In a landmark governance reform, Indonesia’s state investment body Danantara has officially removed performance-based bonuses (tantiem) for commissioners of state-owned enterprises (SOEs). The move, backed by the State Secretary, signals a shift toward accountability, efficiency, and public-oriented oversight in the management of national assets.
Key Facts & Background
- Policy Origin: Danantara (Badan Pengelola Investasi Daya Anagata Nusantara) issued Surat Edaran S-063/DI-BP/VII/2025, effective for the 2025 fiscal year.
- Key Change: SOE commissioners will no longer receive tantiem, or performance-based bonuses, regardless of company profits.
- Rationale: Align with global best practices in corporate governance, particularly OECD guidelines that discourage variable compensation for oversight roles.
- Commissioners will still receive a fixed monthly salary deemed appropriate to their responsibilities.
- State Secretary Prasetyo Hadi emphasized the reform’s intent to strengthen SOE governance, improve financial discipline, and eliminate incentive-driven conflicts of interest.
- SOEs are viewed as economic pillars, requiring commissioners to focus on structural improvements—not personal gain.
- Danantara also revised incentive structures for SOE directors, ensuring bonuses are tied strictly to real operational performance, excluding one-off gains or accounting maneuvers.
Strategic Implications
The removal of tantiem for SOE commissioners marks a paradigm shift in Indonesia’s public sector governance. By eliminating performance-based bonuses, the government aims to reinforce the independence and integrity of oversight roles, ensuring commissioners prioritize long-term institutional health over short-term financial rewards.
This reform also reflects a broader effort to professionalize SOE management, reduce fiscal leakage, and build public trust in state-run enterprises. With over 800 SOEs in Indonesia, the cumulative impact of tantiem removal could redirect billions toward strategic investment, service improvement, or debt reduction.
For commissioners, the change redefines their mandate—from passive board members to active reform agents. It also sets a precedent for merit-based public service, where compensation aligns with responsibility rather than profitability.
Internationally, the move positions Indonesia closer to OECD-aligned governance standards, potentially enhancing its credibility among foreign investors and multilateral institutions. Domestically, it sends a strong signal that efficiency and transparency are now central to how the state manages its economic backbone.