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Figure 8. Principal Laws and Regulations Impacting on Corporate Governance (cont’d)

Law/Regulation	Applicability	Comments
Ministry of Manpower and Transmigration Decree No. 40 of 2012 concerning Certain Positions that are Prohibited for Foreign Workers (“MMT Reg. 40/2012”)	Company with foreign workers	List of positions in a company that are restricted for foreign workers.
ndonesian Code of Good Corporate Governance 2006 (“GCG Code”)	All company practices	Code of conduct and business ethics, company organs, shareholders, stakeholders, good corporate governance principles, implementation of the good corporate governance.
All related regulations in OJK Capital Market	Capital market activities	Capital market supervisory board (OJK), stock exchange, clearing and guarantee corporation, central securities depository, investment fund, securities company, securities company representatives, and investment advisors, capital market supporting institutions and professionals, issuers and public companies, sanctions, public documents and reporting to OJK.

Finally, although though these regulations are only necessary for listed firms, all Indonesian businesses are encouraged to follow the corporate governance standards outlined in the CG Regulations.

Corporate governance frameworks typically comprise elements of legislation, regulation, self-regulatory arrangements, voluntary commitments and business practices that are the result of country specific circumstances, history and tradition. The desirable mix between legislation, regulation, self-regulation, voluntary standards, etc. in this area will vary from country to country. As new experiences accrue and business circumstances change, the content and structure of this framework needs to be adjusted.³ Companies will need to carefully monitor such adjustments on a regular basis and update their governance systems accordingly.

The CG Regulations, which were established by the OJK, are based on widely acknowledged corporate governance standards, including the OECD Principles.
The three categories of rules that make up the CG Regulations are as follows:
1. Requirements of law The regulations that make reference to mandatory legal requirements do so because they replace or otherwise modify legal requirements rather than because they are a part of the CG Regulations. The phrases "must," "is obligated to," "cannot," etc. are legal obligations that are recognized in the CG Regulations.
2. Comply with or describe the rules: These guidelines must be followed. Companies that are publicly traded are required to disclose and justify any deviations from these norms in the declaration of conformity with corporate governance principles. Compliance or explanation requirements only permit such deviations when they are justified.
The word "must" is used in the text to identify the compliance or explain requirements of the CG Regulations.

3. 
   Recommendations: By their very nature, these regulations are suggestions. There is no need to disclose or provide an explanation for breaking these guidelines. The CG Regulations employ words like "should" and "can" when referring to these rules.
   

In Indonesia today, there are far too many institutions to mention all of them. Together, they make up the institutional framework for corporate governance. The following organizations have at least one primary function that focuses on corporate governance.