We will continue to balance our commercial objectives with the expectations of a broad range of stakeholders, thus ensuring a sustainable business. After the merger of the Company with PT BAT Indonesia Tbk on 1st January 2010, we aligned the Company’s Good Corporate Governance practices with the BAT Group’s principles and standards. For example, we started communication and implementation of the BAT Group’s Standards of Business Conduct (SOBC) within the organisation.
Furthermore, committees were also formed based on the directions of the Board of Directors and the Board of Commissioners. The Good Corporate Governance section discusses this in more detail.
The structure of the board within the company includes:
- Board of Commissioners
- Board of Director
- Audit Committee
- Corporate Social Responsibility Committee
- Corporate Secretary
Risk Management and Internal Control
The Board of Directors is responsible for determining the nature and extent of the significant risks that the Company is faced in achieving its strategic objectives and for implementing sound risk management and internal control systems. With the support of the Audit Committee, it carries out a review of the effectiveness of the Company’s risk management and internal control systems, covering all material controls including financial, operational and compliance controls.
The Company aligned the risk management and internal control system to that used by the BAT Group. In 2010, we have put in place an on-going process for identifying, evaluating, monitoring and managing significant risks faced by the Company and this process includes reviewing and updating the system of internal controls to take into consideration changes in the regulatory and business environment. The main features of the risk management processes and system of internal controls are described below.
Risk management is now fully embedded in the Company’s management system and is every employee’s responsibility. A risk register is used to identify, assess and monitor the key risks (both financial and non financial) faced by the business. Mitigation plans are
required to be in place to manage the risks identified and 68 PT. Bentoel Internasional Investama Tbk. the risk register and mitigation plans are reviewed and updated on a regular basis. The risk register is reviewed monthly by the Internal Control Committee (ICC) and quarterly by the Audit Committee. Business continuity plans (or contingency plans) were developed during the year which included the Crisis Management Plans and the IT Disaster Recovery Plans.
The process will continue to cover other key risk areas. We are also required to complete a checklist of key controls called Control Navigator, which is aimed at enabling us to self-assess our internal control environment and assists us in identifying any controls which will support the implementation of action plans to address control weaknesses. The Control Navigator check list is reviewed monthly by the Internal Control Committee (ICC) and quarterly by the Audit Committee to ensure that it remains relevant to the business and covers all applicable key controls.
The internal audit function provides advice and guidance on best practice in risk management and control systems. It is also responsible for carrying out audit checks on
business processes which focuses in particular on higher risk areas. The Company Internal Audit Strategies are based on the following:
- Control through independent reviews and reports on the effectiveness and efficiency of
- the internal audit system using world-class audit techniques and methodologies.
- Governance by providing support in accordance with legislation requirements to maintain and enhance the Company’s reputation.
- Risk through providing support, via global risk policies, to ensure the successful achievement of the Company’s strategy and the initiatives of Management.
- Talent through various methods of recruitment and maintaining high potential employees from various functional backgrounds, and supporting their development to become future leaders of the Company.