Led by Pramudya A. Oktavinanda and Melati Siregar, we recently held consecutive seminars for the board of commissioners and directors of Pertamina and Indonesia Power group companies on the latest implementation of business judgment rule (BJR) in state-owned enterprises (BUMN) and their subsidiaries’ corporate actions and how the introduction of Supreme Court Circular Letter No. 10/2020 that excludes BUMN subsidiaries’ finance from the state’s finance (and therefore, state’s losses) affects such implementation.

During the seminar, we discussed the legal basis of BJR, the historical trend of criminal cases involving state’s losses (which indicate that there is indeed a positive trend for better understanding from the court on the importance of management’s flexibility in running the company’s business), and practical approaches in ensuring that the management can be considered to be in compliance with BJR (as set out under the Indonesian Company Law).

It is our sincere belief that consistent implementation of BJR will reduce inefficiencies and delay in BUMN’s decision making as management will have stronger confidence in doing what is right for the best interest of the company, knowing well that they will not be criminalized for honest business mistakes.