Finding HR Management Challenging

When public trust in the banking industry waned quite a few years ago banking practitioners took note. They realized that they had to act in a reliable and professional manner and stay away from practices that could further erode public trust.

Learning from this, the central bank (Bank Indonesia), introduced various measures to ensure that banks select people who were capable of maintaining public trust. To this end, BI requires banks to ensure that their managing executives meet certain requirements, such as the stipulation that bank executives must possess a risk management certificate, pass screening and have compliance and risk management clearance.

It is in this context that Heru Budiargo, executive director of compliance and human resources at PT Bank Niaga, considers the application of Good Corporate Governance (GCG) important in the banking industry. For its part, Bank Niaga has long applied this principle to ensure that the bank is well managed by its executives.

"GCG has been applied for a long time at Bank Niaga," he said.

Many banks collapsed when the economic crisis hit the banking sector in late 1997. Bank Niaga was one of the few banks free of moral hazards, such as exceeding the maximum ceiling on loans (BPMK), violating banking regulations, extending loans to affiliated businesses, etc.

"One can surmise that the aspects of prudence and professionalism have long been applied at Bank Niaga," he said.

Ultimately, however, Bank Niaga could not escape the problems facing the banking sector. This bitter reality happened because its business portfolio was focused on corporate loans, which indeed entail a high risk.

Sustainable application of GCG has produced a significant result. Owing to efforts by the management of the bank, which is deeply concerned with education and training, improvement in competence and professional expertise and the application of GCG in keeping with international standards, Bank Niaga has received a rating level of 6+ from independent rating institution Standard & Poor's.

In addition, Bank Niaga was also presented an award by the Institute for Corporate Governance Indonesia for its successful application of GCG. "This shows that there is no doubt about the application of GCG at Bank Niaga and also in connection with its human resources," said Heru, who was born in Tuban, East Java.

To ensure that the application of GCG is in accordance with what has been outlined, the first thing to do, he said, is to reach an agreement. "GCG is not inwardly oriented; it is outwardly oriented," he stressed. As a result, the goal of the application of GCG must refer to competition.

He added, "GCG does not mean conformity, but it is well-directed and systematic steps that have been taken to make Bank Niaga more competitive and more sustainable in the market," he said. Therefore, GCG, he said, is related to the scope of strategy, product management and services, human resources management, risk management and internal control.

After an agreement has been reached, it is time to build governance structure regarding the role and tasks of the supervisory board, the board of directors and executive commissioners. Transparency must also be fostered by regulating the mechanism on inter-institutional relationships internally and externally."

At the end of the day, there will emerge a necessity to have a culture related to transparency, independence and accountability, which will develop with the passage of time, in line with the dynamics of the market," he noted.

In the past, he said by way of an example, the risk of each product was never revealed. Today, however, following developments in the business world, the market wants every product to contain information on its risk so that investors can learn which products are relatively safe and will be profitable."

Obviously the banking industry is challenged to ensure that the quality of its GCG must always be improved," said Heru, who was formerly chairman of the Pension Fund of Bank Niaga.

It is not surprising that Heru is very knowledgeable about GCG and Bank Niaga. He is a professional who began from the very bottom of the career ladder. Heru, who has one teenage daughter, first joined Bank Niaga in 1977 as a graduate of the bank's Executive Training Program. He worked in the loan collection department at the bank office in Roa Malaka, Kota. At the time Bank Niaga was just a small bank with six branches and some 600 employees. From there he moved to other departments.

At the beginning of his career at Bank Niaga, Heru spent more time in the loan department and in the branch offices. Later he was promoted to become chief of corporate affairs, internal control and human resources divisions. But his most interesting experience in his almost 30 years at Bank Niaga has been as human resources manager, a position he has held for 10 years.

"I find managing people has been most challenging during my career," he said.

The challenge was especially big when Bank Niaga decided to transform its business portfolio from a bank originally concentrating on corporate clients to a bank increasingly focused on retail banking.

"It is not easy to transform the mind-set of employees from a corporate banking focus to retail banking," he noted.

Luckily, thanks to much training, education and other activities to improve the competence of personnel, the employees of Bank Niaga can now work anywhere they are stationed.

Heru is also thankful for being able to have a long career at Bank Niaga. While many people move to other companies for better positions, Heru prefers to stay put. The reason is very simple."I find the atmosphere at Bank Niaga agrees with me," he said.

As a result, he has worked under four different owners. When he first joined the bank, Bank Niaga was owned by Julius Tahija, who jointly owned the bank with fellow founders Soedarpo Sastrosatomo and Idham. Then the bank was bought by entrepreneur Hasyim Djojohadikusumo.

Later the ownership of the bank was handed over to the government, and in 2003 the bank was acquired by Bumiputera-Commerce Holdings Berhad (BCHB) of Malaysia, which controls 64.25 percent of the bank's shares. And Heru moved up the career ladder. All this has given him valuable experience and memories.

A lover of tennis and swimming, Heru has been active in student activities, especially hiking, since his student days at the University of Indonesia (UI). He was a member of UI's association of nature lovers Mapala UI. But these days he gets around on a large motorcycle.

"Well, I still have adventures in nature but using different facilities," he said. Once in a while he travels outside Jakarta with a small group of large motorcycle enthusiasts to enjoy the fresh air and take his mind off his daily routine. (Maulana Yudiman)

The Jakarta Post
August 23, 2006