Review Paper
Year: 2022 | Month: October | Volume: 9 | Issue: 10 | Pages: 180-185
DOI: https://doi.org/10.52403/ijrr.20221020
Inconsistency Between the Function and Position of the Board of Directors Under the Limited Liability Company Law and the Function and Position of the Board of Directors in Charge of Compliance Under the Circular Letter of the Financial Services Authority for Rural Banks in Indonesia
Henry Aspan1, Agus Adhari1, Dian Yulis Wulandari1
1Universitas Pembangunan Panca Budi, Medan, North Sumatera, Indonesia
Corresponding Author: Henry Aspan
ABSTRACT
Rural Banks (RB) have corporate organs consisting of the General Meeting of Shareholders, the Board of Directors, and the Board of Commissioners. The appointment of the Board of Directors and Commissioners is carried out by the General Meeting of Shareholders which is made in writing. The compliance function is a series of preventive actions or steps to ensure that the policies, provisions, systems and procedures, as well as the business activities carried out by RBs are in accordance with the regulations of the Financial Services Authority and other laws and regulations. In a RB there are members of the Board of Directors who take care of compliance issues. Furthermore, there will be a conflict of interest if the provisions governing the position of the Compliance Director are found to be incompatible. This discrepancy can be overcome if RBs apply the principle of Lex Superior Derogat Legi Inferiori (high rules beat lower rules). The discrepancy may also be subject to a material review, particularly on the Circular Letter issued by the Financial Services Authority No. 6/SEOJK03/2016, as well as the existence of an internal regulation for RBs that re-regulates the authority of the Board of Directors.
Keywords: Board of Directors, Function and Position, Financial Services Authority, Rural Bank
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