Board of Commissioners Report Fiscal Year 2019
Dear shareholders and stakeholders,
On behalf of the Board of Commissioners, please allow us to present report of the Board of Commissioners on the supervision and providing advice to the Board of Directors during 2019. In executing its duties and responsibilities, the Board of Commissioners always holds the principle of independence and focus on achieving the Company's Vision, namely "Becoming the Largest, Most Trusted National Toll Road Company and Sustainable". The Board of Commissioners also continues to encourage the implementation of good corporate governance practices within the Company.
Assessment of the Board of Commissioners Performance in 2019
The assessment of the Board of Commissioners performance for 2019 fiscal year was based on the Board of Commissioners Decree No. KEP-153/XI/2016 dated November 7, 2016 pertaining the Revision of Self-Assessment System for Evaluating Performance of the Board of Commissioners of PT Jasa Marga (Persero) Tbk. By using the Board of Commissioners' Key Performance Indicators, a score of 4,849 was obtained from a maximum score of 5.0 with the rating classification "Very Good".
Supervision in the Implementation of the Company Strategy
The Board of Commissioners uses the direct and indirect mechanisms in performing its supervision in the implementation of the Company's strategy. The direct mechanism is carried out through the on-site visits to the locations of Company's activities and units, with prior notice to the Board of Directors. While the indirect mechanism is done by holding a meeting with the Boardof Directors.
Based on this mechanisms, the Board of Commissioners believes that the Company's strategy has been implemented well throughout 2019. This can be seen from the achievements of predetermined performance indicators.
Procedures and Frequency of Providing Advice to the Board of Directors
The Board of Commissioners has compiled and established the annual work program of the Board of Commissioners in 2019. Every month there would be a minimum of 2 meetings, namely the Board of Commissioners meeting and the Board of Commissioners coordination meeting with the Board of Directors. In the event that the Company faces the development of situations and pressing issues that require discussion and decision of the Board of Commissioners, it is possible to add to the new agenda and hold special meetings.
In executing its duties and responsibilities in providing advice to the Board of Directors, the Board of Commissioners uses the mechanism of joint meeting with the Board of Directors and other mechanisms, such as the Board of Commissioners approval and decree issuance. With the annual work program of the Board of Commissioners, the implementation of supervision and providing advice to the Board Directors in managing the Company can be done more effectively and right on the targets.
Throughout 2019, the Board of Commissioners held 15 (fifteen) internal meetings of the Board of Commissioners and 12 (twelve) joint meetings with the Board of Directors, resulting in 20 (twenty) approvals, and 9 (nine) decrees.
Every decision taken in the meeting is monitored and the follow-up is evaluated. Until the end of 2019, almost all resolutions of the meetings have been followed up, while the rest are still in the process of completion and it is expected that most of these would be completed by early 2020.
Assessment of the Board of Directors Performance and the Basis of Assessment
The Board of Commissioners considers, during 2019, the Board of Directors has given its best efforts, thus resulting in an excellent performance of the Company. The Board of Directors and their staff have succeeded in doubling up the business, with parameters including the length of toll roads operated in 2019 reaching 1,162 km, more than double compared to 2014 which reached 576 km.
The assessment of the Board of Directors performance is based on Minister of SOEs Regulation No. 01/MBU/2011 dated August 1, 2011 concerning the Implementation of Good Corporate Governance in SOEs, which is further elaborated in the Secretary of the Ministry of SOEs Decree No. SK-16/S.MBU/2012 dated June 6, 2012 regarding Indicators/Parameters and Evaluation Indicators of Good Corporate Governance Implementation, Appendix I/6-15 Testing Aspects/Indicators Item 17 Parameters Number 58 and 59, and Testing Aspects/Indicators Item 19 Parameter Number 67, which is to supervise the Board of Directors on the implementation of the company’s plans and policies, the implementation of subsidiary management policies, as well as their role in nominating members of the Board of Directors and assessing its performance individually and collegially as well as proposing the bonus for the Board Directors and remuneration in accordance with applicable regulations
In addition to supervising and giving advice on the Board of Commissioners, the Board of Commissioners also ensures that the aspirations of shareholders are fulfilled so that the interests of stakeholders are met in achieving the Company's vision and mission.
Views of Business Prospects Prepared by the Board of Directors
The relatively stable condition of the national economy in 2019 with continued growth and inflation maintained at a low level, are factors considered by the Board of Commissioners that the business prospects of the Company that have been prepared and implemented by the Board of Directors are very appropriate.
The Board of Commissioners is of the view that the Company's business prospects are in line with the National Medium-Term Development Plan (RPJMN) 2020-2024 which supports the creation of national connectivity through increasing the construction of 4,700 km to 5,200 km of toll roads by 2024. Due to the Company's participation until the end of 2019, then the toll road that will be built by the State according to the RPJPN along the 2,500 km more until 2024.
In despite of being able to record satisfactory performance in 2019, the Board of Commissioners reminded that the Company must still be vigilant and have adequate mitigation in welcoming next year, bearing in mind that the year 2020 began with an outbreak of the COVID-19 virus which has a major impact on the world economy.
The Board of Commissioners believes that the Company will take the opportunity to continually develop the toll road constuction that provides added value to stakeholders through participating in building and operating.
Views of the Application of Good Corporate Governance
The Board of Commissioners believes the improvement of the Company's performance in 2019 is the result of effective implementation of Good Corporate Governance (GCG). The principles of GCG, namely transparency, accountability, responsibility, independency and fairness have been implemented well by the Company. These principles have been applied through various GCG mechanisms such as risk management, internal control systems, Whistleblowing System (WBS) and corporate social responsibility. The GCG assessment score for the 2019 fiscal year of 98.06 or achieving an “very good" qualification also indicates an improvement in corporate governance by the Company's management.
Views of the Application of Whistleblowing System
During 2019, the Board of Commissioners continues to encourage the Board of Directors to streamline the implementation of Whistleblowing System (WBS) which is managed by an independent and reputable third party.
The Board of Commissioners has also provided input to strengthen the existing WBS, and the Board of Commissioners together with the Board of Directors have issued joint decrees to revitalize Jasa Marga's WBS. In the view of the Board of Commissioners, the implementation of WBS in Jasa Marga has run well, but it needs to be improved even better to get to the perfection of this system.
Views of the Information Technology Governance
The Company deems necessary to implement Information Technology Governance (IT Governance) in the Company's business processes. Referring to Board of Directors Decree No. 22/KPTS/2019, currently the Information Technology in the Company has been undergoing a transformation to not only becoming a support to achieve the efficiency and effectiveness of business processes but also as an innovation to maintain business resilience and increase the Company's revenue.
The Board of Commissioners believes that the IT Master Plan for 2019-2023, used as the guide by the Company in investing and implementing in IT affairs, is in accordance with the Company's long-term goals. That is why the Board of Commissioners continues to encourage the implementation of the IT Master Plan in accordance with the schedule set by the Company and to make adjustments to the IT Master Plan in accordance with the RJPP that has been prepared from 2020 - 2024.
Performance Assessment of the Committees Under the Board of Commissioners
The Board of Commissioners is supported by organs of the Audit Committee and the Nomination, Remuneration and Risk Committee. The Board of Commissioners periodically evaluates their performances based on predetermined key performance indicators.
In 2019, the Audit Committee's Key Performance Indicator (KPI) achievement was 5.46, exceeding the target of 5.00. While the KPI of the Nomination, Remuneration and Risk Committee reached a total score of 88 (eighty-eight), increasing from 85 (eighty-five) in 2018. This achievement shows that in general the performances of the committees under the Board of Commissioners has done well.
Changes in Composition of the Board of Commissioners
In 2019, there was no change in the composition of the Jasa Marga Board of Commissioners. The Board of Commissioners members are 6 (six) people, consisting of 1 (one) President Commissioner/Independent Commissioner, 1 (one) Independent Commissioner, and 4 (four) Commissioners. The composition of the Board of Commissioners of the Company has complied with the requirements of a public company on the provision of 30% of the members of the Board of Commissioners are Independent Commissioners.
Changes in Composition of the Board of Commissioners From After the 2019 Fiscal Year Ends Until the Deadline of Submitting the Annual Report
In the period from after the 2019 fiscal year ended until the deadline for submitting the Annual Report, there was no change in the composition of the Company's Board of Commissioners.
Closing and Appreciation
The Board of Commissioners would like to express its highest appreciation to the Board of Directors and all Jasa Marga officials and employees for achieving the Company's outstanding performance during 2019. For the trust of the shareholders, the Board of Commissioners also offers its gratitude.
The Board of Commissioners will enthusiastically continue to increase the commitment for the Company to be managed properly, transparently and in a modern way by prioritizing the application of good corporate governance principles.
On Behalf of the Board of Commissioners
Sapto Amal Damandari*
President Commissioner/ Independent Commissioner
Note: *) Serving as President Commissioner/Independent Commissioner until June 11, 2020