Training & Certification
Getting the right board in place and making sure it works effectivelly are fundamental for good corporate governance. Komite Nasional Kebijakan Governance (National Committee on Governance – NCG) Indonesia urges the importance and the urgency that corporations have such competent and skilled board, equipped with a strong internalization of GCG principles.
To assure the same level of world class board platform, a well defined board training and certification deemed necessary to stimulate and accelerate the change process of GCG internalization at corporate level. In that light, LKDI offers a specific training and certification program leading to the creation of the well trained and certified directors and or commissioners.
For that purpose, a trough and rigorous program has been developed woth a well brencmarked syllabus to several international directors education and certification program. LKDI believes that such a program will provide benefits toward the realization of GCG in Indonesia.
- To enhance the competence, credibility and effectiveness of company’s directors and commissioners in leading the GCG adoption in their firm.
- To sustain their knowledge through updating their skill with the latest development of principles, concept and best practices of GCG which are relevant to their role as director and commissioner.
- In a longer term, to develop and increase the standard of directorship professionalism to the international or world class standard.
- Concept, Principles and Practices of GCG
The course is designed to provide the participants with a thorough understanding of Good Corporate Governance (GCG) concept and principles, starting from its root theory of the firm up to the common or most acceptable global principles as suggested by OECD and the World Bank. A brief review of the Agency Theory and corporate governance reform development history will be of interest to the participants, linking to its still relevancy with the modern firm organizations’ challenges.
The course will elaborate the Indonesian Code of Corporate Governance and relevant SOE regulations on GCG adoption, whilst confronting certain suggested principles versus the prevailing practices and challenges around us. The course will also accommodate sharing and internalizing on some better practices references through a discussion or short case study review on GCG practices at several corporations.
- Business Ethics
In an economy run on market principles the business of business is business, freedom of doing business is essential. However, freedom to pursue business goals and objectives also carries obligations to ensure that the freedom is enjoyed responsibly, that there is a level-playing field for all, and that ultimately the market survives and prospers. Some of these obligations are stipulated in law. They serve as a final defense against abuse, such as corruption, fraud and other mal-practices. However, the most effective frontline defense is self-regulation through business ethics. Those in business define for themselves what other obligations there are in addition to legal requirements, how these are to be met and what sanctions are installed for those who do not abide. The higher the standard of behavior takes place, the lower the chance for abuse.
The course will take through the participants on the essence of business ethics, challenges and opportunities of being good while commercially successful. And beyond theoretical landscape of business ethics, participants will also be introduced to the rising SRI (Socially Responsible Investment) phenomenon. For example: FTSE, jointly owned by the Financial Times and the London Stock Exchange, launched in early July of 2001 the index FTSE4Good to cater to the growing number of investors who are reluctant to get rich from others’ hardship, hence they seek socially responsible investment (SRI) for their investment funds. It means they are only willing to invest in firms who are doing their business responsibly and ethically.
- Boards’ Duties, Liabilities and Responsibilities
The duties, liabilities and responsibilities of the company 2 board are gaining more attention than before, especially after the collapse of Enron, WorldCom and other corporate scandals in the past years. It has led to an unprecedented scrutiny of the boards – both the board of directors and the board of commissioners – and more generally, of corporate governance.
Indonesia adopts two-board system as provided in its Company Law. It brings its own unique boards’ duties, liabilities and responsibilities relationship among boards’ member, both as individual as well as collective by as organs of the firm. The participants will be taken through a thorough discussion in relation to the legal duties, liabilities and responsibilities of the boards members under the context of GCG, and their accountability to the public or stakeholders of the firms.
- Focused Risk Management
Achieving the GCG objective to create firm’s value is not free of uncertainties. The higher the uncertainties, the higher the risk faced by the firms. The boards’ challenge, however, is to manage risk effectively, not to eliminate it. In today’s modern economy, profits are the reward for successful risk taking. Companies that are overly cautious will miss opportunities and are unlikely to succeed in the longer term.
Both type of risk – down side risk and up side risk – need to be managed in order to sustain the firm’s value creation in longer term. In this regard, the participants will be introduced to the concept and practices of ERM (Enterprise Risk Management) as a tool for the board in managing the enterprise risk, ranging from financial risk and operational risk up to the strategic risk setting. For this particular topic, resource speakers will be provided from PRMIA (Professional Risk Managers’ International Association – www.prmia.org) and/or Indonesia PRiMA (Professionals in Risk Management Association),
- Leading Change
Implementing GCG is a cultural transformation or change process, from compliance to commitment and then to performance. It requires an effective change management lead by the boards – down and across the whole organization – toward the company’s vision, mission and objectives.
Therefore, understanding change management process and principles is critically important for boards’ member to be an effective change leader. The course is designed to give the participant a high level change management concept review, and exercise several case studies to gain the essence of change management practices: both the good practices versus the poor practices.
- Corporate Social Responsibility
One of the main GCG principles is “corporate social responsibility” where the company is expected to address their ‘triple bottom line’ rather than concern only on the financial result. The manner in which a company addresses the triple bottom line agenda can either enhance or undermine its reputation, brand equity, competitiveness, innovation, productivity, efficiency, risk profile, access to capital, license to operate and ability to attract and retain talent. Thus, it can have a material impact on the company’s long-term success and shareholders value. As a result, boards cannot afford to ignore such triple bottom line agenda.
The participants will be introduced to the concept and practices of triple bottom line rooted from the ‘CSR’ or Corporate Social Responsibility initiative around the world. Discussion or review on certain short case studies relating to the pros and cons of CSR value to the firm will be interactively conducted by the facilitator.
- High Quality Corporate Reporting
High Quality Corporate Reporting is an exercise of GCG principle on Accountability. It is critically important in building successful relationships with the company’s stakeholders. The information provided will comply with requirements but goes beyond that to address stakeholders’ needs, identified through dialogue with them. It is a part of continuous communication that encompass meetings and announcements to the market as well as periodic written reports in the form of preliminary announcements, interim results, the main annual report, employee reports, reports on sustainability and up-to-date information published through the corporate website.
For a board that sets out to be at the leading edge of reporting practice, a thorough step and exercise is suggested. Starting with invaluable step to ascertain how the company is currently perceived, and determine on how far the company would like to be perceived by the stakeholders. In that regard, the information provided by the board should enable stakeholders to make a balanced assessment of the company’s performance and prospects. This will, for example, mean that the management discussion and analysis report (MD&A) or its equivalent should meet the general principles of quality reporting which will be the core content of this particular course.
- Stakeholders Management and Public Governance
Corporate Governance cannot be totally separated with public governance as they influence each other and interacted simultaneously in the reality. Whilst managing stakeholder proactively and systematically is becoming crucial for the company’s sustainability, public governance is becoming more and more interlinked with stakeholders’ concerns and challenges. Understanding concept, principles and challenges of stakeholder management and public governance at a deeper level will give the participants a whole, fair and integrated perspective on getting their firm fit, well governed and survive to the business and general environment of the company.Participants will be invited to actively involve in a constructive discussion, whilst building their own stakeholder management road map for their company. Along with such discussion, public governance concepts and concerns will be shared by the facilitator who highlights some topics which are relevant to the company’s concern and challenges.