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The legal protection weakness of the directors board from the risk of losses due to business decisions

Author

Listed:
  • Kusmono Kusmono

    (Faculty of Law, Brawijaya University, Veteran Street no. 1 Post code: 65125, Malang City, Indonesia)

  • Sihabudin Sihabudin

    (Faculty of Law, Brawijaya University, Veteran Street no. 1 Post code: 65125, Malang City, Indonesia)

  • Iwan Permadi

    (Faculty of Law, Brawijaya University, Veteran Street no. 1 Post code: 65125, Malang City, Indonesia)

  • Heru Ratno Hadi

    (Faculty of Law, Brawijaya University, Veteran Street no. 1 Post code: 65125, Malang City, Indonesia)

Abstract

Business is a risk. There is no guarantee the business is run By the board of Directors who will always bring profit. One day profit, no profit, and another time can lose. When business decisions are taken by the board of Directors losses especially in significant amounts can be ascertained will happen nervousness on the board of Directors of the Company. State-Owned Enterprises established for business purposes in the full operation of risk. Law No. 19 of 2003 concerning State-Owned Enterprises does not regulate the protection of the Board of Directors of the Company, meanwhile, Law No. 40 of 2007 on Limited Liability Companies regulation of the protection of the Board of Directors of its implementation gives rise to multi-interpretation. Business decisions made by the Board of Directors of the Company in accordance with the principles of Business Judgement Rule are business risk, should get legal protection. The purpose of this research is to find out the weaknesses of this legal protection. This research includes normative legal research with a statutory approach with The analysis technique in this research is investigation strategy. The results show that there is no legal certainty regarding business decisions taken by Directors who experience losses in business transactions so that the Government / DPR must amend the BUMN Law by adding articles on the legal protection of the Directors of Persero. Key Words: Business, Directors, Company, Regulation, Legal Protection

Suggested Citation

  • Kusmono Kusmono & Sihabudin Sihabudin & Iwan Permadi & Heru Ratno Hadi, 2021. "The legal protection weakness of the directors board from the risk of losses due to business decisions," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(2), pages 306-310, March.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:2:p:306-310
    DOI: 10.20525/ijrbs.v10i2.1038
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