Highlights Management Company Management Discussion Reports Profile & Analysis Corporate Governance Sub Contents 267 Commitment to Implement Good 386 Legal Matters and Important Issues Corporate Governance Involving the Bank, its Subsidiaries, 267 Reference for Implementation Members of Directors and/or 267 Corporate Governance Implementation Commissioners Roadmap 388 Disclosure of Administrative Sanctions by 268 Danamon’s Good Corporate Governance Financial Services Authority (OJK) Focus in 2015 388 Internal Fraud 270 Corporate Governance Policy, 388 Transparency of Financial and Non- Structure and Implementation Financial Performances 272 Danamon’s Corporate Governance 389 Share Options Implementation Report 389 Share Ownership Program for Employees 273 Shareholders and/or Management 274 General Meeting of Shareholders (GMS) 390 Share Buy Back and Bond Buy Back 281 The Board of Commissioners 390 Highest and Lowest Salaries Ratio 297 Committees Under The Board of 390 Conflict of Interest Transactions Commissioners 390 Bank Strategic Plan 330 The Board of Directors 392 Provision of Funds for Political 352 Committees Under the Board of Directors Activities 359 Relations and Affiliated Party Transactions 392 Company Information Access of the Board of Directors, Board of 393 Investor Relations Commissioners and Majority Shareholders 394 Public Affairs 360 Corporate Secretary 397 Customer Care Unit 364 Compliance Function 399 Consumer Service Quality 367 Implementation of Anti-Money Laundering 400 Corporate Culture Program (AML) And Combating Funding on Terrorism (CFT) Programs 400 Code of Ethics 368 Internal Audit Unit (IAU) 403 Whistleblowing System 372 Company Accountant/External Auditor 405 Good Corporate Governance Self- Assessment 374 Risk Management 407 GCG-Related Awards 377 Provision of Funds to Related Parties and Large Exposures 407 Statement of The Implementation of Good Corporate Governance Principles 377 Internal Control Systems 379 Social Responsibility and Sustainability 266 PTReport Bank Danamon Indonesia, Tbk. 2015 Annual Report Operational Review Corporate Governance Corporate Social Corporate Data Financial Responsibility Statements “Danamon is committed to proper implementation of and continuous improvements in good corporate governance by adhering to international standards and best industry practices. Proper GCG implementation has placed Danamon among its regional ASEAN peers, giving the Bank a competitive edge and opening access to market opportunities likely to emerge with free trade in the ASEAN Economic Community” COMMITMENT TO IMPLEMENT GOOD b. OJK Regulation No. 18/POJK.03/2014 dated CORPORATE GOVERNANCE November 18, 2014 and OJK Circular Letter on Applying Good Corporate Governance (GCG) best Integrated GCG for Financial Conglomerates; practices has enabled Danamon to weather a c. OJK Regulation No. 21/POJK.04/2015 dated challenging year with sound financial and non- November 16, 2015 following OJK Circular Letter financial performances. In order to maintain on the implementation of GCG Code for Public sustainable growth and to show a keen Companies; competitiveness, Danamon is committed to d. Principles of Corporate Governance of the continuously improving the way it implements Organization for Economic Co-Operation and GCG, in accordance with national and international Development (OECD); standards. e. ASEAN Corporate Governance Scorecard; f. Code of GCG in Indonesia and the Indonesian The purpose of implementing GCG with consistently Banking GCG issued by the National Committee high standards is to stimulate the Bank’s of Governance (NCG). performance, to foster investor confidence, to protect the interests of stakeholders, and to make a CORPORATE GOVERNANCE IMPLEMENTATION positive contribution to the social environment and ROADMAP national economy. The implementation of Danamon GCG has been sustainably and consistently conducted since REFERENCE FOR IMPLEMENTATION 2006. The roadmap below shows the on-going In implementing its GCG practices, Danamon refers improvement process by Danamon from 2013 until to all applicable laws and regulations, including: 2016: a. Bank Indonesia Regulation (PBI) No. 8/4/PBI/2006 dated January 30, 2006 on GCG Implementation for Commercial Banks as later amended through Bank Indonesia Regulation (PBI) 8/14/ PBI/2006 dated October 5, 2006, and through Bank Indonesia Circular Letter No. 15/15/DPNP dated 29 April 2013 on GCG Implementation for Commercial Banks; 2015 Annual Report PT Bank Danamon Indonesia, Tbk. 267 Highlights Management Company Management Discussion Reports Profile & Analysis 2013 2014 2015 2016 • Disclosure of the • Harmonized and enhanced the • Implemented • Enhancement of AGM Agenda and implementation of good corporate an integrated good corporate explanation. governance practices with governance and risk governance legislation primarily to meet the management through implementation the availability • Published AGM recommendations of the Financial through decisions one day Services Authority (OJK) as set of structures regulation of after AGM meeting. out in the Corporate Governance and integrated Roadmap Indonesia. infrastructure. the Financial • Disclosures on the Services Bank’s website of: • Harmonized and enhanced • Addition of Authority on Good Governance implementation of good corporate Independent Guidelines Policy, Articles of governance practice with the Commissioner on of Corporate Association, Privacy ASEAN CG Scorecard. the Nomination Governance and Remuneration Investment Policy, for Listed Committees. Related Party • Facilitated all Commissioners with Companies. Policy, Transactions refresher risk management course. with possiblility of • Established diversity • Enhancement Conflict of Interest • Divided Nomination and policy of the Board of with Shareholders Remuneration Committee into Commissioners and of the Work and other groups. two committees: the Nomination Board of Directors, Manual and Committee, and the Remuneration Nomination Policy Guidelines • Completion of the Committee. for the Board of for the Company’s website Commissioners and Remuneration Board of Directors. (bilingual). • Referring to the applicable Policy Performance Committee and regulations, adjusted the Assessment for Nomination • Completing structure of the Audit Committee, the Board of Committee. management profile Risk Monitoring Committee, Commissioners and minutes of the Remuneration Committee, and and Board of • Enhancement to AGM. Nomination Committee. Directors, Board the guidelines of Commissioners • Disclosure of the • Enhanced and updated Guidelines and supporting Tools Performance policies in the remuneration policy and Rules of the Boards of Assessment, Anti for Directors and Commissioners and Directors, Gratuity Policy implementation Commissioners in Audit Committee, Risk Monitoring (Acceptance and of good the Annual Report. Committee, Nomination Gifts). corporate Committee, Remuneration governance. Committee, and Corporate • Dividend payments Governance Committee. within 30 days. • Disclosure of the candidate profiles for members of the Board of Commissioners. DANAMON’S GOOD CORPORATE GOVERNANCE FOCUS IN 2015 In 2015, Danamon was focused on enhancing implementation of Good Corporate Governance such that the Bank may be more competitive as well as placing ethics and integrity at the forefront of Company management. In 2015, the Bank’s Corporate Governance focus included: Implementation of integrated Corporate Governance Implementation of integrated corporate governance and integrated risk management at Danamon has been achieved through the availability of structures and integrated infrastructure including the establishment of Integrated Corporate Governance Policy and Integrated Risk Management Policy, the adjustment of the role and responsibilities of the Board of Commissioners and the Board of Directors, as well as adjustments to the roles and responsibilities of the working units (Internal Audit, Compliance and Risk Management). 268 PT Bank Danamon Indonesia, Tbk. 2015 Annual Report Operational Review Corporate Governance Corporate Social Corporate Data Financial Responsibility Statements Corporate Governance Guidelines, OJK and ASEAN CG Improvement in Consumer Protection Scorecard In its efforts to improve on consumer protection, In order to continuously improve the implementation Danamon has effected enhancement on policies of good governance, and to align its standards with such as the policies regarding product and service those of the Financial Services Authority (OJK) information, handling and settlement of customer Regulation and the ASEAN CG Scorecard, Danamon complaints, and the implementation of public has adjusted its GCG policies concerning the education as part of improved services to consumers Nomination Policy of the Board of Commissioners and and the general public. the Board of Directors, the Gift Policy (Anti Gratuities), the Performance Assessment Policy of the Board of Strategic Initiatives of the Bank Commissioners and of the Board of Directors, and the Danamon has reviewed the strategic initiatives Diversity Policy of the Board of Commissioners and of necessary to improve its performance and the Board of Directors. Furthermore, improvements productivity, which will eventually lead the Bank to to the implementation of information disclosure has a higher level. In so doing, the Bank has determined also been done by the Bank through the disclosure a number of strategic initiatives to be implemented of candidate profiles of members