Overview

As the legal counsel of a company, one should be capable of comprehending and understanding the various rules and restrictions which apply to both Boards of Directors (“BoD”) and Boards of Commissioners (“BoC”). In addition to the day-to-day running of companies, BoD and BoC also have a duty to comply with certain rules which derive both from the relevant company’s Articles of Association (“AoA”), as well as various sectoral regulations.

One of the many rules which applies to both BoD and BoC is the so-called “interlocking directorate” (rangkap jabatan) rule, which encompasses various strict prohibitions and limitations that are often overlooked by BoD and BoC. This edition of Indonesian Law Digest (ILD) will put forward a set of guidelines for legal counsels and consultants which should prove helpful as regards compliance with various interlocking directorate rules for both BoD and BoC, as set out under the Indonesian legal system. Our discussion has been broken down into the following sections: