Principles of Good Corporate Governance

Out of many basic tenets of sound corporate governance, the first and foremost is to set apart the Company owners from day-to-day corporate management. This system serves one essential purpose, that is to highlight efficiency and effectiveness of the business operation by hiring professionals in running the Company.

At the same time, the external capital to finance the Company’s growth, be it through equity or loans, should be separately managed by external financiers. It would afford much more assurance to both shareholders and creditors, provided that the management generally acts in the best interest of the Company. Such fine corporate governance can consequently reward the Company sustainable growth of the corporate sector.

The Structure of Corporate Governance in Intiland

The good corporate governance is to make sure that the Company can achieve its sustainability while taking care of the interests of the stakeholders. The application of the good corporate governance principles (transparency, accountability, responsibility, independency and fairness) goes through the board of commissioners and the board of directors, prevailing by legal and regulatory environment in Indonesia and business practices and ethics of the Company.

The implementations are monitored by the internal audit whose role is to audit, evaluate and analyze the operations of the Company and to identify any potential risks of each activity while audit committee helps the board of commissioners in ensuring good corporate governance practice, maintaining an adequate internal control structure and process, and increasing the quality of disclosures and financial reporting.

In addition, the Company also has risk management committee who helps the board of directors in analyzing and identifying risks in relation to new project proposals and to provide recommendations on how to mitigate such risks.

To ensure the effective communications between the Company and its stakeholders, the Corporate Secretary is responsible to make certain that information on the Company is accessible to its stakeholders. Last component in the Company’s corporate governance structure is the corporate social responsibility. To maintain the sustainability of the company, the board of directors must ensure to fulfill the company’s social responsibility. Corporate social responsibility is strategized and implemented mostly on a project level to balance the needs of the company and the needs of the surrounding people.

The General Meeting of Shareholders

The General Meeting of Shareholders is the instrument for shareholders to make important decisions related to their shares and interests in the Company prevailing by the regulations and by the Company’s article of association. However, decisions made must be based on the Company’s long-term business objectives. The General Meeting of Shareholders or the shareholders cannot intervene the jobs and functions of the commissioners and directors.

Board of Commissioners

The Board of Commissioners (BOC) of Intiland is responsible to supervise and give consultations whenever required to the Board of Directors (BOD). BOC also ensures that the Company conducts its business in accordance with the prevailing laws and regulations and considers the interests of various stakeholders of the Company. Another responsibility is to monitor the effectiveness of the Company’s corporate governance practices. If necessary, BOC is allowed to step in and make immediate changes.

BOC Intiland consists of 6 (six) commissioners. At the beginning of 2010, 2 (two) commissioners resigned. Tjan Soen Eng through his letter dated February 12, 2010, and Rudy Soraya through his letter dated February 15, 2010, informed their resignations due to their busy activities and frequent travelling schedules. The General Meeting of Shareholders held on 29 March 2010 accepted their resignations and appointed new commissioners: Thio Gwan Po Micky and Gunawan Angkawibawa. They both are independent commissioners

Board of Directors

The Board of Directors of Intiland (BOD) comprises a President Director/Chief Executive Officer, three Vice President Directors with two of which acting as Chief Operating Officers, an Independent Director and three Executive Directors. The roles and responsibilities of each BOD member are as follows:

• CEO – The Chief Executive Officer is responsible for the overall strategic management, growth and long-term profitability of the Company in order to maximize the long-term shareholder value. He is chiefly responsible in executing the long-term strategies set forth by the Board of Directors and Board of Commissioners. He provides overall leadership and oversight of the executive management of the Company in consultation with the Board of Directors and is answerable to the Board of Commissioners and Shareholders. He sets the strategic plan and direction for the Company and its business units in consultation with his executive management.


• COO – The Chief Operations Officer is responsible for the overall execution of strategies and directions set forth by the CEO and the Board of Directors and all key decision makers for day-to-day operational matters of the business units under his charge. He is the second-in-command in the Company’s succession plan and answerable to the CEO.


• CFO – The Chief Financial Officer is responsible for the overall financial oversight of the Company. He is primarily in-charge of managing the Company’s capital structure to ensure adequate liquidity, solvency as well as flexibility of the Company’s financial structure. Another part of his work involves managing and minimizing the cost of financing and financing risks for the Company. He reports directly to the CEO and is the third-in-command in the Company’s line of succession.


• Director, Capital & Investment Management, and Corporate Legal – The Director, Capital & Investment Management is responsible for all aspects of the Company’s engagements and contracts with the Capital Markets. He is chiefly responsible for sourcing, negotiating and procuring various types of funding from financial institutions such as banks, investment funds and other financial investors. He works closely with the CFO in formulating solutions for external financing of the Company’s capital expenditure and working capital needs, as and when required. As the Director of Corporate Legal, he is also responsible for assessing legal contracts with assistance of the Company’s legal counsel and advisors.


• Director, Business Development – The Business Development Director’s key responsibility is to develop the Company’s businesses including new projects and products to better serve its customers. He is responsible for assessing the viability of potential acquisitions such as land parcels and buildings, in consultation with the corporate marketing team, the CFO and the COO.


• Independent Director – As regulated by Indonesia Stock Exchange in its Listing Regulation No. IA, listed companies should appoint an Independent Director. The purpose of identifying and appointing an Independent Director is to ensure that the board can effectively exercise their fair judgment for the exclusive benefit of the Company.

Audit Committee

The Audit Committee is responsible to support the supervisory function of BOC over good corporate governance practice, maintain adequate internal control structure and process, improve the quality of disclosure and financial reporting, and conduct risk management. Together with BOC, in 2010, the Audit Committee manages the business risk identification, effective and efficient operational control, quality of management and financial information, and the company’s compliance to the rules and regulations.

Corporate Secretary

The corporate secretary’s main functions are to keep up-to-date with capital market regulations and ensuring investor’s accessibility to the Company’s information and records. This function is regulated by Bapepam as listed in Bapepam regulations No.IX.I.4, based on Decision Letter of Bapepam Chairman No.Kep-63/PM/1996.

Internal Audit

Formed in 2005, the Internal Audit Division was formed in compliance to the Bapepam LK No Kep-496/BL/2008. The Company effectively incorporates and adjusts to the role and function of this unit through its Internal Audit Charter, approved by the BOC and BOD in December 2009. Structurally Internal Audit Personnel candidates are proposed by the BOD and approved by the BOC.
Internal audit is entrusted with the role and responsibility of auditing, evaluating and analyzing Intiland and its subsidiaries operations. By identifying the risk rates of each activity, the Company is able to recommend a course of action to improve those weaknesses.

Risk Management Committee

The Company’s risk management committee (RMC), which has been in place since 2008, consists of two commissioners, three directors, one member of the Company’s internal audit division, one member of the Company’s operations division and one member of the Company’s marketing division It performs its function in accordance with the decision of the Board of Directors dated 28 May 2008 which was approved by the Board of Commissioners. Assisting the BOD in analyzing and identifying the risks of new projects proposal, RMC also recommends proper course of action in mitigating those risks. In 2010, there were no significant new projects going into RMC’s analysis.