Indonesia Scraps Bonuses for State-Owned Enterprise Commissioners​ in ⁣Sweeping​ Governance⁣ Reform

Indonesia’s government has moved decisively to strengthen the governance and integrity of‌ its state-owned enterprises (SOEs), eliminating tantiem – profit-based bonuses – for​ all SOE commissioners.The decision, confirmed by ‍the presidential Palace, is not a punitive measure, but a fundamental structural reform aimed at aligning SOE leadership with‍ principles of public service and performance accountability.

A shift ⁢in‌ Focus: From Personal ‌Gain to National interest

Minister of State Secretary Prasetyo Hadi articulated the ‍government’s rationale​ on Tuesday, August 5, 2025, framing the policy as central to President Prabowo​ Subianto’s⁣ broader vision for revitalizing Indonesia’s SOEs.⁢ These enterprises are widely recognized ‌as the backbone of the national economy, and thier effective​ management is crucial ‍for sustained economic growth.

“Our main goal is to fundamentally reform the ‌state-owned enterprises. That starts with improving personnel, management,‌ and financial ‌systems,” Prasetyo explained to reporters at the Presidential Palace.The ​move comes in response to growing public scrutiny of tantiem payments, notably in instances where company performance ‍did not justify such incentives. The government is sending a clear message: commissioner roles within SOEs are professional responsibilities,demanding dedication to systemic enhancement rather than anticipation of⁢ personal financial ‌rewards.

“Those assigned to‌ SOEs, especially commissioners,​ are​ expected to help fix the system, not to anticipate tantiem,” Prasetyo emphasized. He further⁣ stated that the elimination of ⁢these financial incentives reinforces the principle that SOE positions are mandates of service, not opportunities for enrichment.

Enhancing Transparency and Accountability

This reform is a key component of a larger government initiative to promote transparency,⁢ efficiency, and accountability in SOE management. Maintaining public trust is paramount, and the government believes this trust can only be sustained through leadership driven by integrity and a commitment to⁣ national interests.

The decision ‍reflects a growing recognition that SOE leadership should prioritize the long-term health of ​the​ enterprises and the Indonesian economy, rather than short-term personal gains. This aligns with international best‍ practices in‍ corporate governance and⁤ signals a commitment to attracting and retaining commissioners ​based on their expertise and dedication to public service.

Formal Directive and​ Implementation Details

The policy change is formalized through⁢ a directive issued by the State Investment Management Agency (BPI Danantara). Letter No. S-063/DI-BP/VII/2025, signed by Danantara executive Chairman Rosan P. Roeslani on July 30, 2025, explicitly prohibits‌ all SOE and SOE subsidiary commissioners from ⁤receiving tantiem, performance incentives, or any other forms of compensation directly linked to company performance.The ⁣directive specifically cites the need to ​uphold international standards of corporate⁤ governance. “To maintain the interests of‍ soes⁤ and all stakeholders,commissioners at SOEs⁣ and their subsidiaries are not permitted to receive tantiem,performance ⁢incentives,or other forms of compensation linked⁢ to company performance,” the letter states.

This represents a significant shift in⁣ how​ SOE leadership is compensated⁢ and monitored, moving away from an entitlement-based system towards one focused on demonstrable performance and accountability. The government‌ anticipates this reform ⁣will foster a​ more professional and ​ethically grounded approach ⁤to SOE management, ultimately benefiting the indonesian economy and its citizens.