PT Bakrie & Brothers is committed to upholding the principles of transparency, accountability, responsibility, fairness and independence. These principles are applied comprehensively and consistently.

The Company has a long-term focus on balancing the interests of all stakeholders by ensuring that all the business activities, processes and organs of the Company are based on and refer to the principles of Good Corporate Governance (GCG), and that the interests of all parties concerned are taken into account.

The Company hold periodical internal meetings to discuss transactions, budgets, quarterly results, the development of the business and corporate action. Cooperation between Board of Commissioners and Board of Directors also strengthened over the year as part of the Company’s ongoing effort to enhance good corporate governance. One outcome of this is that the Board of Commissioners has played an increasingly active role in providing guidance to the Board of Directors.

The Company is in the process of updating the Good Corporate Governance Manual, which comprises a Code of Conduct, a Statement of GCG Policy, Transparency & Disclosure Guidelines, the Board Manual, and manuals for the various GCG supporting bodies (the Audit Committee, the Nomination & Remuneration Committee and the Risk Management Team).

This manual is intended to be used as a reference by all those concerned so that the principles of GCG can be applied more effectively, resulting in a strong foundation for the management and oversight of the Company.

Bakrie & Brothers has a commitment to conduct its operations with high respect for business ethics and the upholding of the good corporate governance principles. The Company’s approach to good corporate governance practices begins with the core principle of performance with integrity, along with the belief that pursuing profits and a high standard of good corporate governance are not mutually exclusive objectives. The Company has created a corporate governance manual which details a Code of Conduct, a GCG Policy statement, Transparency and Disclosure Guidelines, Board Manuals, and Code of Conduct manuals for the various GCG supporting bodies (the Audit, Remuneration and Nomination and Risk Management Committees). In the future, we aim to extend these good corporate governance principles to other parties, such as suppliers. The steps to perfecting GCG practices have been implemented on an ongoing basis and have been acknowledged both nationally and internationally. The GCG related awards received during 2008 were:

1. Big three nomination for the Indonesian Financial Report Awards 2008 in the investment industry category (Bapepam-LK, Economics Faculty of Universitas of Indonesia and Bisnis Indonesia).

2. Big three nomination for Best Investor Relations in the Singapore Market by an Indonesian Company (IR Magazine South East Asia, Investor Relations Professionals Association (Singapore) and Singapore Exchange)

3. Fourth place in Annual Report Awards 2007 for listed private companies in the non-financial category (BAPEPAM-LK, Indonesia Stock Exchange), Bank of Indonesia (BI), Ministry for State Owned Enterprises, Governance) Policy National Committee(KNKG), Indonesian Accountant Association and Directorate-General for Tax).

GCG effectiveness is reflected in the reports made by the Board of Commissioners, Directors and Committees within the company; and in the acknowledgements received from external parties. 

As a commitment to the shareholders and other stakeholders, the Company consistently refers to and complies with all the prevailing rules, laws and regulations, as well as its own code of conduct. The company has also committed to uphold the business policies that have been established internally. As a sample of this compliance, the Company conducts consolidated financial reporting in accordance with the prevailing accounting standards and policies issued by the Indonesian Association of Accountants and Indonesia’s Capital Market regulations.

Bapepam (Capital Market Supervisory Agency) Regulation No. IX.E.2 and the Articles of Association of the Company govern that the purchase or sale of, or participation in shares, and/or the purchase, sale, transfer or exchange of assets or portions of the business equal to or greater than 10% of its revenue or 20% of its equity must be approved by the General Meeting of Shareholders that is attended by shareholders or their proxies representing more than 50% of the total shares with lawful voting rights issued by the Company. Along with the regulation mentioned above, the company has conducted the purchase of PT Bumi Resources Tbk (BUMI), PT Energi Mega Persada Tbk (ENRG), and PT Bakrieland Development Tbk (ELTY) shares in 2008. The transaction was approved by shareholders through the Extraordinary General Meeting of Shareholders in 17 March 2008. The Share Purchasing Transaction was categorized as a material transaction as defined in Bapepam regulation IX.E.2, as its value was higher than 10% of the company’s revenue of Rp. 4,332,279,836,000 or higher than 20% of the company’s equity of Rp. 4,477,930,407,000. This amount is as reported in the Company’s Financial Report audited on 31 December 2006 by Doli, Bambang Sudarmaji & Dadang Public Accountant Bureau, an independent member of BKR Internasional. 

The Company’s code of conduct governs conflicts of interest pursuant to both Bapepam-LK (Capital Market and Financial Institutions Supervisory Agency) Regulation No. IX.E.1 and the Articles of Association of the Company. In 2008, the Company encountered one conflict of interest, a transaction described in the material transaction mentioned above. This transaction is categorized as a conflict of interest as defined by the Bapepam–LK regulation due to the conflict between the interest of the company and its main shareholders. In this case, the company and the BUMI stock sellers and BUMI itself, the ENRG stock sellers and ENRG itself, the ELTY stock sellers and ELTY itself, were controlled by the same party, Bakrie family, as stated in the letter of assertion of the parties.

The Company, current members of the Board of Commissioners and Board of Directors currently face no important cases.