ENGLISHGOOD CORPORATE GOVERNANCE
PT. CHAILEASE FINANCE INDONESIA (“CFI”) has a strong commitment to contribute to economic growth in Indonesia by serving the diverse needs of the Indonesian people from the financing sector. All CFI management realizes that these goals will not run perfectly if they are not balanced with the implementation of good corporate governance.
Guidelines for good corporate governance are based on the principles of transparency, accountability, responsibility, independency and fairness while still considering the risk factors in the company. In addition, the implementation of corporate governance is manifested by the implementation of corporate risk management, implementation of compliance monitoring, and good work units.
The system of implementing good corporate governance will affect performance and as one of the basis for assessments in determining the company's strategy and corporate supervision strategy. The main objective of implementing this corporate governance system is the existence of a process of transparency, accountability, responsibility, independence, fairness and equality in the operational process as well as in corporate management decision making.
In order for the corporate governance system to run properly and correctly, the company made a number of efforts, namely issuing policies and procedures regarding corporate governance at CFI which were then disseminated and controlled in terms of their implementation. These policies and procedures apply to the Board of Commissioners, Board of Directors, Advisors, All Committees, and all CFI Employees.
These policies and procedures serve as references and guidelines for all CFI stakeholders at all levels of the company in implementing corporate governance, so as to encourage the process of doing, checking and balance in every company's operational activities at each level and at the management level based on the principles of good corporate governance. Good Corporate Governance, namely Transparency, Accountability, Responsibility, Independence and Fairness.
The final results expected for the application of the Principles of Good Corporate Governance are:
1. All employees of the Company are able to carry out their obligations and represent the Company in accordance with the rules set forth in the company's internal regulations, including upholding work ethics and business ethics for parties related to the Company.
2. Compliance with regulators.
3. Having a healthy organizational structure, supported by adequate internal regulations, for the continuity of positive business activities.
RISK MANAGEMENT
In carrying out its business activities, the Company is very careful about all forms of risk that could potentially affect the business and cause losses to the Company. For this reason, the Company has formed committees and functions to assist the Board of Directors, which has the role of handling and coordinating all forms of issues related to Risk Management.
Implementation of Risk Management carried out by the Company refers to the laws and regulations issued by policy makers. The elements used in the application of Risk Management include the following:
Active Supervision of the BOD and BOC
The BOD and BOC play an active role in risk management activities in accordance with their respective roles and responsibilities. The BOC gives authority to the BOD to carry out business activities in accordance with the Company’s risk profile and risk appetite.
Adequacy of Policies, Procedures, and Risk Limit Setting
The Company has formulated policies, procedures, and limits related to risk management that are carried out and assessed regularly to ensure its compliance with the Company’s business activities and strategies as well as the latest regulations. These policies include authorization for credit transactions and reserve for loss of accounts receivable.
Adequacy of Identification, Assessment, Monitoring, and Risk Control Processes.
The Company has adequate mechanisms and structures to conduct all processes related to risks, from risk identification to risk mitigation. The risk management mechanism is carried out comprehensively, starting from the determination of customers’ profile to the settlement of customers’ obligation.
The Company will ensure that the process of identifying, measuring, controlling, and monitoring risks will be supported by timely management information systems, accurate and informative reports regarding the Company's financial condition, performance of functional activities, and risk exposure, and human resources who have competence in the field of risk management.
Risk Management Information System (MIS)
The Company owns an integrated risk management system with a robust database and an adequate internal procedure to support the risk management process and to improve the quality of portfolio performance reporting. This system also allows for early detection of various risks and helps in the formulation of risk management-based KPI.
To maintain the system, The risk management information system will be supported by competent human resources in the risk management information system field.
Comprehensive Internal Control System
The Company implements an internal control system which is based on the Three Lines of Defense approach: supervisory, control, and management functions, as follows:
1. First Line of Defense
Business and operational units serve as the first line of defense, and are responsible for identifying, assessing, overseeing, and mitigating risks. Their main responsibility is to manage risk exposure daily in accordance with established market targets, policies, and procedures.
2. Second Line of Defense
The Board of Directors, Finance & Accounting department, as well as the Legal and Collection department are the main units in the second line of defense through their independent supervisory functions. The Board of Directors is responsible for carrying out studies and approving the acceptable risk levels and strategies, as well as cooperating with business and operational units in ensuring risk is managed according to established limits. The Legal and Collection department manages compliance risks related to legal matters and is responsible in ensuring the dissemination and adherence of applicable regulations by all related units.
3. Third Line of Defense
To ensure that all business and operational units carry out their roles and responsibilities in accordance with established policies and procedures, the Internal Auditor performs independent audit and assessment on each process undertaken by each unit.
2024 Company Sustainability Finance Report
