Corporate Governance

AMRO CAPITAL HOLDING Inc. Corporate Governance Principles and committee charters reflect international standards as well as regulatory requirements, and they rest on a foundation of long-standing governance principles of the company and its predecessors.

The Board recognizes that governance principles will continue to evolve in the future and that the Board should continue to re-evaluate them from time to time in light of changing circumstances.

Corporate governance in the business context refers to the systems of rules, practices, and processes by which companies are governed. In this way, the corporate governance model followed by a specific company is the distribution of rights and responsibilities by all participants in the organization.

Governance ensures everyone in an organization follows appropriate and transparent decision-making processes and that the interests of all stakeholders (shareholders, managers, employees, suppliers, customers, among others) are protected.

1. Function of The Board

1.1 Criteria for Composition of the Board, Selection of New Directors

Setting the criteria for composition of the Board and the selection of new directors are Board functions. In fulfilling its responsibilities, the Corporate Governance & Nominating Committee periodically reviews the criteria for composition of the Board and evaluates potential new candidates for Board membership. The committee then makes recommendations to the Board. In general, the Board wishes to balance the needs for professional knowledge, business expertise, varied industry knowledge, financial expertise, and CEO-level business management experience, while striving to ensure diversity of representation among its members. Following these principles, the Board seeks to select nominees who combine leadership and business management experience, experience in disciplines relevant to the Firm and its businesses, and personal qualities reflecting integrity, judgment, achievement, effectiveness and willingness to appropriately challenge management.
Depends on its business condition and situation, typically there will be 2 Commissioners and 3 Directors in each company.

1.2 Assessing the Board’s Performance

The Board annually reviews the performance of the Board as a whole, including the flow of information to the Board and Board committees from management and to the Board as a whole from Board committee chairs, with a view to increasing the effectiveness of the Board. The Corporate Governance & Nominating Committee periodically appraises the framework for assessment of Board performance and the Board self-evaluation discussion with the help of external Specialist Consultant if needed.

1.3 Formal evaluation of the Chairman and the Chief Executive Officer

The Board makes an evaluation of the Chairman & Chief Executive Officer at least annually. This will normally be in January in connection with a review of executive officer annual compensation. Such evaluation is conducted by the non-management directors, guided by the Lead Independent Director. The Compensation & Management Development Committee reviews the performance of the Chairman & Chief Executive Officer in preparation for discussion by the Board.

1.4 Succession Planning and Management Development

Succession planning is considered at least annually by the Chief Executive Officer and all senior management team (SMT). The Compensation & Management Development Committee reviews the succession plan for the Chief Executive Officer in preparation for discussion by the Board, with such discussion guided by the Lead Independent Director. The Compensation & Management Development Committee also reviews the succession plan for members of the Operating Committee other than the Chief Executive Officer.

1.5 Strategic Reviews

The full Board shall engage in discussions on strategic issues and ensure that there is sufficient time devoted to the assigned directors.

1.6 Board and Management Compensation Review

The Corporate Governance & Nominating Committee makes periodic recommendations to the Board regarding director compensation.
Compensation of the Chief Executive Officer and any other officer-director is approved by the Compensation & Management Development Committee and then submitted to the Board for its ratification, with discussion of compensation of the Chief Executive Officer guided by the Specialist Consultant. Compensation for members of the Operating Committee, other than officer-directors, is approved by the Compensation & Management Development Committee, which reviews its decisions with the Board.

2. Board Composition

2.1 Size and Composition of the Board

The Board’s size is set at  minimum of 2 Commissioners and 2 Directors subject to Chairman decision.

2.2 Definition of Independence

Independence determinations. The Board may determine a director to be independent if the Board has affirmatively determined that the director has no material relationship with the Firm, either directly or as a partner, shareholder or officer of an organization that has a relationship with the Firm. Independence determinations will be made on an annual basis at the time the Board approves director nominees for inclusion in the proxy statement and, if a director joins the Board between annual meetings, at such time. Each director shall notify the Board of any change in circumstances that may put his or her independence as defined in these Corporate Governance Principles at issue.

2.3 Former Officer-Directors

As a general rule, an officer-director may not serve on the Board beyond the date he or she retires or resigns as a full-time officer

2.4 Change of Job Responsibility

A director will offer his or her resignation following the loss of principal occupation other than through normal retirement. Directors will provide prior notice in writing to the Corporate Governance & Nominating Committee of any change in their occupation or any proposed service on the board of a public or private company or any governmental position.

2.5 Director Tenure

The Board will decide tenure based on business needs, advised by Specialist Consultant to ensure sustainable business growth

2.6 Retirement Age

Retirement age is determined at 55 years and can be extended with maximum contract of 2 years in each extension period.

2.7 Limits on Board and Audit Committee Memberships

Each person serving as a director must devote the time and attention necessary to fulfill the obligations of a director. Key obligations include appropriate attendance at Board and committee meetings and appropriate review of preparatory material. Directors are also expected to attend the annual meeting of shareholders. Unless the Board determines that the carrying out of a director’s responsibilities to the Firm will not be adversely affected by the director’s other directorships: an officer-director will not serve on the board of more than two other public companies; directors who also serve as chief executive officers will not serve on more than a total of two public company boards in addition to the company of which they are CEO and the Firm; and directors who are not chief executive officers will not serve on more than four public company boards in addition to the Firm.

If a member of the Audit Committee wishes to serve on the audit committees of more than a total of three public companies, the Board must approve such additional service before the director accepts the additional position.

2.8 Majority Voting for Directors

Voting is allowed as long as minimum participation reach 2/3 of the Board of Directors composition with Chief Executive Officer has the right for final decision.

2.9 Information Provided by Directors

Each director, in connection with his or her election or reelection as a director, is required to provide documents and information with respect to the director to the Firm, including completion of the Firm’s annual director questionnaire and other documents and information as the Firm may reasonably request (“Information”). If the Board determines that any director.
(a) provided Information with respect to the director to the Firm that was untrue in any material respect or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or
(b) committed a material violation or breach of any agreement, representation or warranty of such director; such director shall immediately tender his or her resignation, and the Board of Directors shall decide, through a process managed by the Corporate Governance & Nominating Committee, whether to accept the resignation.

2.10 Stock Ownership Requirements

Maximum stock ownership for directors is 10% per each company and has to get approval from Chairman of Amro Capital Holding Inc. before purchasing it.

3. Board Committees

3.1 Number of Committees, Reporting by Committees, Assignment and Rotation of Committee Membership, and Review of Committee Charters

The Board as a whole is responsible for the oversight of management on behalf of the Firm’s shareholders. The Board is assisted in its oversight function by Board committees.
The Board has five principal standing committees: Audit Committee, Compensation & Management Development Committee, Corporate Governance & Nominating Committee, Public Responsibility Committee, and Risk Policy Committee. In addition, the Board has a Stock Committee and a Board-level Executive Committee. The Board may also from time to time establish a committee for a specific purpose. The number and responsibilities of committees are reviewed periodically.
The Audit Committee, Compensation & Management Development Committee, Corporate Governance & Nominating Committee, Public Responsibility Committee, and Risk Policy Committee review their respective committee charters at least annually and recommend any proposed changes to the Board for its approval. The Corporate Governance & Nominating Committee reviews and approves proposed changes to charters other than its own on behalf of the Board; proposed changes to its charter are subject to Board approval
Committees will generally report to the Board at the next regularly scheduled Board meeting following a committee meeting.
Membership on the committees is reviewed each year by the Corporate Governance & Nominating Committee and approved by the full Board, which also designates a chair or co-chair for each committee. Each committee member and chair serves at the pleasure of the Board. There is no strict committee rotation policy. Changes in committee assignments are made based on committee needs, director experience, interest and availability, and evolving legal and regulatory considerations
Each of the members of the Audit Committee, the Compensation & Management Development Committee, the Corporate Governance & Nominating Committee, the Public Responsibility Committee and the Risk Policy Committee will be directors for whom the Board has made an independence determination. Officer-directors may not serve on any of such committees, but may attend committee meetings at the invitation of the committee Chair.
The Board-level Executive Committee is established with the expectation that it would not take material actions absent special circumstances.
In reviewing the composition of Board committees, the Board will also consider any listing and/or regulatory qualifications as may be applicable to specific committees.

4. Board Operations

4.1 Committee and Board Agendas

Committee agendas are prepared based on expressions of interest by committee members and recommendations of management. Committee chairs give substantive input to and approve final agendas prior to committee meetings. The Chairman of the Board prepares Board agendas based on discussions with all directors and issues that arise. As stated above, the Lead Independent Director approves Board agendas and may add agenda items at his or her discretion.

4.2 Board and Committee Materials and Presentations

Information regarding items requiring Board and/or committee approval should be distributed sufficiently in advance to permit adequate preparation, subject to circumstances which prevent or limit the extent of advance distribution. Press and analyst reports shall be provided monthly in order to ensure the Board is kept informed of developments between meetings.

4.3 Regular Attendance of Non-Directors at Board Meetings

Non-directors, including members of management, may be present at Board meetings at the invitation of the Chairman.

4.4 Board Access to Management

Board members have complete access to management. A director will not discuss with management investment research involving a company with which the director is affiliated.

4.5 Board Interaction with Institutional Investors and Press

Amro Capital Holding Inc. management will assigned this task to Public Relation function that also reports to Public Responsibility Committee.

4.6 Confidentiality of Information

In order to facilitate open discussion, the Board believes maintaining confidentiality of information and deliberations is an imperative.

4.7 Board Access to Outside Resources

The main responsibility for providing assistance to the Board rests on the internal organization. The Board and Board committees can, if they wish to do so, seek legal or other expert advice from a source independent of management and shall be provided the resources for such purposes. Generally this would be with the knowledge of the Chief Executive Officer, but this is not a condition to retaining such advisors.

4.8 Director Orientation and Continuing Education

At such time as a director joins the Board, the Board and the Chief Executive Officer will provide appropriate orientation for the director, including arrangement of meetings with management. The Board considers it desirable that directors participate in continuing education opportunities and considers such participation an appropriate expense to be reimbursed by the Firm.

4.9 Code of Business Conduct and Ethics

Amro Capital Holding Inc. has a comprehensive code of business conduct and ethics (the “Code of Conduct”) that addresses compliance with law; reporting of violations of the code or of laws or regulations; employment and diversity; confidentiality of information; protection and proper use of the Firm’s assets; conflicts of interest; and personal securities and other financial transactions. Each director is expected to be familiar with and to follow the Code of Conduct to the extent applicable to them.

5. Other Matters

5.1 Transactions with Immediate Family Members

All financial services and extensions of credit provided by the Firm to a director’s spouse, minor children and any other relative of the director who shares the director’s home or who is financially dependent on the director, or any such person’s principal business affiliations (through ownership or as an executive officer), and all transactions between the Firm and any such person’s principal business affiliations for property, services or other contractual arrangements, must in each case be made in the ordinary course of business and on substantially the same terms as those prevailing for comparable transactions with nonaffiliated persons.

5.2 Confidential Voting

It is the policy of the Board that proxies, ballots and voting tabulations that identify shareholders and how they have voted will be kept confidential, except as may be required in accordance with appropriate legal process or as requested by a shareholder with respect to such shareholder’s own voting, and that no inspector of election shall be an employee of the Firm.

5.3 Repricing of Stock Options

It is the policy of the Board not to reprice stock options issued by the Firm by reducing the option’s exercise price. The Board favors equitable adjustment of an option’s exercise price in connection with a reclassification of the Firm’s stock; a change in the Firm’s capitalization; a stock split; a restructuring, merger, or combination of the Firm, or other similar events in connection with which it is customary to adjust the exercise price of an option and/or the number and kind of shares subject thereto.

5.4 Bonus Recoupment Policy

In the event of a material restatement of the Firm’s financial results, the Board believes it would be appropriate to review the circumstances that caused the restatement and consider issues of accountability for those who bore responsibility for the events, including whether anyone responsible engaged in misconduct. As part of that review, consideration would also be given to any appropriate action regarding compensation that may have been awarded to such persons. In particular, it would be appropriate to consider whether any compensation was awarded on the basis of having achieved specified performance targets, whether an officer engaged in misconduct that contributed to the restatement and whether such compensation would have been reduced had the financial results been properly reported. Misconduct includes violation of the Firm’s Code of Conduct or policies or any act or failure to act that could reasonably be expected to cause financial or reputational harm to the Firm.
Depending on the outcome of that review, appropriate action could include actions such as termination, reducing compensation in the year the restatement was made, seeking repayment of any bonus received for the period restated or any gains realized as a result of exercising an option awarded for the period restated, or canceling any unvested equity compensation awarded for the period restated. Consideration may also be given to whether or not any one or more of such actions should be extended to employees who did not engage in misconduct that contributed to the restatement.
In addition to the bonus recoupment policy, incentive awards are subject to claw back and other provisions described in the Firm’s most recent proxy statement.

5.5 Last Call

It is the policy of the Board with respect to shareholder rights plans of the Firm, commonly known as last call. Last call will be done mainly to protect the company from becoming bankrupt and loss its credibility and therefore Chairman will have his authority in making the necessary decision in absolute condition.

5.6 Communications with the Board

To contact any Board members or committee chairs, please mail your correspondence to:

Amro Capital Holding Inc.
23rd Floor, Atria @Sudirman
Kav 33A, Jalan Jend. Sudirman,
10220 Jakarta, Indonesia

If you have a particular concern regarding accounting, internal accounting controls, or auditing matters that you wish to bring to the attention of the Audit Committee of the Board of Directors, please contact us:

By mail:cs.amro@amrocorp.com.

You may report your concerns anonymously, if you wish. For complaints that are not anonymous, we will respect the confidentiality of those who raise concerns, subject to our obligation to investigate the concern and any obligation to notify third parties, such as regulators and other authorities.

Governance of Board Committee

Audit Committee

The Audit Committee assists the Board in its oversight of management’s responsibilities to assure that there is an effective system of controls reasonably designed to safeguard the assets and income of the Firm, assure the integrity of the Firm’s financial statements and maintain compliance with the Firm’s ethical standards, policies, plans and procedures, and with laws and regulations. In addition, the Audit Committee assists the Board in its oversight of the Firm’s independent registered public accounting firm and the Firm’s Internal Audit function. This committee is led by Chairman.

Compensation & Management Development Committee

The Compensation & Management Development Committee reviews and approves the corporation’s compensation and benefit programs; ensures the competitiveness of these programs; provides oversight of the Firm’s compensation principles and practices and review of the relationship among risk, risk management and compensation in light of the Firm’s objectives; and advises the Board on the development of and succession for key executives. This committee is led by Chairman.

Hiring & Nominating Committee

The Hiring & Nominating Committee exercises general oversight with respect to the recruitment, nomination and promotion of boards into certain position or higher position, including termination of boards for any reasons to protect the firm. This committee is led by Chief Operating Officer.

Public Responsibility Committee

The Public Responsibility Committee provides oversight and review of the Firm’s positions and practices on public responsibility matters such as community investment, fair lending, sustainability, consumer practices and other public policy issues that reflect the Firm’s values and character and impact the Firm’s reputation among all of its stakeholders. This committee is led by Chief Operating Officer.

Risk & Disbursement Committee

The Risk & Disbursement Committee assists the Board in its oversight of management’s responsibility to implement an effective global risk management framework reasonably designed to identify, assess and manage the Firm’s strategic, credit and investment, market, and operational risks. The Risk & Disbursement Committee’s responsibilities include approval of applicable primary risk policies and review of certain associated frameworks, analysis and reporting established by management. This committee is led by Chief Financial Officer.

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