The current trend towards a digital society is reflected in the rapid pace of changes in various areas, from changes in consumer behavior to rapidly evolving technology and on to aspects of formal regulation. This in turn requires organizations to develop the necessary capabilities in order to properly manage the risk of changes, which eventually will reflect on the ability to ”think fast and act fast” as well as in (managing the unknown). Since 2004 and continuing today, Telkom has persisted in developing and strengthening aspects of knowledge management as a vehicle for organizational and employee learning. Our aim is to position Telkom as a center of excellence by focusing on the management of human resources and knowledge towards creating competences that contribute directly on business success (from competence to commerce). This serves as the pillars of the practice of Good Corporate Governance (“GCG”) towards the sustainable existence of the Company into the future.
CONCEPT AND FOUNDATION
The commitment to create a Company that is managed in a professional, transparent, efficient, accountable, trusted, free from conflict of interest, and fair manner provides the foundation for the implementation of GCG practices at Telkom. Beyond compliance to prevailing rules and regulations at the capital markets, GCG is seen as a key element for the successful achievement of an effective, efficient and sustainable business performance needed to win the competition, and thus ensures that the Company could properly fulfill its obligations to its shareholders, customers, employees, business partners, the general public, and other company’s stakeholders.
As Telkom's shares are listed and traded at the BEI as well as NYSE, not only is the implementation of GCG shall conform to stipulations set out in the Law for Limited Liability Company and the Indonesian Code of GCG as published by National Committee on Governance Policies ("KNKG") in Indonesia, but the effective practice of GCG shall also conform to the provisions of Sarbanes Oxley Act of 2002 ("SOA") and other applicable rules of the US SEC.
There are several provisions of SOA that apply to us, in particular, those under: (i) SOA Section 404 that require our management to be responsible for the creation and maintenance of adequate internal control over financial reporting (“ICOFR”) to ensure the reliability of our financial statements and that they are prepared according to the applicable accounting standards under Indonesia's Statements of Financial Accounting Standards and/or the IFRS; and (ii) those under SOA section 302 that require our management to be responsible for formulating, maintaining and evaluating the effectiveness of our disclosure procedures and controls to ensure that information disclosed in reports is in compliance with the Exchange Act and is recorded, processed, summarized and reported within the period provided and then accumulated and communicated to our management, including the President Director and Director of Finance, so that they can take decisions related to required disclosures. For a further explanation regarding the results of management’s review of ICOFR disclosure procedures and controls and related disclosures, please see section “Procedures and Controls”.
In regards the independence of audit, Telkom is in compliance with provisions issued by the OJK and the US SEC concerning the independence of Audit Committee members.
In line with the transformation of our business portfolios into TIMES (Telecommunications, Information, Media, Edutainment and Services) businesses managed by Telkom and subsidiaries, the implementation of GCG has been further strengthened and developed within a group GCG framework, or subsidiary governance, involving all entities under the Telkom Group. The commitment to create subsidiary governance is indicated at the top level of management through the issuance and signing of a Pact of Integrity as a testament of full commitment to the implementation of GCG the Company.
2012 was a year for the strengthening of GCG across the entire business group (subsidiary governance). The objective is to ensure that GCG implementation is undertaken as part of and in harmony with, evolving business demands and changes in the industry, to which the Company has responded with its business portfolio and organizational transformation. Through the Business Effectiveness Sub-Directorate, the strengthening of GCG at Telkom Group is expanded throughout the business group towards the creation of ethical business practices (GCG as ethics) and the practice of proven GCG principles as an inseparable part of day-to-day work activities (GCG as knowledge).
Posted on August 02, 2013