How Long Is The Term Of Office Of The Board Of Directors And Board Of Commissioners? Here Are The Rules Of The PT Law

Illustration of the Board of Directors and Board of Commissioners (Freepic)

The Board of Directors and Board of Commissioners are the highest positions in a Limited Company (PT), both state-owned and private companies. Sometimes the person who occupies this position also plays the role of the company owner. As an important position holder, there are many questions about how long the term of office of the Board of Directors and Board of Commissioners of PT?

By occupying the highest position, the Board of Directors and Board of Commissioners get a fantastic amount of salary or income. However, their responsibilities and duties are also the same. So how long is the term of office of the Board of Directors and Board of Commissioners and can it be reappointed?

A Board of Directors and Board of Commissioners both act as administrators of PT. The Board of Directors has the task of carrying out the company's daily activities, including the signing of documents and correspondence related to the company's interests. Meanwhile, the Commissioner carries out the task of supervising and providing recommendations, as well as advice and input to the Board of Directors regarding the company's development and operations.

Regarding the length of their term of office, there is not a single article in the PT Law that strictly regulates the term of office of the Board of Directors and Board of Commissioners. In Law No. 40 of 2007 concerning Limited Exchange, the term of office of the Board of Directors is not clearly regulated when the period will be.

However, Article 94 paragraph (3) states that the requirements for appointment of a board of directors must have a certain period of time, not be valid for life, and are listed in the basic budget of PT during its establishment. In general, the term of office of a Board of Directors and Board of Commissioners is 3 or 5 years.

If the term of office has expired, then a Board of Directors cannot automatically continue their positions. If they want to take office again, then a re-vocation is needed through the General Meeting of Shareholders (GMS). Meanwhile, the policy regarding the replacement and dismissal of the Board of Directors is based on the decision of the GMS contained in Article 94 paragraph of the Law of PT.

Someone who meets the requirements to become a Board of Directors and Board of Commissioners, can be appointed to the position. The process of appointing the Board of Directors and Board of Commissioners is carried out through the GMS, and carried out by the founder of the company in accordance with Article 8 Paragraph 2 of Law No. 40 of 2007.

After undergoing the appointment, the Board of Directors and Board of Commissioners are required to notify the Minister of Law and Human Rights (Menkumham) no later than 30 days from the date of the GMS decision regarding the appointment of the Board of Directors and Board of Commissioners, as regulated in Article 94 paragraph (7) of the PT Law.

The Board of Directors and Board of Commissioners, who have completed their term of office, can be reappointed as stipulated in Article 94 paragraph (3) of the PT Law. The procedure for re-imposing is intended so that members of the Board of Directors who have retired their term of office do not automatically continue their original positions.

If a Board of Directors and Board of Commissioners have been dismissed because their term of office expires within 3 or 5 years, then from the date of revocation, the person concerned cannot act for and on behalf of the company. So if you want to continue your position, then members of the Board of Directors and the Board of Commissioners must go through a process of revocation based on the results of the GMS' decision.

Such is the review of the term of office of the Board of Directors and Board of Commissioners. In the PT Law, it is not clear how long the two important positions will last. However, in the Law it is prohibited to appoint a Board of Directors and Board of Commissioners for a life sentence.

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