Guidelines on Appointment of Directors and Commissioners to Subsidiaries of State-Owned Enterprises

The Minister for State-Owned Enterprises has issued RegulationNo. PER-01/MBU/2006(the “Regulation”) setting out guidelines for the appointment of directors and commissioners to subsidiaries of stateowned enterprises (BUMN). The underlying premise of the Regulation is to ensure that the performance of any BUMN subsidiary positively impacts upon the performance of the parent rather than the traditional tendency of being a burden. It is expected that the application of these guidelines will allow for optimal performance to be maintained at the subsidiary as only professional management will be appointed through transparent appointment mechanisms.