- The government recently amended Regulation of the Government No. 45 of 2005 on the Establishment, Organization, Supervision and Disbandment of State-Owned Enterprises (Badan Usaha Milik Negara – "BUMN") through the issuance of Regulation No. 23 of 2022 ("Amendment").
- The Amendment states that whenever appointing Boards of Directors (“BoD”), the Minister of BUMN ("Minister") should stipulate a list and track record that must be taken into consideration by both a relevant General Meetings of Shareholders ("RUPS") and the Minister during the appointment of said BoD.
- Furthermore, in terms of liability, BoD cannot be held liable for any losses that are sustained, provided that they manage to prove the following: 1) That the relevant losses have not resulted due to their fault or negligence; 2) That they have engaged in management in good faith and through the exercising of due care in accordance with the objectives of the relevant BUMN; 3) That they had no conflicts of interest, either directly or indirectly, with the decision that ultimately led to the relevant losses; and 4) That they have taken measures in order to prevent any further losses being sustained.
- In terms of the termination of any Board of Commissioners ("BoC"), in addition to the reasons for termination that are set out under the Amendment, BoC and Supervisory Boards may also be terminated for other reasons that are considered reasonable by RUPS/Minister and that relate to the purpose and objectives of the relevant BUMN. Furthermore, opportunities for individuals to defend themselves in relation to their terminations will not initiated, provided that the relevant terminated individuals do not object to their terminations.
- The Amendment has been in force since 8 June 2022.
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