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.