee.
Below is the information on the membership, structure, and skills of the
Bank’s Risk Monitoring Committee of 2016.
No Name Remarks Title Expertise
1 Rudhyanto Mooduto Independent
Commissioners
Chairman Accounting and
International
Business
Management
2 Muhadi Commissioner Member Technical
3 Yayat Sutaryat Independent
Commissioners
Member Legal
27 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
4 Suwarta Independent
Commissioners
Member Accounting and
Legal
5 Tettet Fitrijanti Independent
Party
Member Accounting
6 Nury Effendi Independent
Party
Member Economy
B.2.2.1 Independence of Risk Monitoring Committee Members
To maintain its independence, the members of the Risk Monitoring
Committee coming from independent parties are prohibited from:
(a) Receiving any compensations from the Bank, its subsidiaries or
affiliates except the wages, salaries and other facilities provided
to perform their tasks as the members of the Risk Monitoring
Committee;
(b) Having family or business relations with the Board of the
Directors or the Board of Commissioners;
(c) Assuming other position with the Bank and other affiliated
companies;
(d) Having the duties, responsibilities and authorities that may
create a conflict of interest;
B.2.2.2 The Roles and Responsibilities of the Risk Monitoring
Committee
The Roles and Responsibilities of the Risk Monitoring Committee
includes:
(a) Evaluation of consistency between the risk management policy
and its implementation:
i. Regular evaluation and analysis of consistency between
the risk management policy with the regulations, and
adequacy of the risk management policy.
ii. Provides opinion in the form of suggestion or
recommendation to the Board of Commissioners to
improve the required risk management
(b) Monitoring and evaluation of the implementation of the Risk
Management Committee and Risk Management Work Unit:
(c) Review and analyze quarterly risk profile of the Bank and other
reports, or other relevant result of relevant and give opinions
in the form or suggestion and/or recommendation for
necessary improvement and perfection of risk management;
(d) Evaluation and analysis of the Bank’s health level for the risk
profile part and GCG.
(e) Monitoring the adequacy of the process of identification,
measurement, monitory, controlling and risk management
information system;
28 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(f) Formulate and implement the Risk Monitoring Committee
annual work plan and the Bank’s prevailing conditions.
B.2.2.3 Meeting and Attendance of the Risk Monitoring Committee
In 2016, the Risk Monitoring Committee held 13 (thirteen)
meetings. Below is the information on meetings conducted by the
Remuneration and Nomination Committee in 2016:
NameTotal
Meetings
Total
AttendancePercentage
Rudhyanto Mooduto 13 13 100%
Muhadi 13 12 92.31%
Yayat Sutaryat 13 9 69.23%
Suwarta* 9 5 55.55%
Tettet Fitrijanti 13 13 100%
Nurry Efendi 13 6 46.15%
*Appointed as the committee member on 30 March 2016
B.2.2.4 Implementation of Risk Monitoring Committee Duties
According to Risk Monitoring Committee work plan, the following
work plan has been executed in 2016.
(a) Evaluation of adequacy of risk management implementation
by reviewing the adequacy of guideline, risk management
facilities, and risk level variable parameter;
(b) Evaluation of risk level based on the Self-Assessment Risk
Profile Report and provide recommendation based on the
result of the evaluation to the Board of Commissioners;
(c) Monitoring of Self-Assessment Bank’s Health Level;
(d) Review of Liquidity & Credit Stress Test
(e) Review of Root Cause Credit Risk (RCCR) Analysis Report;
(f) Review of the Market Risk Measurement & Liquidity
Guideline;
(g) Discussion of credit risk management for UMKM (Micro
Credit);
(h) Discussion of the bank’s subsidiary performance (bank bjb
Syariah) and recommendation to the Board of Commissioners
through Integrated Good Governance Committee;
(i) Specific discussion on the legal risk and reputation risk;
(j) Creation of quarterly home mortgage (KPR) report and work
plan;
(k) Capacity improvement of the Head and Members of KPR
through workshop, seminar, and benchmarking;
(l) Execution of other tasks assigned by the Board of
Commissioners based on the provision of prevailing rules and
legislations;
29 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.2.3 Nomination and Remuneration Committee
Nomination and Remuneration Committee is one of the organs of the Board
of Commissioners that help the Board to perform its functions and tasks in
the fields related with the nomination and remuneration of the members of
The Board of Directors and the Board of Commissioners. The Central
Bank/Bank Indonesia/Financial Service Authority Regulation requires the
public company to establish Nomination and Remuneration Committee as
one form of GCG implementation. The management of the Bank, therefore,
to be performed by founding the principles of transparency, accountability,
responsibility, Independency, and reasonableness.
The Nomination and Remuneration Committee was established pursuant
to:
(1) Financial Services Authority Regulation number 34/POJK.04/2014
dated 08 December 2014 concerning the Nomination and
Remuneration of Issuer or Public Company;
(2) Financial Services Authority Regulation number 55/POJK.03/2016 dated
07 December 2016 concerning The Implementation of Good
Governance for Commercial Bank.
(3) Circular Letter of Bank Indonesia number 9/12/DPNP dated 30 May
2007 concerning The Implementation of Good Corporate Governance
for Commercial Bank.
(4) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 07/SK/DK/2015 dated 22
April 2015 concerning Allocation of Tasks and the Implementation of
the Board of Commissioners’ and Committee’s Activity Schedule.
(5) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. Number 04/SK/DK/2016 dated 30
March 2016 concerning Allocation of Tasks and the Implementation of
the Board of Commissioners’ and Committee’s Activity Schedule.
(6) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 09/SK/DK/2016 dated 14
December 2016 concerning the Working Guideline and Regulations of
the of Integrated Good Governance Committee.
Below is the information on the membership, structure, and skills of the
Bank’s Nomination and Remuneration Committee of 2016.
No Name Remarks Title Expertise
1 Klemi Subiyantoro Independent
Commissioner,
Acting President
Commissioner
Chairman Accounting and
Legal
2 Muhadi Commissioner Member Technical
3 Yayat Sutaryat Independent
Commissioners
Member Legal
30 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
4 Dadan Yonanda Ex. Officio of the
Human Resources
Division Head
Member Legal and Human
Resources
5 Ernie Tisnawati Sule Independent
Party
Member Human Resources
Management
B.2.3.1 Nomination and Remuneration Committee Independence
All members of the Nomination and Remuneration Committee
have no financial relationship. management, shares ownership
and/or family relations with the Board of Commissioners, Board of
Directors and/or Controlling Shareholder, or any relationship with
the Bank that may affect its ability to act independently.
B.2.3.2 The Roles and Responsibilities of the Nomination and
Remuneration Committee
The Nomination and Remuneration Committee has the roles and
responsibility to formulate and implement the annual work plan of
the Nomination and Remuneration Committee according to the
direction of the Board of Commissioners and the Bank’s prevailing
regulations.
(a) Nomination Related Duties
i. Recommendation on the composition of the member of
the Board of Directors and/or the member of the Board of
Commissioners position;
ii. Formulation and recommendation of the system and
procedure of appointment and/or replacement of the
member of the Board of Directors and/or the member of
the Board of Commissioners to be submitted to the GMS;
iii. The system and procedure of appointment and/or
replacement of the member of the Board of Directors
and/or the member of the Board of Commissioners is
stipulated in the Nomination Guideline;
iv. Recommendation of the name of the candidates for the
Board of Commissioners and the Board of Directors to the
Board of Commissioners to be submitted to the GMS
through Fit and Proper Test from the Financial Services
Authority;
v. Recommendation on the independent party to be the
members of the committees under the Board of
Commissioners to the Board of Commissioners;
vi. Formulation of performance evaluation criteria for the
member of the Board of Directors and/or the member of
the Board of Commissioners position;
31 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
vii. Assistance to the Board of Commissioners in the
performance evaluation of the member of the Board of
Directors and/or the Board of Commissioners;
viii. Recommendation on the skill development program for
the member of the Board of Directors and/or the member
of the Board of Commissioners.
(b) Remuneration Related Duties
i. Evaluation of the prevailing remuneration policy in the
Bank, including the structure and amount of the
remuneration;
ii. Understanding the prevailing provisions and rules and
legislations on the remuneration and stipulation of
facilities and other benefits;
iii. Recommendation to the Board of Commissioners on the
following:
Remuneration policy in the form of salary, facility, and
other benefits for the member of the Board of
Directors and/or the member of the Board of
Commissioners to be submitted to the GMS;
Overall remuneration policies for the executive
officers and employees to be submitted to the Board of
Directors through the Board of Commissioners;
iv. Recommendation is submitted in view of:
The financial performance and fulfillment of reserves
as set up in the prevailing rules and legislations;
Individual work performance/merit;
Reasonableness with the peer group;
Consideration of target and long term strategy of the
Bank;
The duties, responsibilities and authority of the Board
of the Directors and/or the member of the Board of
Commissioners to be connected with the achievement
of the objective and performance of the Bank;
Performance target or individual performance of each
member of the Board of Directors and/or the member
of the Board of Commissioners;
The balance of fixed benefits and variable benefits;
v. Assistance to the Board of Commissioners to evaluate the
performance against the remuneration received by the
member of the Board of Directors and/or the Board of
Commissioners ;
32 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
vi. Recommendation to the Board of Commissioners on the
overall remuneration policy of the employees of the Bank
to be submitted to the Board of the Directors.
B.2.3.3 Meetings and Attendance of the Nomination and
Remuneration Committee
The Nomination and Remuneration Committee held 11 (ten)
meetings in 2016. Below is the information on meetings conducted
by the Remuneration and Nomination Committee:
NameTotal
Meetings
Total
AttendancePercentage
Klemi Subiyantoro 11 7 63.64%
Muhadi 11 10 90.91%
Yayat Sutaryat 11 11 100%
Dadan Yonanda 11 11 100%
Ernie Tisnawati Sule* 7 3 42.86%
*Appointed as the committee member on 30 March 2016
B.2.2.5 Implementation of the Task of the Remuneration and
Nomination Committee
Throughout the meetings in 2016, the Nomination and
Remuneration Committee have discussed the following matters:
(a) Remuneration-related policy
i. Evaluation of remuneration policy:
Documentation of prevailing provisions and rules and
legislations on the remuneration and stipulation of
facilities and other benefits.
Monitoring of the remuneration system currently used
in the market, State-Owned Enterprise/Regional
Government Owned Enterprise Bank, Private National
or Foreign Bank.
ii. Discussion on the remuneration policy currently used
with the following details:
Remuneration of the management discussing the the
remuneration policy of the Bank’s management currently
used in the Bank and recommendation to the Board of
Commissioners.
Remuneration of the Employees discussing the
remuneration policy evaluation for the executive officers
and overall employee of the Bank.
(b) Nomination-related policy:
i. Discussion on the guideline/system and procedure of
nomination and or replacement of the Management;
33 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
ii. Discussion on the selection and recommendation of the
candidates of the member of the Management;
iii. Discussion on the committee member’s recommendation
from the independent party;
Discussion on the committee member’s
recommendation from the independent party.
Discussion on the nomination of committee member.
(c) Guidelines and Code of Conduct Related Work and Report
i. Working guideline.
ii. Work Program,
iii. Activity report.
(d) Other activities under the scope of Remuneration &
Nomination Committee.
B.2.4 Integrated Good Governance Committee
Financial Services Authority number 18/POJK.03/2014 concerning the
Application of Governance for Financial Conglomeration is stipulated to
guide the execution of integrated good governance for the Financial Services
Institutions with ownership and/or controlling relationship. Therefore,
every Financial Services Institution in a financial conglomeration is required
to put integrated good governance in place. To do this, the Bank has
established an Integrated Good Governance Committee as part of the
supervision to provide recommendation or advice for the execution of the
policy.
The Integrated Good Governance Committee was established pursuant to:
(1) Financial Authority Regulation number 55/POJK.03/2016 dated 07
December 2016 concerning The Implementation of Good Governance
for General Bank;
(2) Circular Letter of Bank Indonesia number 15/15/DPNP dated 29 April
2013 concerning The Implementation of Good Corporate Governance
for Commercial Bank;
(3) Financial Service Authority Regulation number 17/POJK.03/2014 dated
18 November 2014 concerning the Implementation of Risk Management
for Financial Conglomeration;
(4) Circular Letter of Financial Service Authority number 14/SEOJK.03/2015
dated 25 May 2015 concerning The Implementation of Risk
Management for Financial Conglomeration;
(5) Circular Letter of Financial Authority Regulation number
15/SEOJK.03/2015 dated 25 May 2016 concerning The Implementation
of Good Governance for Financial Conglomeration;
(6) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 07/SK/DK/2015 dated 22
34 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
April 2015 concerning Allocation of Tasks and the Implementation of
the Board of Commissioners’ and Committee’s Activity Schedule.
(7) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. Number 04/SK/DK/2016 dated 30
March 2016 concerning Allocation of Tasks and the Implementation of
the Board of Commissioners’ and Committee’s Activity Schedule.
(8) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 05/SK/DK/2016 dated 31
March 2016 concerning the Guidelines and Code of Conduct of the of
Integrated Good Governance Committees.
Below is the information on the membership, structure, and skills of the
Bank’s Integrated Good Governance Committee of 2016.
No Name Remarks Title Expertise
1 Yayat Sutaryat Independent
Commissioners
Chairman Legal
2 Klemi Subiyantoro Independent
Commissioner,
Acting President
Commissioner
Member Accounting and
Legal
3 Rudhyanto Mooduto Independent
Commissioners
Member Accounting and
International
Business
Management
4 Suwarta Independent
Commissioners
Member Accounting and
Legal
5 Aldrin Herwany Independent
Party
Member Economy
B.2.4.1 The Independence of the Integrated Good Governance
Committee
All members of the Integrated Good Governance Committee have
no financial relationship. Management, shares ownership and/or
family relations with the Board of Commissioners, Board of
Directors and/or Controlling Shareholder, or any relationship with
the Bank that may affect its ability to act independently.
B.2.4.2 The Roles and Responsibilities of of the Integrated Good
Governance Committee
The Integrated Good Governance Committee has the roles and
responsibility to formulate and implement the annual work plan
according to the direction of the Board of Commissioners and the
Bank’s prevailing regulations. The roles and responsibilities of the
Integrated Good Governance Committee are:
35 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(a) Supervise the implementation of good governance in
individual Financial Service Institutions to meet the Integrated
Good Governance Policy;
(b) Provide the recommendations to the Principal Entity’s Board
of Commissioners regarding the implementation of the roles
and responsibilities of the Principal Entity’ Board of Directors
in the implementation of Integrated Good Governance Policy
and the follow up of the internal and external audit results;
(c) Evaluate the stipulated Integrated Good Governance Policy;
(d) Evaluate and analyze the report of integrated good governance
provided by the Board of Directors and other reports;
(e) Formulate and implement the Integrated Good Governance
Committee‘s annual work plan according to the direction of
the Board of Commissioners and the Bank’s prevailing
conditions.
(f) Create annual work program;
(g) Create the evaluation report and provide the recommendation
to the Board of Commissioners at least 1 (one) time on a
quarterly basis.
B.2.4.3 Meeting and Attendance of the Integrated Good Governance
Committee
The Integrated Good Governance Committee has held 10 (ten)
meetings. Below is the information on meetings conducted by the
Remuneration and Nomination Committee in 2016:
NameTotal
Meetings
Total
AttendancePercentage
Yayat Sutaryat 10 10 100%
Klemi Subiyantoro 10 - -
Rudhyanto Mooduto 10 10 100%
Suwarta* 7 5 71.43%
Aldrin Herwany** 6 8 75%
*Appointed as the committee member on 30 March 2016
**Appointed as the committee member on 3 June 2016
B.2.4.4 Implementation of the Task of the Integrated Good
Governance Committee
The following lists all of the activities of the Integrated Good
Governance Committee in 2016:
(a) Coordination with the Director of Compliance and Risk
Management;
(b) Providing inputs to the Board of the Directors;
(c) Monitor the progress report of the Bank’s Integrated Good
Governance and Integrated Risk Management implementation.
36 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.2.5 Business & Credit Monitoring Committee
Business & Credit Monitoring Committee (KPBP) of the Bank is one of the
committees established by the Bank’s Board of Commissioners to support
the effectiveness of task implementation and responsibilities. KPBP of the
Bank was established based on:
(1) Financial Authority Regulation number 55/POJK.03/2016 dated 07
December 2017 concerning The Implementation of Good Governance
for Commercial Bank;
(2) Circular Letter of Bank Indonesia number 15/15/DPNP dated 29 April
2013 concerning The Implementation of Good Corporate Governance
for Commercial Bank;
(3) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 04/SK/DK/2016 dated 30
March 2016 concerning the Working Guideline and Regulations of the
of Integrated Good Governance Committee.
(4) The Decision of the Board of Commissioners of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk. number 07/SK/DK/2015 dated 22
April 2015 concerning Allocation of Tasks and the Implementation of
the Board of Commissioners’ and Committee’s Activity Schedule.
(5) The Decision letter of the Board of Commissioners number
05/SK/DK/2015 dated 03 March 2015 concerning Guidelines and Code
of Conduct of Business and Credit Monitoring Committee.
Below is the information on the membership, structure, and skills of the
Bank’s Business and Credit Monitoring Committee of 2016.
No Name Remarks Title Expertise
1 Rudhyanto Mooduto Independent
Commissioners
Chairman Accounting and
International
Business
Management
2 Yayat Sutaryat Independent
Commissioners
Member Legal
3 Muhadi Commissioner Member Technical
4 Agus Hery Subagyo Independent
Party
Member Economy
5 Usman Independent
Party
Member of the Board
B.2.5.1 Business & Credit Monitoring Committee
All members of the Business and Credit Monitoring Committee
have no financial relationship. Management, shares ownership
and/or family relations with the Board of Commissioners, Board of
37 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Directors and/or Controlling Shareholder, or any relationship with
the Bank that may affect its ability to act independently.
B.2.5.2 The Roles and Responsibilities of the Business and Credit
Monitoring Committee
The task of Business and Credit Monitoring Committee are:
(a) Monitor the policy and the day to day business and credit of
the Bank;
(b) Other tasks instructed by the Board of Commissioners.
The following are task of the Business and Credit Monitoring
Committee:
(a) In performing its tasks, KPBP is reporting to the Board of
Commissioners;
(b) The member of KPBP is required to keep the information
obtained confidential according to the prevailing provisions;
(c) In performing its tasks, the member of KPBP is required to
follow the ethics standard of the Bank and prohibited from
taking direct or indirect personal advantage from the Bank
activities other than the honorarium and/other benefits
according to the prevailing provisions.
B.2.5.3 Meeting and Attendance of Business Monitoring and Credit
Committee
In 2016, Business and Credit Monitoring Committee held 17
(seventeen) meetings. Below is the information on meetings
conducted by the Business and Credit Monitoring Committee in
2016:
NameTotal
Meetings
Total
AttendancePercentage
Rudhyanto Mooduto 17 17 100%
Yayat Sutaryat 17 8 47.56%
Muhadi 17 14 82.35%
Agus Hery Subagyo 17 17 100%
Usman 17 17 100%
B.2.5.4 Implementation of the Task of the Business Monitoring and
Credit Committee
According to Business and Credit Monitoring Committee work
plan, the following work plan has been executed in 2016.
(a) Evaluation of business policy and credit and provide
recommendation to improve the business and credit policies
and development.
(b) Monitoring and supervising the business and credit processes;
38 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(c) Performing a review and monitoring of the Bank’s
performance;
(d) Performing a review and monitoring of the performance of
credit of the relevant Division;
(e) Performing review and monitoring to the NPL & CKPN of the
Branch Offices and relevant Divisions as well as provide
recommendations for its resolutions;
(f) Performing review and monitoring to the performance of
Third Party Funds (DPK) collection;
(g) Performing a review and monitoring to the Bank’s CASA
condition;
(h) Evaluation of fee based income achievement and
recommendation for improvement;
(i) Performing a review and monitoring to the Bank’s OPEX
condition;
(j) Reporting the business and credit monitoring activities to the
Board of Commissioners on a regular basis.
B.3 Implementation of Compliance Function, Internal and External Audit
B.3.1 Implementation of Compliance Function
B.3.1.1 Compliance Function
Implementation of Compliance Function is referred to the Central
Bank/Bank Indonesia regulation number 13/2/PBI/2011 dated 12
January 2011 concerning the Implementation of Compliance
Function in Commercial Bank. Consistent with the mandate of the
Central Bank/Bank Indonesia Regulation, the Board of Directors are
required to ensure the execution of the Bank Compliance Function.
Additionally, the Bank is required to assign a Director that
supervises the Compliance Function with the following roles:
(a) Director Function supervising the Compliance Function
i. To put in place a Compliance Culture to across the
organization level and the Bank’s business activities;
ii. Management of the Compliance Risk faced by the Bank;
iii. Ensuring the Bank’s policies, provisions, systems, and
procedures and business activities have met the provisions
of the relevant authorities and prevailing rules and
legislations; and
iv. Ensuring the Bank’s compliance with the commitments
made by the Bank to the Financial Services Authority
and/or other authorized supervision authority.
(b) The Roses and responsibilities of the Board of the Directors
supervising the Compliance Function, at least to cover the
following
39 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
i. Formulation of strategy to encourage the the Bank’s
Compliance Culture.
ii. Proposing the compliance policy or compliance principles
to be stipulated by the Board of Directors;
iii. Setting up the systems and procedures to be used in the in
the developing the Bank’s internal provisions and
guideline.
iv. Ensuring that all Bank’s policies, provisions, systems, and
procedures and business activities have met the provisions
of the relevant authorities and prevailing rules and
legislations;
v. Minimizing he Bank’s Compliance Risk;
vi. Taking measures to prevent the policy and/or the
decisions taken by the Bank’s Board of Directors from
violating the provisions of the authorities and prevailing
rules and legislations;
vii. Performing other tasks related to the Compliance
Function.
The task and responsibilities as mentioned to above does not lessen
the rights and obligations of the Director responsible for the
Compliance Function as the Bank’s Board of Directors. As stated in
the Law on Limited Liability Companies, certain actions required
the decision from all members of the Board of Directors.
B.3.1.2 The Roles and Responsibilities of the Compliance Work Unit
The tasks and responsibilities of the Compliance Work Unit to
ensure the performance of Compliance Function should at least
include:
(a) Taking the steps to support the development of Compliance
Culture across the Bank’s business activities at every level of
the organization;
(b) Identifying, measuring, monitoring, and controlling the
Compliance Risk by referring to the Regulators’ regulation
concerning the Implementation of Risk Management for
Commercial Bank;
(c) Assessment and evaluation of the effectiveness, adequacy, and
consistency of the Bank’s policy, condition, system or
procedure with the prevailing rules and legislations;
(d) Reviewing and/or giving recommendation to update and
improve the Bank’s policies, provisions, systems and
procedures according to the provisions of the Regulator and
prevailing laws and legislations;
40 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(e) Ensuring the Bank’s compliance with the commitments made
by the Bank to the Financial Services Authority and/or other
authorized supervision authorities;
(f) Making efforts to monitor the policies, provisions, systems and
procedures and Bank's business activities so that it meets the
regulator’s provisions and prevailing laws and legislations;
(g) Monitoring the internal compliance and compliance with any
amendments to the laws and legislations and provisions from
the regulator and inform such changes to all the Bank’s
management and across relevant Divisions/Work Units.
(h) Reviewing the draft of policies and procedures relevant to the
Bank’s business activities proposed by the Division/Work Unit.
(i) Reviewing the monitoring procedure of the system and policies
in every Divisions/Work Unit relevant with the Company’s
Good Governance implementation;
(j) Managing the execution of Anti-Money Laundering and
Counter Terrorist Financing (AML-CFT), Gratification
Controlling Program (GCP), reporting/grievances or Whistle
Blower System (WBS) and Wealth Report of the State Officials
(WRSO);
(k) Monitoring the compliance in the implementation of AML-
CFT, GCP, WRSO, and WBS
(l) Proposing the written policy of the AML-CFT to the Board of
Directors.
(m) Evaluating the compliance with the Bank’s internal aspect in
the form of Decision, Circular Letter, and other other forms of
letters according to the Bank’s form management consist of
official stipulation and prevailing regulation letter that have
been executed or still being proposed;
(n) Ensuring and monitoring the Bank’s compliance with the
commitments made by the Bank to and/or other authorized
supervision authorities;
(o) Developing and monitoring the Quality Assurance (QA)
function across the Bank’s business activities at every level of
the organization;
(p) Monitoring the fulfillment of the integrated needs;
(q) Developing the tools in order to improve the compliance
culture;
(r) Coordinating the formulation, development, and application of
the policies and/or guidelines to support the efficient process
of management Compliance Work Unit;
(s) Preparing, coordinating, and proposing the program for the
Compliance Work Unit to the Director who is responsible and
control the utilization of Compliance Work Unit’s budget;
41 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(t) Developing and improving the quality and performance
effectiveness of the Compliance Work Unit’s staff;
(u) Developing and facilitating the communication with the other
Divisions/Work Units, Regional Offices, Branch Offices in
executing the performance management and activities of the
Compliance Work Unit;
(v) Organizing the risk management implementation in the
Compliance Work Unit;
(w) Applying the prudential principle and compliance with the
regulator’s regulation and legislations, and other prevailing
internal regulations;
(x) Monitoring all work areas of the Compliance Work Unit
according to the prevailing provisions;
(y) Informing all the Bank’s internal regulations and other
provisions relevant to the scope of the tasks within its work
unit;
(z) Coordinating the provision of relevant data/document with
the internal and external audit according to the prevailing
regulations and within the limit of authority provided by the
Board of Directors.
(aa) Coordinating the follow-up of the external audit findings
according to the limit of authority provided by the Board of
Directors.
In the implementation of the Compliance Function, the
Compliance Work Unit assists the Compliance Director. The unit is
responsible to formulate the steps to develop a compliance culture
across the bank’s business activities at each level of the
organization, which among others executed by:
(a) Monitoring the fulfillment of the Bank's commitment to the
result of the audit reports from the Financial Services
Authority and/or other supervisory authorities;
(b) Reviewing the relevant policies and procedures on the Bank’s
business activities that have been executed based on the
information on the new provisions from the relevant
institutions or the initiatives of the Compliance Work Unit;
(c) Reviewing the draft of policies and procedures relevant to the
Bank’s business activities proposed by the related work unit;
(d) Recapitulating and monitoring the Report to be submitted to
the Bank’s Management and/or the Financial Services
Authority;
(e) Compiling the Bank’s internal or external regulations inputted
to the Development and Evaluation Group database and
42 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
informed to the Division/Unit, Regional Office and Branch
Office;
(f) Delivering the dissemination of Compliance Culture in
employee learning and training program or delivery in the the
Branch Offices;
(g) Coordinating with the KPK in the application of Gratification
Control Guideline and Wealth Report of the State Officials
(WRSO) within the Bank;
(h) Implementation of WBS reporting/complaints management;
(i) Reviewing the operational/non-operational area considered to
require new compliance sheet/evaluation of existing
compliance sheet.
In performing its business activities, the Bank has fulfilled the
regulator’s provisions related with the capital adequacy aspects,
credit, maintenance of liquidity, and the implementation of AML-
Counter Terrorist Financing Program.
Compliance AspectBank’s
Compliance
Reference
(Provisions)
Minimum Capital Adequacy
Ratio (CAR)18.43% ≥ 8%
Exceeding/Violation to Legal
Lending Limit (BMPK)None Not allowed
Non- Performing Loan Ratio
(NPL)1.69% ≤ 5%
Primary Minimum Reserve
Requirement Ratio (GWM)7.92% ≥ 7.5%
Secondary Minimum Reserve
Requirement (GWM)7.15% ≥ 4%
Minimum Reserve
Requirement in Foreign
Currency
11.33% ≥ 8%
Net Open Position Ration
(PDN)0.58% ≤ 20%
B.3.1.3 Monitoring implementation of Anti Money Laundering and
Counter Terrorist Financing (APL-CFT);
The implementation of the AML-CFT program is a continuous
program to meet the obligations under the following provisions:
(a) Law number 8 of 2010 dated 22 October 2010 concerning the
Prevention and Eradication of Money Laundering Crime;
(b) Law number 9 of 2013 dated 13 March 2013 on the Prevention
and Eradication of Terrorism Financing Crimes;
43 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(c) Central Bank/Bank Indonesia Regulation number
14/27/PBI/2012 dated December 28, 2012 concerning the
Implementation of Anti Money Laundering and Counter-
Terrorism Financing Program for Commercial Banks; and
(d) Circular Letter of Bank Indonesia Number 15/21/DPNP/2013
dated 14 June 2013 concerning the Implementation of Anti
Money Laundering and Counter-Terrorism Financing Program
for Commercial Banks.
In 2016, as the form of the Bank's serious effort to improve the
quality of risk management implementation, the Bank has
performed the following activities and development of AML-CFT
program:
(a) Monitoring the financial transactions for more complete
analysis on potential Suspicious Transactions;
(b) Submitting Suspicious Financial Transaction Report (STR) to
the Financial Transaction Reporting and Analysis Center
(PPATK);
(c) Submitting Cash Transaction Report (CTR) to PPATK;
(d) Submitting international transfer fund instruction (IFTI)
report to PPATK;
(e) Submitting Integrated Service User Information System
(SIPESAT) to PPATK;
(f) Maintaining and monitoring the customer profiles with the
lists of individuals and institutions to be monitored based on
national and international authorities’ database information;
(g) Monitoring the customers who are the suspect or defendant in
a crime and also monitoring the Suspects List and Suspected
Terrorists from the authorities or mass media or based on
other information from official sources;
(h) Coordinating with PPATK, KPK, Indonesian National Police
and other authorities concerning the information request,
account suspension and confiscation of money laundering
funds and terrorism financing cases;
(i) Monitoring the customer data updates activities performed by
all work units and branches;
(j) Effective monitoring of customer profiles and transactions by
supervising the implementation of customer groupings into
the risk level (Risk Based Approach) of money laundering
activities;
(k) Fulfillment of the requirement to open the Bank’s business
relationship with correspondent overseas bank from the APL-
CFT;
44 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(l) Reviewing the new banking products and activities related to
the AML-CFT program implementation requirements prior
commissioning the activities or products;
(m) Monitoring and giving recommendations on AML-CFT
learning and training programs to employees of the Bank to
improve understanding, awareness, and risks of Money
Laundering and Terrorism Financing crimes;
(n) Ensuring that information technology in support of AML-CFT
program implementation is consistent and includes the
development of the Bank’s business, products and services;
(o) Coordinating and monitoring the implementation of AML-CFT
program policy with relevant customer-faced work units.
As for the statistics of the implementation of AML-CFT performed
by the Banks in 2016, the following information is available:
Activities Total
Suspicious Transactions Report (STR) 297 Reports
Cash Financial Transaction Report (CTR) 19,313 Reports
International Fund Transfer Instruction Report
(IFTI)15,222 Reports
SIPESAT Report406.066 CIF
entries
Correspondence with the authorities 101 times
Assessment of AML-CFT implementation related to
New Bank Activities and Products12 Review
Implementation of AML-CFT in related
correspondent banks16 times
Number of employees attending the AML-CFT
Training1,020 employees
B.3.2 Implementation of Internal Audit Function
(1) Based on current organizational structure approved by the Board of
Directors through Letter of Decision number 621/SK/DIR-PS/ 2015
dated 1 July 2015 on Organizational Structure of PT Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk., Internal Audit Division is under
administrative line of the President Director and coordination line of
the Audit Committee.
45 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(2) Pursuant to the Letter of Decision of the Board of Directors number
729/SK/DIR-DAI/2014 dated 20 November 2014 on the Internal Audit
Charter concerning the vision, mission, functions, roles and
responsibilities of the Internal Audit Division in performing the Bank’s
effective Internal Audit.
(3) The detailed number of Internal Audit Division staffs in 2016 are as
follows:
No Designation Total
1 Division Head 1
2 Group Head 8
3 Senior Manager 1
4 Manager 5
5 Senior Officer 4
6 Officer 8
7 Staff 9
8 Junior Staff 10
TOTAL 46
(4) The Head of Internal Audit Division is a certified Qualified Internal
Auditor (QIA), Certified International Compliance & Financial Crime
from Manchester Business School and Level 5 Risk Management.
Additionally, the staff of Internal Audit Division have been included in
the following certification training:
No Name of Certification Training
Total
Certification
Training
1 BSMR1 12
2 BSMR2 7
3 BSMR3 7
4 BSMR4 1
5 BSMR5 1
The Board of
Commissioners
General Audit Group
President Director
Division Head
Information TechnologyAudit Group
Anti Fraud AuditGroup
Group Head
Group’s Service Development& Quality Assurance
Audit
Committee
46 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
6 Qualified Internal Auditor (QIA) Certification 1
7 Enterprise Risk Management Professional (ERMCP) 1
8Certified Information Systems Security Professional
(CISSP)1
9 CA/Ak 6
10 Certified Fraud Examiners (CFE) 1
11 Certified Forensic Audit (CfrA) 1
12 BREVET A&B 3
TOTAL 42
(5) Based on monitoring performed by the Service Development & Quality
Assurance (SDQA) group, the Internal Audit Division has performed an
audit with the following information:
No Plan Actual
1 30 Branch Offices 33 Branch Offices
2 5 Divisions 5 Divisions
35 Information Technology
Applications
5 Information Technology
Applications
4 0 Special Audit/Fraud 3 Special Audit/Fraud
5 0 Surprise Audit 12 Surprise Audit
(6) Internal Audit Work Unit (SKAI) has updated the Bank’s
Implementation of Internal Audit Standard Function (SPFAIB) that has
been authorized by the Board of Commissioners and approved by the
Board of Directors in the Board of Directors Decision Letter number
729/SK/DIR-AI/2014 dated 10 November 2014 Concerning the
Implementation of Internal Audit Functions of PT. Bank Pembangunan
Daerah Jawa Barat dan Banten, Tbk.
(7) The auditor team inspected the work unit and recommended for future
process improvement and informed the relevant Working Units.
B.3.3 Implementation of External Audit Function
The independent oversight function of the Bank's financial aspects is
performed by conducting audits by external auditors from Public
Accounting Firm (PAF). The external auditors reviewing the financial
statements of the Bank for financial year 2016 was determined through the
GMS based on recommendations from the Board of Commissioners and the
Audit Committee. The Bank obtains the service according to applicable
goods and service procurement mechanism. To guarantee independence
and good quality of the audit results, the external auditor appointed should
not have any conflict of interest with the Bank.
The appointment of external auditor of the Bank refers to the provisions in
the Minister of Finance Regulation number 17/PMK.01/2008 dated 5
February 2008 article 3 paragraph 1 stating that the provision of general
audit service for a financial statement of an entity to be performed by a CAP
maximum for 6 (six) consecutive financial years and by a Pubic Accountant
47 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
for maximum 3 (three) consecutive years. The Bank has consistently try to
improve the communication between the Public Accounting Firm, the
Audit and Management Committee to minimize the problems faced during
the audit process. To comply with the audit process according to
Professional Accounting Standard, work agreement, and audit scope that
have been agreed and to be completed according to the agreed time,
discussed in a regular meeting discussing some important issues.
The appointment of the Public Accounting Firm and the cost of the audit
shall be conducted in accordance with the resolution of the GMS and the
stipulated KAP and shall be a Partner In-Charge registered in Bank
Indonesia/Financial Services Authority. The Audit of Bank Financial
Statements ended 31 December 2016 was implemented pursuant to the SPK
number 0277/PSS/10/2016 dated 21 October 2016 to PAF Purwantono,
Sungkoro & Surja with audit fee of Rp. 2.145.000.000,- (two billion one
hundred forty0five million Rupiah) (including Value Added Tax (10%) and
Out-of-Pocket (OPE)).
The list of PAF that has audited the Bank's financial statements are as
follow:
Year
Financ
ial Year
Public Accountant Company PIC
In-Charge
PartnerInternational Indonesian Affiliate
2016 Ernst & Young Purwantono, Sungkoro & Surja Sinarta
2015 Ernst & Young Purwantono, Sungkoro & Surja Sinarta
2014 Ernst & Young Purwantono, Suherman & Surja Sinarta
2013 Ernst & Young Purwantono, Suherman & SurjaBenyanto
Suherman
2012 Ernst & Young Purwantono, Suherman & SurjaBenyanto
Suherman
B.4 Implementation of Risk Management and Internal Control System
B.4.1. Risk Management Implementation
The Bank implements the Risk Management System based on the following
four pillars:
(1) Active supervision of the Board of Commissioners and the Board of
Directors as part of the management oversight role.
The Board of Directors and Board of Commissioners are responsible for
the effectiveness of the Bank’s Risk Management implementation.
Therefore, the Board of Directors and the Board of Commissioners
needs to understand the risk of the Bank’s and provide clear guidance,
actively monitor and mitigate and develop a Risk Management culture
within the Bank’s organization. To support the effective
48 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
implementation of Risk Management, the Board of Directors and the
Board of Commissioners have set a clear task and responsibilities to
each unit, ensuring the sufficient organizational structure, and ensure
the adequacy of the quantity and quality of Human Resources (HR).
(2) Adequacy of policy, procedures, and stipulation of limit as the
guideline of risk management implementation.
Effective Risk Management Implementation has been supported by a
framework that includes the policies and procedures of the Risk
Management and identified risk limits that consistent with the vision,
mission, and business strategy of the Bank. The formulation of policies
and procedures of the Risk Management was performed by considering
the type, complexity of business activities, risk profile, risk level taken,
risk connections, and the regulations as stipulated by the authority
and/or healthy banking practice. Additionally, the policy and
procedure implementation of the Risk Management of the Bank must
be supported by adequacy of capital and human resources quality. For
efficient risk control, the policies and procedures of the Bank’s shall are
to be based on the the Risk Management strategy that includes the Risk
tolerance and limit. The Risk tolerance and Limit is identified
considering the level of Risk to be taken and the Bank's overall strategy.
The Risk Management framework, including its policies, procedures
and limits are established by considering the following:
(a) Risk Management Strategy
Risk management strategy is used as a reference to approach the
achievement the Risk Management’s objectives. The Bank
formulates a Risk Management strategy according to overall
business strategy by considering the risk appetite, risk tolerance,
and risk limit. The Risk Management Strategy is formulated to
ensure that the Bank's risk exposure is at or below the level that
has been established according to the Bank's internal policies,
internal procedures, laws and other prevailing legislations. The
Risk Management Strategy is formulated based on the general
principles as follow:
i. The Risk Management Strategy must be have long-term
orientation in order to ensure the Bank’s viability and the
condition or economic cycle considerations;
ii. Comprehensive Risk Management Strategy can control and
manage the Bank’s risk and its subsidiaries; and
iii. Having capital adequacy with adequate allocation of
sufficient resources.
The Risk Management Strategy is formulated by in consideration
of the following factors:
i. Economic conditions and its impact to the Bank's risk.
49 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
ii. The Bank’s organization, including the sufficiency of human
resources and supporting infrastructure.
iii. The Bank’s financial condition, organization, and its ability
to generate profits and the ability to identify, monitor, and
control risks due to changes within the internal as well as
external factors;
iv. The Bank’s portfolio mix and diversification.
The Risk Management Strategy is periodically reviewed and and
effectively communicated to all levels of the organization so that
they understand the approach taken and the compliance with all
related aspects. The Board of Directors communicates the Risk
Management Strategy effectively across levels within the
organization and reviews it periodically.
(b) The level of Risk Taken (Risk Appetite) and Risk Tolerance
It is the level of risk that the Bank’s accepted to achieve the target
and expected level of profits. Risk Appetite is reflected in the
Bank’s business strategy and target and reflects the expectation of
the stakeholders. The level of risk to be taken (risk appetite ) is
reflected in the Bank's business strategy and objectives.
The risk tolerance refers to the maximum level and type of risk
that the Bank has set. Risk tolerance describes the risk appetite.
The Board of Directors provides clear guideline on the Bank’s risk
appetite, risk tolerance, and risk limit. Risk appetite and risk
tolerance must be reflected in the Risk Management policy,
including in the setting of the limits. In setting up the risk
tolerance, the Bank must consider its business strategy and
objectives and its risk bearing capacity.
(3) The sufficiency of identification process, measurement, monitoring and
risk control process as well as the management of the information
system.
Risk identification, measurement, monitoring and control take up most
of the Risk Management implementation process. The Risk
identification is proactive in nature and it covers all products and
business activities of the Bank and performed to analyze the source of
the risk, its possibility and impact to the viability of the bank's
business.
The measurement of identified risk is further required according to the
nature and complexity of the Bank's business activities. Based on the
result of the measurement, Risk Taking Unit (RTU) along with the Risk
Management Work Unit (SKMR) as the independent party in the
monitoring process will then perform the monitoring. Additionally, to
ensure the effectiveness of the implementation in Risk Management, it
50 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
needs the support in the form of adequate risk control and risk
management information system.
(4) Comprehensive internal control system.
The process of effective Risk Management application must be
complemented by a reliable internal control system. The effective
implementation of the internal control system will help the
management of the Bank in keeping the Bank's assets safe, ensure
reliable financial and managerial reporting, compliance improvement
with laws and legislation, as well as minimizing the the risk of losses,
deviations and violations to the prudence principle. A reliable and
effective implementation of the Bank's internal control system is the
responsibility of all work and support units as well as Internal Audit
Work Unit.
Aspects where attentions should be given in the implementation of the
control system are:
(a) Effective control systems to be implemented in the application of
the Bank’s Risk Management will refer to the policies and
procedures that have been established. The implementation of
functional separation principle (four eyes principle) should
sufficient and to be executed in a consistent manner.
(b) The internal control systems in the Risk Management
implementation should least include:
i. the conformity between the internal control system and the
type and level of Risk embedded to the Bank's business
activities;
ii. the establishment of authority and responsibility to monitor
the compliance with the Risk Management policies and
procedures and establishment of Risk limit;
iii. the establishment of clear reporting lines and separation of
function from the operational working unit risk-taking unit)
to the work unit performing the control function;
iv. a clear description of an organizational structure on the tasks
and responsibilities of respective units and individuals;
v. accurate and timely financial reporting and operational
activities;
vi. sufficient procedures that ensure the compliance with the
laws and legislations;
vii. effective, independent, and objective review of the Bank's
operational policies, frameworks, and procedures;
viii. adequate testing and review to the management of
information systems;
ix. complete and adequate documentation on the scope,
operational procedures, audit findings, and responses from
the Bank’s management based on the audit results; and
51 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
x. regular and continuous verification and review on the
management of the Bank's material weaknesses and the
Bank’s correction actions for any irregularities that occurred.
(c) the minimum Risk Management review to be made should at
least include:
i. Risk Management Work Unit and Internal Audit Work Unit
to be reviewed and evaluated regularly at least once a year;
ii. the frequency or intensity of the scope of review and
evaluation may be increased based on the development of
Bank’s risk exposure, market changes, measurement method,
and Risk management;
iii. particularly for the review and evaluation of Risk
measurement by SKMR, it should at least include:
the consistency of Risk Management framework that
includes the policy, organizational structure, resource
allocation, process design of the Risk Management,
information system, and the Bank’s Risk reporting with
the development of regulation and best practice of the
Risk Management;
methods, assumptions, and variables currently in place
to measure Risk and establish the limit of Risk exposure;
comparison of Risk measurement method results using
simulation or future projection with actual results;
comparison of assumptions used in the method with
actual conditions;
comparison between the limits that have been set with
the actual exposure; and
determination of appropriateness of measurement and
risk exposure limits with the Bank’s past performance
and the Bank's capital position at the moment.
iv. Independent review or Internal Audit Work Unit to include:
the reliability of the Risk Management framework, which
includes policies, organizational structure, resource
allocation, Risk Management process design, information
systems and the Bank’s Risk reporting; and
the application of Risk Management by business units or
the supporting activities, including the SKMR’s
monitoring.
(d) Delivery of Risk Management Work Unit review assessment
results to the Board of Commissioners, Internal Audit Work Unit,
the Director responsible for the compliance function, the Audit
Committee (if any) and other relevant Board of Directors to give
input in order to to improve the Risk Management framework
and process;
52 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(e) Internal Audit Work Unit to monitor the improvements made to
the internal or external audit findings; Internal Audit Work Unit
to inform the Board of Directors for any findings that have not
been followed up so that the required steps can be made;
(f) The Bank’s responsiveness to weaknesses and/or irregularities
occurred to the internal and external provisions currently in
place.
There are 8 (eight) types of risks that the Bank needs to properly manage.
They are Credit Risk, Liquidity Risk, Market Risk, Operational Risk,
Strategic Risk, Compliance Risk, Legal Risk, and Reputational Risk.
(1) Credit Risk
In relation to the process of identification, measurement, monitoring
and control of credit risk, the Bank has performed the following:
(a) Comprehensive analysis of its internal and external aspects on a
regular basis through Root Cause of Credit Risk analysis (RCCR)
containing the analysis of the decrease in debtors’ collection that
have caused the Non- Performing Loans (NPLs).
(b) Calculation of stress test to the Credit Risk delivered to the
Director of Compliance and Risk Management. Additionally, the
Bank has performed Bottom Up Stress Test (BUST) analysis, the
report is submitted to the Financial Services Authority (OJK) as
part of the Financial Sector Assessment Program (FSAP) and
stress tests has been set up which focuses on the establishment of
BPD Banten. The stress test was performed using the level
portfolio approach and the objective was to calculate the shock
impact of macroeconomic conditions to the NPL increase across
the bank. The calculations were made using the satellite model
and it includes productive and non-productive credit in all
economic sectors. it is a multiple regression calculation
connecting the macroeconomic conditions as independent
variable and NPL as dependent variable.
(c) In relation to the process of identification, measurement,
monitoring, and control of credit risk in the credit business
division, a report is made on the regular basis regarding the
development of credit risk exposure made for risk mitigation
purpose and as an effort for immediate improvement according to
the risk level. The quality of credit portfolio monitoring is also
reported regularly to the Board of Directors by reporting as
follow:
i. Regular review and evaluation through business review
including the discussion on the position and quality of loan
portfolios;
53 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
ii. Risk potential in credit activities reported independently by
the Risk Management Work Unit.
Additionally, the Bank also performs credit monitoring and it
contains the information on:
i. Financial condition of the debtor;
ii. Collateral adequacy;
iii. Monitoring of the compliance with the credit agreement
requirements;
(2) Market Risk
The Market Risk Management efforts performed by the Banks are as
follow:
(a) The Bank has the procedures on the identification of banking
book interest rate risk that is supported by an sufficient
information system and availability of daily reporting on the
fluctuation of exchange rate, interest rate and other market
information to the Board of Directors including over limit;
(b) Daily mark to market process exists to the bank’s trading
transaction to find out the loss/profit made by the bank and the
method of mark to market is also exists, including the
contingency plan procedures in its mark to market process when
extraordinary conditions occur;
(c) The Bank performs regular review or validation to the market risk
measurement model using the back testing and the measurement
model is still valid s per results of the back testing. As for the
validation and back testing was arranged in the form of VaR
(Value at Risk ) report and model validation;
(d) The Bank has daily limit monitoring procedures as the standard
of monitoring for the Risk Management Division to dealing room
treasury activities including the follow-up to be performed by the
risk-taking unit in the event of limit is exceeded and it is reported
to the Board of Directors;
(e) The Bank exercises market risk control by monitoring transaction
contracts and counterparty credibility review on a daily basis and
it is monitored by a dedicated experienced person. In setting the
limit of counterparty, other independent work units from the
business unit was assigned so that the limit setting process
involves four eyes principle;
(f) To improve the information on market risk exposure of the bank,
relevant units have reported the market risk exposure on daily
baisis (treasury utilization), weekly basis (treasury utilization
report), monthly basis (analysis of market risk and liquidity
measurements), semiannual (market risk stress test) to the Board
of Directors and executive officers and therefore it is expected
54 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
that follow-up actions for improvement and mitigations will be in
place to reduce the fitur risks;
(g) In the measurement process, the monitoring performed by the
Risk Management Unit in its report for the Treasury Work Unit
activity is still performed manually and no system is in place.
However, due to non-complex exposure of the bank transactions,
the mitigation of Bank’s potential risks is still under control.
(3) Liquidity Ratio
As for the the Liquidity Risk efforts performed by the Banks are as
follow.
(a) The Bank analyzes all sources of liquidity risk both from internal
and external, i.e. in the banking products and activities affecting
the source of comprehensive utilization of the funds, adequacy of
fund through the markets, and risk analysis that is supported by
sufficient information and data system;
(b) The Bank has tool of measurement ready capable of measuring
and identifying complete liquidity risks on time and based on
internal and external indicators in the early warning indicator that
measures the inherent risks concerning the composition of
funding, liquidity ratio, cash flow projection, liquidity gap,
scenario analysis and stress testing;
(c) The Bank has developed an early warning indicator of liquidity
risk. It is an indicator used to predict the potential future
liquidity crisis by identifying, measuring, and monitoring the
liquidity risk on a day-to-day basis to mitigate early should a
potential future liquidity crisis occur;
(d) The Bank monitors the limit on a daily bis, i.e. primary and
secondary GWM limit, and excess reserve (AL+NAB)/NCD
against the threshold set by the regulator including the future
actions to be preformed by the risk-taking unit if the limit is
exceeded and reports to the Board of Directors is made.
(4) Operational Risk
As for the Operational Risk efforts performed by the Banks are as
follow.
(a) The Bank tries to improve the business process especially for
credit activities. This is evident in the implementation of business
model by involving several functions such as Relationship
Manager, Relationship Officer and Account Officer accommodated
in the organizational structure and reviews of working procedures
in place to support a reliable risk management process;
55 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(b) The Bank tries to minimize the concentration of staff at the basic
level by performing employee development programs i.e. through
Staff Development Program;
(c) The Bank always improve its human resources, particularly in the
Bank's main business activities, i.e. credit/loan by providing
learning and training programs to employees;
(d) Risk taking unit performs risk assessment continuously on new
product development and activities as part of risk management
implementation;
(e) The Bank performs Operational Risk measurement process on a
regular basis by utilizing Operational Risk measurement tools
such as Risk Control Self Assessment, Key Risk Indicator,
operational risk data loss report on individual work unit and
Operational Risk profile measurement across the bank. As for the
result of the analysis of the Operational Risk assessment was
submitted to the management regularly in the monthly report;
(f) In order to maintain the interests of the Bank and discipline
enforcement, the Bank has implemented effective disciplinary
guidelines including the application of personnel sanction.
(5) Legal Risk
Through legal work unit, the Banks always involves in any legal cases
either directly or through legal consultant service upon the request of
the risk taking unit. The Bank manages the Legal Risk through:
(a) Regular legal guidelines by providing assistance in the legal cases,
legal sessions to the risk-taking unit through discussions of legal
issues encountered bu the Branch Office, and review the
agreements to be performed to protect the interest of the Bank.
However, improvements still required in the review process that
currently based on the request from the risk taking unit;
(b) Identification and control over the Legal Risk of the new products
and activities are performed by the Bank by reviewing of the
relevant legal aspects and the mitigation of Legal Risk is reported
to the Board of Directors responsible for the legal work unit;
(c) On the management of information system for Legal Risk, it has
been performed by regularly reporting the monitoring and
recording of any legal case assistance, updates of legal case being
handled by the Legal Division. A quarterly report is also provided
in the form of Legal Risk profile.
(6) Strategic Risk
The following lists down the Strategic Risk management performed by
the Bank.
56 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(a) The Bank performs Strategic Risk measurement on a regular basis
by monitoring of the achievement of the Bank's business plan
summarized in the progress report and business review on the
Bank's business development;
(b) Discussion on the achievement of the Bank's business objectives
is reported to the management regularly, including to committees
reporting to the Board of Commissioners;
(c) The Bank continuously monitor the performance of the Branch
Offices;
(d) The Bank’s has taken some actions and work out the strategy in
optimizing the settlement of non-performing loans through
collection, insurance claims and disbursement of collateral, and
increasing the CASA funds;
(e) The Bank has made the evaluation and dissemination of
information to all work units concerning the Bank's business
targets;
(f) The Bank made some improvements in its cooperation of service
with the operator/institution/agency to increase fee based income
or additional income for the Bank.
(7) Compliance Risk
The following lists down the Compliance Risk management performed
by the Bank:
(a) The identification, measurement, control, and monitoring
process are performed by implementing compliance sheet,
compliance checklist, and regular reporting on a quarterly basis
in the form of Compliance Risk profile and monitoring and
reporting activities regarding the completion of audit object by
the regulator. The bank also followed the provision of Regular
Meeting Report submission at least 1 (once) a month delivering
the following materials:
i. Discussion on the regulation applied in each work area;
ii. Monitoring the completion of the compliance with the
checklist quality assurance and execution of the work
description relevant to their area of work;
iii. Discussions of the issues faced by each work unit;
(b) The monitoring or recording of Compliance Risk by Compliance
Division have are yet to include the violation to the internal
regulation. It is still limited to the monitoring of the prudence
principal and review of the compliance aspect and reported to the
Person in Charge and under the responsibility of the Director of
Compliance and Risk Management;
(c) For business activity, new product and activities and its
development, the Bank reviews the provisions for the new
57 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
products and activities. Additionally, the Compliance Division
reviews the Bank’s policies/provisions/business activities;
(d) In order to support the implementation of effective Compliance
Risk management, particularly on the tools of Compliance Risk
i.e. compliance sheet form and compliance check list, regular
monitoring of the quality assurance is still required to ensure the
tools is working efficiently.
(8) Reputational Risk
(a) Identification and measurement of Reputational Risk are
performed regularly by monitoring the complaints made by the
customers to call center and/or frontliner;
(b) The Bank manages the administration of any negative news in the
media monitoring report. The report contains the headline, the
name of the media, including the news value to measure the
impact of the news;
(c) The Bank also manages the administration of any customer
complaints in the Customer Complaint Report submitted to the
Board of Directors on a regular basis;
(d) Monitoring of customer complaints and resolutions of customer
grievances according to the provisions/SLA are in place.
(e) Monitoring of the negative news to the Bank in different media
including search engine optimization are in place to improve the
positive image of the Bank, and assessment of reputational risk
profile through the implementation of quarterly risk profile
reporting.
(f) The Bank counters any negative reporting against itself by
disseminating positive news including advertorial that highlights
the bank’s performance and corporate action taken by the bank;
(g) The Bank immediately handles any negative reporting that
potentially give significant material and immaterial impact to the
Bank in coordination with the relevant work unit and the Bank
follows up any negative news with less significant impact
according to the prevailing regulations;
(h) The Bank keeps the customer service informed on the need for
continuous customer education to minimize the potential
Reputational Risk that may surface due to misunderstandings
related to the Bank’s product/service. Additionally, the bank visits
its network regarding the adjustments needed to the banking
industry services standard, perform coaching, and mentoring to
Branch Offices. The Bank also informs the network on the service
program and culture required to improve the Bank’s service.
58 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(i) As an effort to improve the quality of service, the Bank also
performs internal and external service surveys to improve
customer satisfaction and loyalty to Bank, they are:
i. Internal Survey:
The score of service performance meets the Market
Research Indonesia standard;
Internal monitoring by the Head Office or Regional
Office to the Branch Office:
Self-Assessment on service has been performed across
the Banks network office. Mysterious shopper by vendors
in cooperation with the Bank is also in place to provide
independent evaluation on the Bank’s service.
Service quality assurance is in place to evaluate, provide
coaching, and monitor the services at the Branch Office
to pursue service excellence and good bank image.
ii. External Survey:
With the help of the vendor, the Banks perform customer
satisfaction survey in a program called Customer Loyalty
Index and Customer Loyalty Index to find out the
customer expectation on the Bank’s service. The findings
are used to improve the satisfaction and loyalty of the
customers.
The Bank also distributes the results of customer
satisfaction/feedback to all Branch Offices as the source
for evaluation on the Bank’s services;
Quality of human resources are improved by provision of
learning and training on service excellent & service
standards as well as training on communication skills;
Additionally, to minimize the Reputational Risk arising
from customer complaints to the Bank's
products/services, the Bank, in coordination with
relevant work units continuously follows up the
disrupted machine/transaction system repairs being
performed to the ATM machines and electronic banking;
Other form of mitigation that are regular; y performed
are:
- Media visit to several printed or electronic national
media;
- Establish communication link with the investors;
- Establish good relations with local and national
media partners and conduct media gathering,
invitation to the media to cover the Bank’s activities
and organizing seminars for the media partners to
maintain the balance of coverage;
59 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.4.2. Internal Control System
The Internal Control System is an on-going oversight mechanism
established by the Bank. The design quality and its implementation is
influenced by the Board of Commissioners, the Board of Directors, all the
Bank’s officials, and employees, and designed to provide reasonable
assurance to safeguard and secure the Bank’s assets, ensure accurate
reports, improves compliance with the prevailing regulations, minimize the
impact of financial losses, irregularities including fraud and violations to the
prudential aspects, and improve the effectiveness of the organization and
improve the cost efficiency.
The scope of the general audit in evaluating internal control system
includes:
(1) Financial Aspect and Adherence include:
(a) The accuracy, completion, and timeliness of information
presented in the management reports and financial statements;
(b) Adherence to the policies and regulations that have been
established (compliance objectives/compliance audit), test the
financial activities and operations (financial process) of the object
being audited to ensure that all the rights and obligations arising
from the authorized transaction have been correctly recorded.
Additionally, it ensures that that the activities carried out were
not in conflict with the prevailing system, procedures and
regulations.
(2) Operational Aspects, it includes:
(a) Assessment and Efficiency
Identifying, analyzing, and assessing applicable regulations across
the organization, programs and activities through an audit to find
out whether the the current practice can be more efficient or
useful.
(b) Efficiency and Benefits Assessment
In depth identification, analysis, and assessment of the strategies,
policies, objectives and goals of the unit being audited, to provide
insights on the results that is actually expected from the unit’s
activities. Additionally, sufficient review of the activities was
conducted to determine whether the activities were performed
according to the regulations and achieve the results as expected.
The reasons for the operational aspect audit is the test performed by
the internal auditor on the efficiency and effectiveness of activities
implemented (performance objectives), the achievement of the goals
and objectives that have been set.
In addition to the Central Bank/Bank Indonesia/Financial Services
Authority (OJK) regulations, the Bank's internal control system also refers
to the COSO (Committee of Sponsoring Organizations of Tradeway
60 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Commission). Internal control is a series of processes performed by the
Board of Directors, Management, and the Bank’s personnel on an ongoing
basis to provide reasonable assurance to the achievement of the objectives.
The objectives of the internal control are:
(1) Effectiveness and Efficiency of Operation, that is the effectiveness and
efficiency of corporate resources utilization, i.e. fixed assets, personnel,
capital, reputation, production capability and security of resources;
(2) Reliability of Financial Report, that is accurate and timely submission of
reports for internal and external;
(3) Compliance with prevailing law and regulations, that the company is
complied with the laws and regulations, Central Bank/Bank Indonesia’s
Regulation and the Financial Services Authority Regulation.
The compliance of the Bank's internal control with COSO's internal control
framework are:
(1) Control Environment
The Board of Directors and the Board of Commissioners have
stipulated the policies that embodied the overall management control.
(a) Stipulation of bankers’ code of conduct;
(b) Setting the corporate values reflected in the 14 behaviors;
(c) Establishing the Organizational Structure that reflects the
company's business model.
(2) Risk Assessment
An effective internal control system capable of identifying and
reviewing the risks that will materially and significantly affect the
achievement of the Bank's objectives and goals. The review to cover all
the Bank’s risks on a consolidated basis (including: Credit Risk, Market
Risk, Liquidity Risk, Operational Risk, Legal Risk, Reputational Risk,
Compliance Risk and Strategic Risk). The top management has
identified, analyzed, and assessed 8 (eight) risks on a consolidated
basis. The Risk Management Division, Internal Audit Division, and
Compliance Work Unit work together in identifying and evaluating the
risks.
(3) Control Activities
The Board of Directors has established a policy that governs all
activities of bjb employees to have adequate internal control. The
actions include among others:
(a) Formulating, establishing, and approving the policies and
standard operational procedures;
(b) Assigning and separation of duties and responsibilities of all
employees according to the position;
(c) Setting the authority limits policy;
61 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(d) Establishment and implementation of Business Continuity
Management such as DRC (Disaster Recovery Center) and BRC
(Business Recovery Center).
(4) Information and Communication
Information is an important aspect in every company activity including
in the decision making. The Board of Directors has developed an
effective and quality information and communication system. As for
the the policies and actions that have been performed by the top
management are as follows.
(a) Utilization of Internet-based applications by considering the
security level and access levels according to the duties and
responsibilities;
(b) The financial transactions and accounting process adhere to the
the latest Standard of PAPI (Indonesian Banking Accounting
Regulations);
(c) The company's financial information has been audited by a public
accountant.
(5) Monitoring
The Board of Directors evaluated the implementation of internal control
across the Bank’s activities based on the Audit Result Report submitted
to the President Director and the Board of Commissioners, and copied
to the Director of Compliance and Risk Management. Additionally, the
Internal Audit Result Report is submitted to the Financial Services
Authority on every 6 (six) months.
Based on the audit performed by the Internal Audit Division to the internal
control system. The Bank has policies and control design in place in running
the company's activities, despites some minor disadvantages. Internal Audit
Division gives recommendation to the Board of Directors on the required
improvement to the internal control system and it has been followed up by
improving the internal control system.
B.5 Credit Grant to Related Parties and Large Exposures
The credit granted to the related party and large exposers. The position as of end
2016, are:
No Credit GrantedTotal
Debtor Amount (Rp)
1. To Related Party 22 168,170,771,447.
2. To Core Debtors:
a. Individual
b. Group
25
10
3,389,907,369,962.
3,379,561,323,454.
62 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.6 The Bank’s Strategic Plan
a. The short term strategy for 2017 to be performed by the Bank are:
(1) Maintaining the growth momentum of quality credit, by taking the
following actions:
(a) Maintaining and increasing the market share for fixed income credit
(KGB) and retired credit (pension credit) as the champion product;
(b) Increasing the the consumer loan portfolio through price reviews and
product features to be tailored with market needs at the Regional
Offices and Branch Offices;
(c) Increasing the loan portfolio under the management by focusing on
the disbursement to state-owned enterprises/strategic regional
government enterprises and Foreign Investment institutions that
already went public and popular;
(d) Optimization of corporate and commercial lending through:
i. Commercial loans with pricing review for either cash loan and
non-cash loan;
ii. Corporation segment loans by diversifying the financing industry
sector;
iii. Unlocking potential product holding of debtors under
management;
iv. Developing cross selling business alliance to develop value chain
potential from the customers;
(e) Improve collaboration with BPRs and MFIs through community-
based marketing activities, product and service development by
utilizing Information Technology (IT);
(f) Launching new products to penetrate small & medium enterprise
(SME) segment;
(g) Improving the function of community development (debtor and
prospective debtor) with PESAT program (Integrated Community
Economic Empowerment) to create engagement with the Bank;
(h) Increase the acceleration of credit growth KPR (home loan) and KKB
(car loan) through accelerated SLA credit process, by focusing on the
product that are targeting KPR and KKB;
(i) Ensuring sufficient qualified lending support infrastructure that
facilitates easier management and control of the risk.
(2) Liquidity management that prioritize the CASA improvement by human
to human business approach, among others:
(a) Third Party Funds
i. Promoting the growth of Third Party Funds prioritized to
improve CASA by improving the services and strategic
cooperation (strategic alliances) with State-Owned Enterprise,
Regional-Owned Enterprise and other institutions (business to
government);
63 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
ii. Improving and developing business cooperation with customer
and potential institutional customer prospects (business to
business);
iii. Development of transaction-based services to encourage funds
generation.
(b) Placement of productive assets to obtain margin from excess fund or
borrowing to meet the liquidity requirement;
(c) Additional agents for Laku Pandai bjb BiSA to achieve inclusive
finance;
(d) Development of Digital-Based Services (IT), i.e.:
i. Development of web/Internet based distribution channel service
and applications that support the institutional agreement;
ii. IT-based infrastructure addition to increase CASA and fee-based
income, particularly for retail products.
(3) Encouraging the growth of fee-based income to increase the non-interest
income contribution
As for the fee based income strategy improvement that has been
performed among others:
(a) Encouraging increase in the revenue and custodial services and
trustees;
(b) Enhancement yield of treasury instruments by considering the
liquidity risk;
(c) To be chosen by the correspondent banks in Indonesia and Asia as
the partner in an inter-bank cooperation that will support the Bank's
business;
(d) Providing internationally certified service standards (ISO 9001) for
bjb trade finance and service transactions;
(e) Opening overseas service network that have remittance potential to
increase fee based income;
(4) Controlling of the productive asset quality and acceleration of best credit
recovery write-off settlement
(a) Performing intensive reconciliation and collection with insurance
brokers and or insurers to accelerate the claims settlement;
(b) Optimization of intensive collection function of debtors with non-
performing credit quality;
(c) Improvement in the quality of all prospective debtors in a joint
discussion between the business unit and unit risk that enables the
risk appetite according to the level expected;
(d) Improving the collection process for non-performing loans through
better coordination with relevant business units;
(e) Credit rescue (restructuring) and improvement in the internal
regulations and its authority;
(f) Credit conclusion by accelerating the execution of collateral in
auction KPKNL/private auction house/voluntary sale, write off,
64 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
insurance claims, lawyer, authorized agencies including cooperation
with the Attorney and coordination with relevant units and Branch
Offices to improve the collateral contract.
(5) Spur the growth of assets through initiation of bjb holding
(a) Improve the performance of the subsidiaries and non-subsidiaries
through business synergy with the Bank, among others:
i. Through linkage credit program to affiliated BPR;
ii. Cooperation in the good governance and integrated risk
management.
(b) Injecting the capital to subsidiaries and non-subsidiaries based on the
the conditions of the subsidiaries and/or to comply with the Regional
Regulations and other regulations, to develop the business of the
subsidiary, and acquire new companies including multifinance
companies, insurance, securities and private BPR (People’s Credit
Bank).
(6) Strengthening the capital of the Banks in order to improve the resilience
of the institution and improve the competitiveness by expanding the
business, through:
(a) Reducing the Dividend Payout Ratio;
(b) Issuance of subordinate bond;
(c) Adding the capital through Rights Issues or Non-Preemptive Rights
Issues.
(7) Strengthening of the organizational structure through the support of
professional human resources
(a) Encourage more efficient and effective decision-making process by
gradual delegation of authority to the region while maintaining the
supervisory function;
(b) Organizational structure improvement by focusing to the
strengthening of business support functions by maintaining the
principles of prudence;
(c) The optimization of the Head Office, Regional Office, and Branch
Office functions through allocation of more effective and efficient
roles and responsibilities;
(d) Encouraging the Change Management Office to give innovative and
responsive inputs to ensure the execution of business plan by
monitoring the work program;
(e) Implementation of the bjb culture the initiation of Bank
transformation;
(f) Encouraging the the strengthening of "Go SPIRIT" as the corporate
culture and corporate value of bjb employees;
(g) Developing the balanced scorecard as the strategy of management
system to accelerate the achievement of the Bank’s vision;
(h) The implementation of individual score card that will enable an
employee to give their best performance, improve the loyalty and
65 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
direct performance competition toward an open, positive, and
progressive climate;
(i) Developing the bjb employees into a knowledgeable, reliable banker
through business alignment and strengthening of learning center
functions through bjb University as the strategic business partner;
(j) Continuous updating and upgrading of the employee competence to
align with to the business development;
(k) Supporting the growth of the Bank’s business through competence-
based learning & training programs and by being the strategic partner
to obtain qualified human resources;
(l) Improving the training and learning management through equal
distribution of learning and training programs for all the Banks
employees.
(8) IT improvement towards adigital banking and integrated payment system
(a) Development of IT application and infrastructure that will support
increased banking transactions in a comprehensive and continuous
way;
(b) Completing the policies and procedures that will support the
improvement of the Bank’s GCG quality particularly in IT;
(c) Support the development that of payment systems, reporting and
administration of services that will improve the security and smooth
flow of services by:
i. Developing monitoring interface application of SKNBI;
ii. Creation of inward clearing database;
iii. Development of MPN reporting application;
iv. Development of ID Billing interface application;
v. Expansion of e-banking transaction network.
(d) Features and/or e-banking transaction services additions through:
i. Expanding the collaboration with switching/regulator and biller
to improe the e-banking transaction;
ii. Development of e-banking transaction services (USSD Menu
Browser, bjb Mobile Banking);
iii. Development of e-banking features multiple accounts for bjb
NET and bjb SMS services, deposit account opening in bjb NET,
opening of term savings accounts in bjb NET, development of
purchase menu for ATM/Debit cards of other banks).
(e) Improving the IT capability and reliability that will encourage the
establishment of digital banking services, in anticipation of customer-
based electronic services need.
(9) Improving the non-business work units to support the acceleration of
quality growth of the business;
(a) Active involvement in the monitoring, research, and provision of
information on the latest banking business developments including
66 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
the strategies across the Bank and the strategy of the Branch Office
through business intelligence research with relevant business units;
(b) Ensuring the fulfillment of juridical aspects and the submission of
quality credit documents;
(c) Improving the management of third-party service cooperation to
support the Bank's quality business operations;
(d) Implementing the Legal Risk Management to support the Bank's
business progress consistent with the prevailing regulation;
(e) Encouraging effective and efficient legal services that will support a
successful Bank's business;
(f) Implementing the SQA team in each Regional Office and the service
ambassador at the Branch Office;
(g) Application of the four eyes principles in the lending process;
(h) Managing and developing the standard of credit risk measurement;
(i) Evaluation and development of risk assessment quality;
(j) Inc reading the role of internal audit as a strategic business partner
for the management and all the Bank’s employees to achieve the
Bank's objectives;
(k) Fostering anti fraud awareness within the Bank’s operations;
(l) Improving the implementation of compliance culture to internal and
external provisions and raising awareness of risk compliance as
commitment to fulfill the Bank's compliance function;
(m) Performing review to ensure the Bank's products and activities are in
compliance with prevailing regulations;
(n) Increasing the brand image of the products and services through
above the line and below the line promotion programs;
(o) Improvement of the cost center functions to control the operational
costs, to foster the awareness to meet the budget;
(p) Optimization of accounting information system to support a fast,
precise. and accurate financial information in real time to improve
the transparency quality of the financial statements.
b. As for the Bank's long-term strategy (corporate plan) is as follows:
(1) Primary Strategy
(a) The strength and opportunity strategy by replicating the pattern of
relationship between the Bank with the Provincial Government of
West Java and Banten to other provinces.
(b) Strengthening and developing the business in other regions in
Indonesia
(2) Additional Strategies
(a) Management and utilization of data for to develop the Bank’s
business;
(b) Cross selling across the departments to increase the volume of
business and efficient in terms of the cost;
67 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
(c) Inorganic Growth Strategy:
i. Diversification strategy was concentrated to: mergers and/or
acquisitions of financial institutions
ii. For inorganic growth the Banks needs to increase the capital by:
Issuing new shares (Rights Issues /Non-Preemptive Rights
Issues);
Issuing subordinated bonds to strengthen the funding
structure and meeting the liquidity requirements of the
capital market;
Increase profitability;
Dividend Payout Ratio.
B.7 Bank’s Learning and Training 2016
B.7.1 Competence Development of the Board of Commissioners
Name Designation Activities Time
Klemi
Subiyantoro
Independent
Commissioners
Acting
President
Commissioner
Asean Global Leadership
Program
8–13 May 2016
BPDSI Seminar 3 September 2016
Muhadi Commissioner BPDSI Seminar 2 April 2016
Asean Global Leadership
Program
8–13 May 2016
BPDSI Seminar 3 September 2016
Rudhyanto
Mooduto
Independent
Commissioners
Asean Global Leadership
Program
8–13 May 2016
International Risk
Management Refreshment
program for executives
15-22 October 2016
Developing Key
Performance Indicator
(KPI) of the Board of
Directors/Commissioners
and Implementation of
POJK Number
45/POJK.03/2015
24–25 February 2016
Yayat
Sutaryat
Independent
Commissioners
BPDSI Seminar 2 April 2016
International Risk
Management Refreshment
Program for Executives
15-22 October 2016
Seminar on the National
Economy Outlook 2017
Opportunities and
Challenges of the Banking
Industry
3 November 2016
68 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Suwarta Independent
Commissioners
Bank Credit Risk
Measurement, Capital and
Accounting Requirements
Under Basel III and IFRS 9
15 August 2016
B.7.2 Development of the Board of Directors Competency
Name Designation What Happens Time
Ahmad Irfan President
Director
Global Financial Services
Industry Summit 2016
1-3 June 2016
BPDSI Seminar 3 September 2016
International CWM
Executive Euro Program
16-23 October 2016
Agus
Gunawan
Director of
Micro Credit
ERMA Bali International
Conference on Enterprise
Risk Management
8-9 December 2016
Suartini Commercial
Director
Risk Management
Certification Refreshment
11 April 2016
International Risk
Management Refreshment
Program for Executive
15-22 October 2016
Fermiyanti Consumer
Director
Executive in English
Program
18 January – 4
August 2016
BPDSI Seminar 2 April 2016
International Banker
Management School
16-20 May 2016
BPDSI Seminar 3 September 2016
International CWM
Executive Europe Program
2016
16-23 October 2016
Agus
Mulyana
Director of
Compliance
and Risk
Management
International Risk
Management Refreshment
Program for Executive
15-22 October 2016
Nia Kania Finance
Director
Global Financial Services
Industry Summit 2016
1-3 June 2016
Benny
Santoso
Operations
Director
Asian Global Leadership
Program
8-13 May 2016
B.7.3 Employee Training Information
Based on the Decision Letter of the Board of Directors number 332/SK/ DIR-
ET/2014 dated 12 May 2014 regarding the Training Requirements Guideline
for Bank Employees According to the Grading System, training
requirements for the Bank’s employees for each grade:
a. Main Training
The types of compulsory learning and training for the Bank’s employees
according to the grade.
69 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
b. Technical Training
The type of training aiming at the improving the employees’ technical
competence.
c. Softskill Training
The types of training for employee development.
d. Certification
Compulsory certification program as mandated by the regulation of the
authority and consistent with the competence of the position and Bank’s
requirement.
e. Banking knowledge and other skills.
The details of training participants in 2016:
NUMBER OF EMPLOYEES ATTENDING THE TRAINING IN 2016
GRADETOTAL
TRAINING
TOTAL
EMPLOYEE
G1
On Boarding Program
564 12,159
G2 581 5,144
G3 205 486
G4
Career Development Program
276 1,817
G5 104 192
G6 377 2,564
G7 162 306
G8 261 633
G9 118 151
G10 262 1,078
G11 215 1,087
G12
Executive Program
229 749
G13 102 268
G14 102 317
G15 83 188
G16 41 82
G17 18 34
G18 19 24
G19 21 32
70 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.8 Company Secretary
Consistent with Bank Indonesia/ Financial Services Authority principles of
disclosure and provisions of the Bank's disclosure obligations, the Corporate
Secretary is responsible for the communication and delivery of important
information concerning the Bank to the banking, monetary and capital market
authorities, shareholders and the public. In 2016, the Corporate Secretary has
carried out the following activities:
a. Preparing the Board of Commissioners and the Board of Directors meeting,
record the results of the meeting and its distribution to the concerned parties;
b. Giving notice and preparing all related to organization of the General Meeting
of Shareholders and publishing the meeting results;
c. Maintaining good relations with the Capital Market Authority and prepare
reports on disclosure of the Company's information according to the with
prevailing regulations;
d. Coordinating and administering the registration of share ownership and
corporate actions;
e. Coordinating public relations and marketing communications activities for the
Company;
f. Managing and executing promotional activities of the Bank’s products and
services, including the preparation of the Annual Financial Report;
g. Managing relations with other institutions (counterparty);
h. Coordinating and monitoring the follow-up on customer grievance;
i. Branch Office development through learning and trainings in public relations,
customer complaints, and secretariats;
j. Implementing CSR (Corporate Social Responsibility) program as the form of
Company’s contribution and attention in improving the quality of life of the
surrounding communities;
k. Applying the prudential principle and compliance with the Central Bank/Bank
Indonesia regulation and legislations, and other prevailing Bank regulations;
l. Implementation of banking education campaign for the public.
PublicRelations•
Group
President Director
Division Head
Secretary to theBoard of
Directors Group
InvestorRelations
Group
Executive SecretaryGroup for the
Board ofCommissioner
MarketingCommunications Group
Corporate Social
Responsibility
(CSR) of the
Group
71 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
B.9 Bond Rating
PT. Rating Pemeringkat Indonesia (PEFINDO) on bonds issued by Banks, the bonds
of Banks were rated as AA (Double A Minus) for the rating period of 7 November
2016 - 1 November 2017.
B.10 Good Corporate Governance Activity of 2016
One of the Bank’s GCG activities implemented in 2016 was the third-party
assessment. Third party assessment was conducted through Corporate Governance
Perception Index (CGPI) organized by The Indonesian Institute for Corporate
Governance (IICG) in collaboration with SWA magazine. CGPI is a research and
ratomg actovoty for the implementation of GCG for Indonesian companies through
research design. It encourages companies to improve the quality of the
implementation of Corporate Governance concept. The goal is to ensure continuous
improvement and evaluation and benchmarking. CGPI's research and ranking
program was started in 2001 and form the the contribution from IICG in
encouraging the GCG practice in Indonesia. IICG is an independent institution
focusing on the study, development, education, training and dissemination of good
corporate governance (GCG) concept, practice and benefit for the creation of a
sustainable and trustworthy business. As for the benefits of research programs and
CGPI ranking include:
a. Motivating the companies to implement GCG;
b. Improving the insufficient internal factors of the Company to improve the
quality of GCG implementation;
c. Mapping the company's strategic issues to improve the quality of GCG
implementation;
d. Increase stakeholder’s awareness regarding the urgency and benefits of the
GCG;
e. Increasing investor and public trust and confidence to the company;
f. Establishing indicators or standards of GCG sustainability quality to be achieved
by the company;
g. Increasing common awareness and commitment with internal companies.\
For the CGPI activities that have been attendend, the Bank received the rating of
"Trusted Company” with the total value of 82.80. The details are:
Assessment Stage Score WeightCompliance
Percentage
Self Assessment 26.58 30 88.6%
Document Review 20.43 26 78.6%
Paper 12.12 15 80.8%
Observation/Interview 23 29 79.3%
Total 82.13
Other activities that were implemented as the form of GCG implementation were
the implementation of ethical standards on code of conduct and management of
72 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
conflict of interest in the Gratification Control Program in the cooperation with the
Corruption Eradication Commission (Komisi Pemberantasan Korupsi). The
Gratification Control Program is a set of tools and activities as well as mechanisms
to continously control the gratification practive to maintain the integrity of the
employees from prohibited gratification practices. The gratification control
program comprise of stipulation of gratification control regulations, the
establishment of an organization that manages the gratification control,
socialization/dissemination of activities on gratification control regulation,
promotion of individual and organizational awareness activities on gratuities and
implementation of gratification acceptance report in coordination with the KPK.
In the implementation of gratification management report for the year of 2016,
there was 134 reports of gratification acceptance was made and the estimated value
was equal to Rp. 83.4 million and 49 reports with estimated value of Rp. 19.8 million
that was also managed by the Bank and used to determine the status of gratuities
received.
Based on the meeting with KPK, the Bank was informed by the KPK that for the
implementation of Gratuity Control Program, the Bank was a pioneer in the
Gratuity Control Program implementation for the banking sector, as well as in the
management of gratification control, WRSO expansion and excellent
Whistleblowing System. This is evidenced by comparative studies made by several
institutions to the Bank to find out the implementation of the Bank’s Gratification
Control Program, including the study from the Ministry of Finance, the Ministry of
Justice and Human Rights, the Financial Services Authority, Bank Mandiri, BNI etc,
as well as the awards from Corruption Eradication Commission to the Gratification
Control Unit of the Bank during the International Anti-Corruption Day activities in
2016 and other activities that were also received awards are:
a. BUMN/D with the Best Gratification Control System of 2016;
b. Appreciation for the High Level of Compliance and Level of Activity of WRSO
Management for the Year 2016;
c. The Best WRSO Management of Local Government/Regional
Parliament/Regional-Government Owned Entersie in West Java Province for
the Year 2016.
C. Share Ownership of the Members of the Board of Commissioners and Board of
Directors that Reach 5% (five percent) or More from the Paid-in Capital
All the Boards of Commissioners and the Board of Directors do not own the shares of 5%
(five percent) or more from the company’s paid up capital, whether in Banks, other
banks, non-bank financial institutions and other companies domiciled in the country or
abroad. They are:
73 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Designati
onName bank bjb
Other
banks
Non-Bank
Financial
Institutions
Remarks
The Board
of
Commissio
ners
Muhadi x x x
Klemi Subiyantoro x x x
Yayat Sutaryat x x x
Rudhyanto
Mooduto
x x x
Suwarta x x x
Board of
Directors
Ahmad Irfan x x x
Agus Gunawan x x x
Benny Santoso x x x
Suartini x x x
Nia Kania x x x
Fermiyanti x x x
Agus Mulyana x x x
As for the the Company's share ownership as per December 2016:
No Name DesignationAmount
(shares)Percentage
1 Muhadi Commissioner 2,341,500 0.024
2 Suartini Commercial Director 5,000 0.000
D. Financial Relationships and Family Relationships of the Members of the Board of
Commissioners and the Board of Directors with Other Members of The Board of
Commissioners, the Board of Directors and/or The Bank’s Controlling
Shareholder
All members of the Board of Commissioners and the Board of Directors have no financial
relationship among members of the Board of Commissioners, among members of the
Board of Directors, between the Board of Commissioners and the Board of Directors,
between the Board of Commissioners and the Controlling Shareholders of the Bank and
among members of the Board of Directors and Controlling Shareholders of the Bank as
stated in an independent statement. Additionally, there are no horizontal or vertical
family relationships, including marital relationships up to the third lineage, among
members of the Board of Commissioners, among members of the Board of Directors,
between the Board of Commissioners and the Board of Directors, among the Board of
Commissioners and Controlling Shareholders of the Bank and among members of the
Board of Directors and the Controlling Shareholder of the Bank.
E. Human Resources Management
E.1 Human Resoures Planning
The increasing size of the Bank’s organization becomes a challenge in the
management of human resources amids increasing banking services competition.
The Bank’s growth through business development needs to be supported by
74 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
excellent, reliable and strong human resources through mature and measurable
human resource planning.
Through human resource planning, a strategy was established to acquire, utilize,
develop. and maintain human resources according to the company needs today and
its future development. Therefore, the recruitment, career management as well as
the management of employee compensation and benefits became the top priority in
2016.
E.2 Recruitment of Human Resources
The Company strives to continuously improve the quality and capability of its
human resource professionals. This was achieved among others through a more
selective and competitive employee selection process aiming to obtain a more
competent, superior, reliable and strong employees. In 2016, the Bank recruited
around 484 new employees. The number is consistent with Bank's business growth
in 2016.
The recruitment of the new employees in 2016 comes from the following categories:
a. Fresh graduate recruits.
This recruitment process selects college new graduates. In 2016, the Bank
recruited total 431 (four hundred and thirty one) fresh graduates that have been
successfully recruited.
b. Experienced Hire Recruitment.
This recruitment is a process of recruitment of the new employees who come
from experienced workers to find employees who are ready to work and
possessing the skills and technical knowledge for the positions required by the
Bank. As for 2016, the Bank has successfully recruited 53 (fifty-three) new
employees with different backgrounds of work experience.
c. Officer Development Program Recruitment.
In 2016, the Banks through Officer Development Prorgam (ODP) received 24
(twenty-four) employees prepared as the future Bank management.
E.3 Career Development Policy
The career development of the Bank’s employees is fostered thoroughly and
touches every aspect and position’s level. To improve the competence and add
experience and individual self-development, the Bank provides the employees with
all opportunities to develop their career. The acceleration program executed in 2016
through Staff Development Program, Acceleration Program and other career
development programs remains the priority program to improve the Bank’s
performance by increasing the motivation of the employees to better develop their
career. Through the involvement of Learning and Training Division and the roles of
the Unit Leaders, the Banks encouraged the employees to improve themselves to be
the best, reliable, and strong employees.
The employee career development can be identified through the assessment
method used as one of the parameters for employee placement and transfers
process. Each career transfer for employee development is made by considering the
75 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
readiness, skills and qualifications and what is required for the position to achieve
the Bank's strategic objectives.
E.4 Employee Competency Development
Employee capacity building is the key obtain reliable human resources to meet the
challenges faced by various positions and to nurture a dynamic performance culture
in the Bank. The Human Resources Division has performed regular assessment
programs. The purpose of this program, among others, is to map employee
competence, increase employee ability and awareness and to measure the
suitability of required competencies for certain level of position with the capability
of the employee.
The assessment result can be used as a recommendation for the employees to
develp a self-development programs and should the analysis finds gap in the
employee’s competence in certain positions, a recommendation can be submitted
to the Learning and Training Division to prepare syllabus required by the
employees. Additionally, the assesment results can also be used as one of the
decision tools to establish career development of the employee. An employee who
is considered to have the required competence to fill any managerial positions is
proposed to assume a position according to his/her capabilities.
E.5 Competency Development Policy
All employees have the equal opportunity in the career development process based
on his/her performance, competence, experience and other criteria that have been
determined and opportunities to get the learning and training needed. This is
consistent with the policies related to the development of employee competencies
as stated in the Letter of Decree of the Board of Directors number 704/SK-DIR/ET/
2014 dated 22 September 2014 Leraning and Training Management Guideline.
E.6 Performance Management System
To support the Bank's in achieving its performance objective better, the Bank has
implemented a performance management system based on personal scorecard
through bjb prestasiku. The employee’s performance objective (personal goal
setting) is determined based on the task/works and responsibilities that must be
performed by the employees in the year he/she is being appraised and has direct
connection to the achievement of the balanced scorecard of the work unit.
The setting of individual target as the Key Performance Indicator (KPI) of the
employees and disciplined monitoring and controlling process according to the
agreed KPI are crucial in th eemployee performance appraisal. In order to achieve
the best performance through quality work processes and to encourage the
optimum achievement of the target, the bjb prestasiku appraisal - personal
scorecard to is performed regularly on a quarterly basis.
76 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Balanced Scorecard and Key Performance Indicator
In selecting the strategy required to achieve the objectives, the Bank must have a
good strategy management system, as it will be used benchmark of the
performance, and the company performance. To determine the strategy, the
company must pay attention to the objectives that have been determined and it
must be measurable. The Bank used the strategic management callled Balanced
Scorecard (BSC). The Bank uses four BSC standard perspectives: financial
perspective, customer perspective, internal business process perspective, and learning
and growth perspective.
a. Financial Perspective
BSC is built from a performance measurement study in the business sector, and
financial perspective here shall refers to the financial sustainability. This
perspective is used by the shareholders to asses the organization performance.
b. Customer Perspective
The customer perspective is a customer-oriented perspective as they are users of
the product service that the company produces. This means that the company
must really pay attention to what the customer wants.
c. Internal Perspective/Business Process
The internal/business process perspective referes to a series of activities within
an organization to create products/services to meet the expectations of the
consumers. This perspective explains the management of business processes to
deliver services and values to all stakeholders and customers.
d. Learning and Growth Perspective
A learning and growth perspective means a perspective of the organization’s
ability to improve and change using internal organizational resources. Company
sustainablility in the long term depends on this perspective. Strategy is
implemented by executing initiative strategy or work program by each work
unit and it is limited by time.
By implementing BSC in the Bank, the management can communicate its strategy,
vision and mission to its employees so that both management and the employees
are united to achieve the Bank’s target.
E.7 Corporate Recognition to All Employee
To motivate the employees to maintain their high productivity, the Bank introduces
the policy of recognizing all employees in a reward and punishment mechanism.
Below is the explanation on the Bank’s reward and punishment.
a. Reward
The Bank has various award programs such as the best employee, the best
frontliner and service and the best business unit all under bjb better award with
the following explanation:
(1) The Best Employee
77 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
An appreciation program for the employee with the best performance and
successfully become role model and change agent in the implementation
of Go SPIRIT culture.
(2) The Best Frontliner and Service
An appreciation program for the frontliner, operational officer and work
unit who made the best performance in providing service excellence
according to the service standard.
(3) The Best Business Unit
An appreciation frogram for the Regional Office/Branch Office/Sub
Branch Offices with the best financial performance.
b. Punishment
The Bank also adopt the policy on punishment on Employee Discipline
Guideline providing obligations and prohibitions, types of personnel sanction,
procedure to impose employment sanctions and other matters relevant to the
enforcement of employee discipline, including the provision of penalties for the
personnel. The types of personnel sanctions imposed are in accordance with the
types of offenses committed by paying attention to the elements violation,
including negligence or deliberate actions, including the consideration on
whether fraud exist.
In 2016, the Bank imposed 68 (sixty-eight) personnel sanctions with the
following data:
(1) Reprimand for 11 people;
(2) First Warning for 8 people and Third Warning for 12 people;
(3) Statement of non-satisfaction for 14 people;
(4) Suspension of regular salary increase for 3 people;
(5) Reduction of regular salary for 3 people;
(6) Demotion for 5 people;
(7) Termination for 12 people
E.8 Employee Remuneration Strategy
The Bank's strategu on remuneration is currently governed by the Decision Letter
of the Board of Directors No. 783/SK/DIR-SDM/ 2016 dated 19 September 2016 on
The Management of Income and Employee Benefits Guideline and The Decision
Letter No. 0804/SK/DIR-SDM/2016 dated 3 October 2016 on Grading and Single
Salary Guideline.
a. Compensation and Benefit
(1) Annual salary adjustment;
(2) Employee transfer benefits;
(3) Health facility.
b. Employee Engagement
(1) Emotional Attachment
Employee remuneration strategy will always create an emotional
relationship between the company and employees. This will enable a a
78 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
comfortable working atmosphere and a high sense of belonging with the
creation of employee emotional attachment to the company.
(2) Dedication
The Motivation (employees’ remuneration) will create good working
atmosphere dedication to the company.
(3) Concentration
With employee remuneration, a good atmosphere among the employees
will be created and in turn will create focus in the performance of the job.
c. Attractive and Competittive
(1) Job Motivation
The Banks regularly adjust the salary of the employees according to the
prevailing regulations to improve the employees’ job motivation and
company loyalty.
(2) Maintaining the Purchasing Power
The employee remuneration strategy imposed by the company is expected
to provide financial support for the employees against the
changes/inflation.
(3) Decent Living Standards
The employee remuneration strategy is made to support the financial
needs of the employees due to changes in the standard of living condition
and adjustment is made according to the regional minimum wage.
(4) According to the Provisions of the Legislations.
The Bank’s remuneration strategy always complies with applicable laws
and regulations by giving attention the principles of GCG implementation
practice.
(5) Company Capability
The Employee remuneration strategy performed by the Bank does not
exceed the limit of the company's capability.
F. The Frequency of the Board of Commissioners and the Board of Directors Meeting
F.1 Frequency of the Board of Commissioners Meetings
In 2016, the Board of Commissioners conducted 35 (thirty-five) meetings. With the
following details:
No Name DesignationTotal
Attendance
1 Muhadi Commissioner 94.29%
2 Klemi Subiyantoro Independent Commissioners
Acting President Commissioner
77.14%
3 Yayat Sutaryat Independent Commissioners 94.29
4 Rudhiyanto Mooduto Independent Commissioners 100%
5 Suwarta* Independent Commissioners 74.07
* Assumed the Company’s Board of Commissioners since 31 March 2016
During the Board of Commissioners' meeting in 2016, no meetings was held using
teleconferencing technology.
79 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
F.2 Frequency of the Board of Directors Meetings
In 2016, the Board of Directors conducted 22 (twenty-two) meetings. With the
following details:
No Name DesignationTotal
Attendance
1 Ahmad Irfan President Director 100%
2 Nia Kania Finance Director 95.45%
3 Fermiyanti Consumer Director 95.45%
4 Suartini Commercial Director 95.45%
5 Benny Santoso Operations Director 100%
6 Agus Gunawan Director of Micro Credit 90.91%
7 Agus Mulyana Director of Compliance and Risk Management 100%
G. Number of Internal Fraud
Number of internal irregularities occured in the Bank in 2016 was:
Internal Fraud
(Within 1 year)
Number of Cases commited by
The Members of the
Board of
Commissioners and
Members of the
Board of Directors
Permanent
employee
Temporary
employees
Previous
Year
Year-to-
Date
Previous
Year
Year-to-
Date
Previous
Year
Year-to-
Date
Total Frauds - - 5 10 2 -
Resolved - - 5 10 2 -
By the Bank’s Internal
Resolution Process- - - - - -
No resolutions- - - - - -
Followed up with legal
process- - - 2 - -
The number fraud cases that have been resolved through internal process was 10 (ten)
cases with 2 (two) of them was followed up by legal process. The above list is a fraud case
that potentially cost the Bank of more than Rp100 millions The Bank has increased its
reward and punishment function particularly in fraud to improve the Internal Audit
Work Unit, employee discipline and business process quality.
H. Litigation Cases
Litigation CasesTotal
Civil Criminal*)
Completed (having a fixed legal force) 14 None
In the process of completion 47 None
Total 61 None
80 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
I. Conflict of Interest Transaction
The provisions on conflict of interest term have been set in:
a. The Decision letter of the Board of Commissioners number 10/SK/DK/2015 dated 2
September 2015 concerning Guidelines and Code of Conduct of the Board of
Commissioners.
b. The Decision Letter o the Board of Directors number 931/SK/DIR/2007 dated 28
September 2007 concerning Good Corporate Governance Guideline;
c. The Decision Letter of the Board of Directors number 1217/SK/DIR-KP/2015 dated 28
December 2015 concerning the Conflict of Interest Guidelines of PT. Bank
Pembangunan Daerah Jawa Barat dan Banten, Tbk.
In 2016, there were no conflict of interest transactions in the bank's business activities.
J. Buy Back Shares and/or Buy Back Bonds
In 2016, the Bank did not make buy back transactions on the shares, and the Bank also
did not make any buy back on the issued bonds.
K. Social Activities Funding for 2016
As the form of its corporate social responsibility, in 2016 the Bank disbursed CSR
(Corporate Social Responsibility) funds of Rp. 79.324.457.534 (seventy nine billion three
hundred twenty four million four hundred fifty seven thousand five hundred thirty-four
rupiah) distributed in various sectors i.e. environmental sector by 60% or Rp 47.87
billion, distributed in the education sector by 28% or Rp 22.37 billion and distributed in
the health sector by 11% or Rp 9.06 billion Rp The distribution of CSR funds that have
been performed, among others include:
SECTORS SUB SECTOR ACTIVITIESAMOUNT
(Rp)
ENVIRONMENTALCONSERVATION
Rp. 47,876,877,490
Development/Rehabilitation
public infrastructure
Bridge construction
Construction of citymonument
Environmental roadconstruction / improvement
5,004,677,765
Improvement/Quality Improvement
environement
Tree planting
Redesign/development ofpark/green open space
Development of Biopori
Environmental conservation
The construction/renovationof poor houses
Development of wastewaterdischarge line
8,493,484,009
Procurement ofinfrastructue/General
facility
Redesign of Gasibu square(fountain, running track, andlibrary)
Free bus service provisions
Infrastructure for OrphanageFacilities
10,724,988,723
81 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Improvement of thecommunity role inthe environmental
preservation
Integrated TPS Development
Integrated waste management
Discussion and environmentalcampaigns
bJb Green school
Construction of landfill
Development/procurement ofwaste processing equipment
1,220,001,000
Religious
Construction/renovation ofthe mosque
Procurement of mosquefacilities
Religious activity
12,241,783,143
Sports
Sports tournaments
Sports Coaching
Sports activities for thedisabled
895,000,000
Community
Assistance and aids for floodvictims, landslides,earthquakes
Home
Development of psychiatricboarding home
Construction of treatmentfacilities for the drug users
Allowance
5,820,411,100
Communityeconomic empowerment
bank bjb entrepreneurialprogram
UMKM Champion program
Training/seminar/entrepreneurship development
Business credit assistance
Development of food barns
Market restructuring
Development of nurseries
Street hawkers management
3,476,531,750
EDUCATIONRp. 22,379,079,730
Development/rehabilitation of educational
infrastructure
Construction/repair ofclassrooms
Construction/Repair of OtherSchool Infrastructure(Dormitory, Laboratory,Praying Room, Toilet,Cafeteria, Sports Field, Hall,Health Room (UKS), TeacherRoom)
10,938,715,230
Procurement ofeducational facilities
School’s furnitures
Provisions of EducationalGame
Development of libraries
Electrical installation of theMuslim boarding school
Provision of laboratoryequipment
3,517,200,000
82 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Procurement of personalcomputer
Digital school assistance (Edubox)
Culture,art, and history
Cultural parade
Procurement of art tools
Art and Culture buildingsupplies
Cultural artsperformance/show
4,514,184,500
National characterbuilding
Dissemination of PoliticalEducation for PKN Teachers
50,000,000
Improvement of publicaccess to educational
services
Scholarship
Story telling Activity 3,358,980,000
HEALTHRp. 9,068,500,314
Improvement to thepublic access to health
services
Free medicalexamination/treatment
Group circumcision
Blood donor activities
bjb healthy village
BPJS (Medical insurance)Membership Assistance
6,242,545,000
Procurement of healthfacilities
Ambulance assistance
Health equipment assistance
Procurement of car for BloodDonor Mobile Unit
Health equipment assistance
560,992,000
Development/rehabilitation of health
infrastructure
Repair/construction of publictoilet
Development/Procurementof clean water facilities
Development of Clean WaterSource/Artesis Well
Repair of hospitalinfrastructure (polyclinics,pharmacies, etc.)
2,264,963,314
TOTAL 79,324,457,534
L. General Conclusion of Self Assessment Results Implementation of Good
Corporate Governance Bank Implementation for Year 2016
Bank Name: PT. Bank Pembangunan Daerah Jawa Barat dan Banten, Tbk.
Position: December 2016
Self Assessment Results of GCG Implementation
Ranking Ranking Definition
Individual: 2
Reflecting the Bank's management performance of a
generally good implementation of Good Corporate
Governance (GCG). This is reflected in the sufficient
compliance of Good Corporate Governance principles.
Any insufficient implementation of the Good Corporate
83 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
Governance is insignificant and it could be resolved by
normal actions of the Bank’s management.
Analysis
Conclusion:
Based on the analysis of all criteria/indicators of the above assessment, it is
concluded that:
A. Governance Structure1. Positive factors of the governance structure of bank bjb are:
Up to December 2016, bank bjb management consists of 5 (five)
members of the Board of Commissioners and 7 (seven) Board of Directors
who have good integrity, competence, and financial reputation. This is
evidence in the implementation of fit and proper test by the Financial
Service Authority where all members of the Board of Commissioners and
Board of Directors of bank bjb have been declared passed;
No members of the Board of Commissioners and Board of Directors of
the bank bjb assuming double positions except for matters specified in
the Financial Services Authority Regulation concerning the
Implementation of Good Corporate Governance for Commercial Banks
and other provisions;
No members of the Board of Commissioners and Board of Directors of
bank bjb have a family relationship up to the second level the other
members of the Board of Commissioners and/or Board of Directors;
Bank bjb has improved the organizational structure based on the
complexity of the business it undertakes and appoints the Board of
Directors according to its respective assignments;
Bank bjb has established committees to support the implementation of
the Board of Commissioner's task (Audit Committee, Risk Management
Committee, Nomination and Remuneration Committee, Business &
Credit Monitoring Committee, and Integrated Good Governance
Committee) and all the members have the skills and competence in their
fields to meet bjb requirements.
Bank bjb has established Internal Audit Work Unit, Compliance Work
Unit and Risk Management Work Unit, with competent Human
Resources capable of working independently from business and
operational work units;
Bank bjb has established adequate policies and procedures to support all
of its business activities for example Credit Policy, Risk Management
Policy, etc.;
Bank bjb has established sufficient written policies, systems and
procedures to grant the credit to related parties and provision of
substantial funds (large exposure), along with the necessary monitoring
84 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
and management upon the occurrence of non-performing loans;
Bank bjb has established corporate governance guidelines that governs
the policies to support the bank bjb's operational activities, so that every
activity performed reflects a good corporate governance;
Bank bjb has set conflict of interest guidelines to address potential
conflict situation of interest faced by all of bjb employees;
bjb has audit charter that stipulates among other the purpose, authority
and responsibility and the position of Internal Audit Unit within the
Bank’s organizational structure. The implementation of internal audit
function standard was stipulated in the Implementation of Internal Audit
Function Standard (SPFAIB).
Bank bjb has established sufficient risk management policy that support
the implementation of good risk management and internal control;
Bank bjb has prepared GCG Implementation Report at the end of each
financial year which content is in accordance with prevailing regulation;
Bank bjb has developed realistic, comprehensive, measurable
(achievable) Bank Business Plan that observes the principle of prudence
and responsive to any internal or external changes;
bjb bank has performed the strengthening of Compliance Function
particularly the Compliance Culture through the implementation of
quality assurance function by providing compliance sheet and
compliance checklist for bank bjb operational activities. This ensures a
consistent implementation while remains the adherence to the principles
of good governance and the principles of health bank.
B. Governance Process1. Positive factors of bank bjb’s governance process are:
The Board of Commissioners performs the meetings to provide
recommendations to the Board of Directors in carrying out its functions
and responsibilities. The meeting held among others to ensure the
implementation of the good corporate governance principles across bank
bjb business activities at all levels of the organization. In performing its
supervisory duties, the Board of Commissioners has directed, monitored,
and evaluated the implementation of the bank bjb’s strategic policy;
All committees established to support the execution of the Board of
Commissioners responsibility have performed their duties independently
and provided sufficient analysis and recommendations to the Board of
Commissioners;
The Board of Directors has managed the bank bjb according to its
authority and responsibility and fully accountable for the
implementation of the bank bjbmanagement;
The Board of Directors prepared realistic, comprehensive, measurable
(achievable) Business Plan for the Bank based on a comprehensive study
85 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
on banks bjb’s business opportunities and strengths and identify the
existing weaknesses and threats;
The Board of Directors has followed up the audit findings and
recommendations from Internal Audit Work Unit, the external auditor,
the results of supervision by competent authorities by giving the
direction related to the findings and recommendations for all relevant
work units;
The Compliance Work Unit has established and provided the steps to
instill a Compliance Culture across the levels of the organization;
The Compliance Unit has reviewed and/or recommend updating and
revisions of banks bjb’s policies, conditions, systems and procedures;
The Compliance Work Unit ensures that bank bjb policies, regulations,
systems and procedures, and business activities comply with the
provisions of Central Bank/Bank Indonesia and/or Financial Services
Authority and the prevailing laws and legislations;
Implementation and monitoring as well as submission of reports on
commitments made based on the audit results of Financial Services
Authority and other authorized auditors have been performed by the
Compliance Work Unit according to the provisions of the bank bjb’s
organizational structure;
The Internal Work Audit Unit has performed independent monitoring
function with sufficient scope of work according to the work plan,
implementation. and monitoring of the audit results;
The Internal Audit Work Unit has reported all audit findings according
to the applicable regulations;
The appointed Public Accountant Company, capable of working
independently, meets the professional standards of the public accountant
as well as the scope of the audit established;
The Internal Audit Work Unit, the Compliance Work Unit and the Risk
Management Work Unit have performed their duties according to the
prevailing regulations;
Decision-making in the provision of credit is decided in a Committee
Meeting performed independently without any intervention from related
parties and/or other parties using prudential principles;
Bank bjb has submitted the financial and non-financial information
transparently.
2. The negative factors of bank bjb’s governance process are:
Fulfillments of some commitments made based on the Financial Services
Authority findings which completion takes more time therefore needs to
be rescheduled.
86 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016
C. Governance Outcome1. The positive factors of bank bjb’s governance process are:
The Board of Commissioners and the committees under the Board of
Commissioners have performed their supervisory duties and
responsibilities well. This is evidence with the supervision of the
achievement of targets/actual achievement of the Bank’s Business Plan;
The committees under the Board of Commissioners have provided the
analysis and recommendation to the Board of Commissioners. The
analysis and recommendations shall be considered by the Board of
Commissioners to implement the supervisory function of the Board of
Directors;
The Board of Directors has reported their performance of its duties to
shareholders through the General Meeting of Shareholders (AGMS) and
all implementation of the duties and responsibilities of the Board of
Directors for the fiscal year 2015 has been accepted by the shareholders;
Bank bjb has submitted the report on the performance of the duties of
the Director in charge of the Compliance Function to the Financial
Services Authority periodically according to prevailing regulations;
The Internal Audit Charter has been implemented to the Bank's
organizational structure, so that the Internal Audit Work Unit is
independent and the audit task can be objectively implemented.
The Internal Audit Unit has performed its audits according to the RKAT
2016 and the monitoring of the audit results has been performed
continuously and completion of the follow-up commitments as of
December 2016 was 100%;
External Audit has acted objectively in conducting audit and audit result
and management letter have described the bank bjb’s problems and the
report have been submitted to the Financial Services Authority by the
designated KAP on time;
The Board of Commissioners and the Board of Directors have performed
their active supervision in the implementation of Risk Management’s
policy and strategy;
The reports on the Bank’s Health Level, audit reports and others have
been reported to bank bjb’s internal or external parties according to the
prevailing regulations;
Bank bjb has determined the provisions on compliance sheet on credit to
anticipate the provision of funds to LLL, Collateral, Insurance,
Agreement, PDN etc, are according to the limitations that have been set.
During the period of July - December 2016 there were no credit that
exceed the LLL;
Bank bjb has delivered the financial and non-financial information
transparently and regularly through the website and print media.
Bandung, 21 April 2017
PT. BANK PEMBANGUNAN DAERAH JAWA BARAT DAN BANTEN, Tbk.
Signed Signed
Klemi Subiyantoro President Commissioner
Independent
Ahmad Irfan President Director
2. Negative factors of the governance outcome of bank bjb are:
On the commitment to Financial Services Authority audit findings in 2015,
of 14.37% (fourteen-point thirty seven percent) of the commitment was
rescheduled.
87 Implementation of Good Corporate Governance (GCG) of bank bjb year 2016