Indonesia ups trade potential with focus on corporate governance

Speaking to Executive Update in Jakarta, Kiroyan Partners MD Noke Kiroyan says numerous Indonesian organisations have scaled up efforts to address “ethics or the lack of them” since the Asian financial crisis in the late 1990s.

”A lot of what led to the crisis was lack of good governance.”

Kiroyan is an advisory board member for NZTE’s Southeast Asia Beachheads programme. He is also on the board of Indonesia’s National Committee on Governance, national body similar to the NZ Institute of Directors.
His strategic consulting firm has been specialising in reputation management and stakeholder relations for the past seven years.

Kiroyan says Indonesia is making headway in its attempts to stamp out corruption and poor corporate governance practices, albeit from low base and with much room for improvement.

Contrary to commonly-held perceptions among many overseas firms who are not actively engaged in the country, Indonesian public and private sector organisations now have much better understanding of best practice corporate governance.

Kiroyan says the change is being driven by consumer demand for more fair practices.

It is backed by the creation of organisations such as Indonesia’s Corruption Eradication Committee (widely referred to as the KPK) and the Indonesian Securities Exchange Commission which holds public companies to account.

NZ’s Ambassador to Indonesia and ASEAN David Taylor says he draws hope for the future from the younger generation of business leaders, many of whom have gained business degrees offshore.

“They have seen you can do good business without being corrupt.”

Taylor is currently leading NZ trade delegation to Indonesia investigating opportunities to strengthen trade relationships between the two countries.

Organised by Export NZ, the ASEAN NZ Combined Business Council, and the Employers & Manufacturers Association (EMA), the mission is showcasing New Zealand’s expertise in wide range of sectors including education, aviation, food and beverage, and banking.

While to date many New Zealand businesses have focussed on opportunities in the capital city of Jakarta, the mission is also talking with potential business partners in the second-tier economies of Bandung, Surabaya and Bali.

Transparency International’s 2012 Corruption Perceptions Index, which measures perceived levels of public sector corruption, ranked Indonesia 118th equal alongside the Dominican Republic, Ecuador and Egypt.

New Zealand ranked first equal with Denmark and Finland.

See the next issue of The Director in the July issue of Management magazine for more on ethical governance in Indonesia and the wider Asian region.

By Management magazine contributing editor Ruth Le Pla who is in Indonesia on an Asia New Zealand Foundation grant.

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