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Investors
Commitment
The Company fully committed to becoming a good business entity, performing in consistency with the laws, regulations, and code of ethics, as well as implementing an effective management system. In its business conduct, the Company always upholds the GCG principles of transparency, accountability, responsibility, independence and fairness as part of its efforts to implement best governance practices to create added value for shareholders and other stakeholders.
Company GCG Principles
- Transparency
The Company consistently provides clear, accurate, complete, and timely information to the shareholders and other stakeholders, in the form of financial statements, investor information, and other relevant materials or disclosures. These are available on the corporate website, www.matahari.com /corporate/, and disclosed in the Company’s annual reports. - Accountability
The Management accepts its responsibility to the shareholders and other stakeholders regarding the implementation of the Company’s strategies and the achievement of its objectives and is ready to be accountable for all its actions and decisions to the Board of Commissioners, the shareholders, and others stakeholders. The Board of Commissioners is responsible for the effective supervision of Management and is accountable to the shareholders. - Responsibility
The Company complies with the relevant laws and regulations and respects the rights of all the stakeholders. It also fulfills its responsibility to protect and promote the sustainability of the environment, public welfare and healthy living.
- Independence
The Company manages the business in a professional manner, without any conflict of interest or influence or pressure from any party that is in contrary to the laws and regulations. This is demonstrated in the Company’s objective decision making, which is free of any intervention from third parties.
- Fairness
The Company treats all the shareholders equitably, regardless of whether they are majority or minority shareholders, and guarantees the rights of the shareholders and stakeholders. Therefore, the Company always provides equal opportunities to all shareholders to make decisions and engage with the company in AGMS, and treats all stakeholders fairly by providing equal opportunities related to employment, training, promotion, access to information, and so forth.
Implementation of GCG principle
Implementation of GCG principle
Internal Monitoring and Control
Code of Conduct
The Company’s Code of Conduct serves as a reference for everyone in the Company by establishing the standards of behaviour they are expected to display at all times to ensure that the GCG principles of transparency, accountability, responsibility, independence and fairness are upheld in every aspect of the business:
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- The key objectives of the Code of Conduct are:
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- Integrating the Company’s values into employees’ ethical business practices in line with the Company’s vision and mission; and
- Clearly describing the Company’s values and the acceptable conduct that must be followed by all employees in carrying out their day-to-day duties and responsibilities.
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- Providing basic guidelines for all levels in the Company with regard to the interaction between employers and employees, shareholders, suppliers, Government, and other stakeholders.
The Code is reviewed periodically to ensure that it remains consistent with these objectives.
Content of the Code of Conduct for Business Partners
The Code provides guidance for employees on their interactions with colleagues, employees, shareholders, suppliers, and regulatory officials in the following areas:
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- Improving accountability, transparency, and compliance with existing laws and regulations;
- Implementing tasks with the highest degree of professionalism and integrity;
- Avoiding giving or accepting inappropriate corporate gifts, bribery and kickbacks in any form and for any reason, for example: cash and its equivalent, membership/entertainment, unusual discounts, unusual (in terms of frequency and/or value) meals or banquets, fund support for tours or vacations, hampers, bouquets;
- Avoiding activities which may give rise to a conflict of interest with their work in any form or situation, for example: an employee has a financial interest with vendors, contractors or brokers who have business relations with the Company; an employee operates and manages an enterprise that is related to the Company; an employee uses the Company’s asset for personal benefit; and
- Protecting the Company’s proprietary information, both during and after an employee’s term of employment with the Company.
Internal Audit
The Internal Audit of the Company functions to provide objective assurance and independent as well as objective consultation that aims to strengthen Internal Control and other specific operational issues. The Internal Audit was established pursuant to a Decree of the Board of Commissioners dated 1 May 2013.
Internal Audit Charter
The Company complies with POJK No. 56/ POJK.04/2015 on the Establishment and Guidelines for the Internal Audit Charter dated 22 June 2020 by having an Internal Audit Charter that specifies the responsibilities of the Internal Audit. In carrying out its duties and responsibilities, the Internal Audit refers to the Internal Audit Charter, which covers the following:
- The organisational structure of the Internal Audit and its position within the Company;
- The qualifications, duties, responsibilities and authority of the auditors;
- The procedures for their appointment, replacement and termination;
- The plans, guidelines and reporting procedures of the IA;
- The independence and objectivity of the IA; and
- The Code of Ethics for the IA.
The Charter is periodically reviewed and updated.
Structure and Position of the Internal Audit
Structurally, the Internal Audit is independent of all the Company’s business units and reports directly to the President Director, as shown in the corporate organisation chart in the Company Profile chapter of this Report. The Internal Audit Unit is led by the Head of RM & IA, who is appointed and dismissed by the President Director, pursuant to a Circular Letter regarding the Appointment of the Head of RM & IA, upon approval of the BoC.
Pursuant to the BoC Circular Letter dated 1 May 2013, Maju Tarigan serves as the Head of the Internal Audit of the Company and reports directly to the President Director of the Company. His appointment was conducted following the merging of the Audit and Social Affairs Division with the Risk Management Division.
Duties and Responsibilities
As stated in the Internal Audit Charter, the Internal Audit Unit carries out the following duties and responsibilities:
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- Prepare and execute the annual Internal Audit Plan;
- Evaluate the implementation of the Company’s internal control and risk management systems, recommending areas for improvement and monitoring the effectiveness of the recommended follow-up actions;
- Evaluate the efficiency and effectiveness of the Company’s performance in key strategic areas, including finance, accounting, operations, human resources, marketing and information technology;
- Conduct special audits and/or investigations as required;
- Prepare reports on the audit findings for the President Director, the Board of Commissioners and the Audit Committee;
- Provide objective information as well as value-added recommendations for the improvement of the activities under review at all management levels;
- Monitor, analyse, and report on the implementation of followup actions on the recommended improvements;
- Cooperate with the Audit Committee;
- Design programs for quality assessment activities conducted by the Internal Audit Unit.
Whistleblowing System
As referred to in the Company Code of Conduct, the Company provides the official mechanism for a whistleblower to report misconduct. This mechanism, ‘Suara Matahari’, is part of our internal control system and plays a critical role in our commitment to fair working conditions.
Suara Matahari offers a range of confidential channels through which employees and other stakeholders can report if they genuinely suspect that a violation of the Code of Conduct or other misconduct has taken place, remaining anonymous if they wish. The Company’s whistleblowing policy, including the procedures and contact numbers for reporting, has been disseminated to all our employees, management, suppliers and business partners.
Suara Matahari has some features that support its accessibility, trustworthiness and effectiveness:
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- Numerous hotline channels, including toll-free phone lines, Short Message Services/SMS, website, email and mailbox;
- Promotion of anti-fraud awareness and the whistleblowing program to all management, employees and suppliers;
- Experienced contact centre operators who handle incoming reports;
- Forensic investigation experts follow up the incoming reports and present the issues to management;
- Recommendations for improvements.
Suara Matahari is under the management of an independent third-party administrator, Deloitte, to ensure objectivity and effectiveness. The setting ensures that informants have complete anonymity and protection. The Risk Management and Internal Audit Division monitors the incoming reports' status and consolidates them for reporting to the Board of Directors and the Risk Management Committee.
Suspected misconduct or violations of the Code of Conduct can be reported through any of the following channels:
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- Hotline: Informants can contact Suara Matahari on +62 21 2350 7056; they have the right to remain anonymous if they choose.
- SMS: Reports can be sent by SMS to +62 81586709196.
- Email: Reports can be sent via email to suaramatahari@tipoffs.info. The informant’s email address will not be disclosed without permission.
- Website: Reports can be sent via the Suara Matahari Website at http://suaramatahari.tipoffs.info. Reports should provide as much information as possible about the suspected violation.
- Mail: Reports can be sent via regular mail to Suara Matahari PO Box 3670/JKP 10036, Central Jakarta.
Reports submitted in writing must be accompanied by a disclosure cover sheet, which can be downloaded from the Suara Matahari website. Informants should provide at least the following information to ensure that the appropriate actions can be taken:
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- Name(s) of those involved;
- Name of a witness (if available);
- Information about the incident, including date, time and location;
- Evidence;
- The related nominal or assets; and
- The frequency of the incident(s).
The Suara Matahari operator receives the whistleblowing report through one of the above channels and assigns a unique, anonymous reference number to the informant, which he or she can use when requesting information about the progress of the case.
The report is sent to a Deloitte analyst for assessment. The results are returned to the Company’s representative within one working day.
The Risk Management and Internal Audit Division determine further investigation and clarification actions. Later on, this division will present the results to the Risk Management Committee to decide on the penalties or sanctions on the suspects and determine any internal control improvements or other changes the Company needs to make.
The Company guarantees to protect informants who report in good faith from any retaliation by the allegation's subject. Informants have the following options regarding the disclosure of their identity:
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- Full disclosure: the informant is willing to disclose his/her identity to Deloitte and the Company.
- Partial anonymity: the informant is willing to disclose his/her identity only to Deloitte. In this case, Deloitte will keep the informant’s identity confidential from the Company.
- Full anonymity: the informant is unwilling to disclose his/her identity to either Deloitte or the Company. The Company guarantees to protect informants who report in good faith from any retaliation by the allegation's subject
Throughout 2022, 136 cases were reported, in which 94 cases were received via Suara Matahari and 42 cases through other reporting channels. The cases involved internal and external parties, which includes alleged breaches on code of conduct, conflict of interests, stealing of merchandises, manipulation of sale transactions (discounts are not matched with approved promotion), and sexual harassment. All cases have been investigated, with 75 proven cases, 35 unproven cases, and 26 undergoing cases during the publication of this Annual Report.
Risk Management
We are committed to identifying and managing the risks that inevitably arise during the normal course of business in order to minimise any potential negative impacts on the achievement of the Company’s strategic business objectives, reputation, and business continuity and sustainability. Matahari’s integrated, company-wide approach to risk management is led by the Risk Management Committee, the Audit Committee, the Internal Audit and the Company’s External Auditors, which work together to identify, evaluate and mitigate risks by reviewing risk parameters in various areas, particularly critical systems, areas affecting costing and/or profitability, fraud, and abuse of authority.
Matahari’s Enterprise Risk Management (ERM) framework describes the Company’s risk management objectives, strategy, governance, organization, methodology, monitoring and reporting processes. This enables us to identify and address risks proactively in strategic areas in every part of the organization. While the Board of Directors, the Board of Management and the relevant committees and management functions have overall accountability for risk management, with the ERM we seek to drive ownership of risks at every level of the organization by engaging all employees, business partners and other stakeholders in identifying, monitoring and managing risks. The ERM framework covers:
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- Risk identification, measurement, monitoring and control, including awareness;
- Risk management infrastructure, including organizational structure, governance systems, data collection, analysis methods, policies and procedures and reporting; and
- Corporate culture, including training, performance measurement, value development and rewards.
The Company has developed a road map for implementing risk management processes across the organisation via several functions in Loss Prevention, Security and Safety, to protect corporate assets.
At the same time, the Risk Control Awareness and Assessment Program was implemented continuously to ensure that all stakeholders (including business partners) understand and support the Company-wide risk management approach. From this we have developed a risk treatment, risk tolerance and risk control matrix. Regular Internal Control Newsletters/Bulletins and Compliance updates, which contain information on key risks, best practices in risk mitigation and new regulations, were distributed to all business process owners several times a year. As part of our overall approach to risk management, we maintain a zero tolerance policy towards integrity issues.
In 2022, the key risks faced by the Company and its mitigation efforts are summarised below:
Information Access
The Company provides public access to the Company’s information and data through reports that the Company produces for capital market regulators and information for shareholders disseminated through the IDX website and the mass media, as well as other information published on the Company’s website or present www. matahari.com/corporate/, available in Indonesian and English. Matahari also provides information about the Company, its stores and products, as well as offers and promotions through the following social media platforms, such as Facebook (Matahari), Instagram (@matahari and @ storyofmatahari), TikTok (tiktokmatahari). In 2022, the Company issued 28 press releases to various media.
External Audit
Audit on the Company’s Consolidated Financial Statements for the year ended December 31, 2021, which include the statements of financial position, statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows, prepared in accordance with Indonesian Financial Accounting Standards.
Public Accounting Firm
Tanudiredja, Wibisana, Rintis & Rekan
(Anggota firma dari/member of PricewaterhouseCoopers International Limited)
WTC 3 | Jl. Jend. Sudirman Kav. 29-31 | Jakarta 12920 - Indonesia
T: (62-21) 50992901/31192901
F: (62-21) 52905555/52905050