Directors Service Contract Template for Indonesia

The Directors Service Contract is a crucial document used when appointing executive directors to Indonesian companies, whether for local or foreign-owned entities. It serves as the primary agreement governing the relationship between the company and its directors, ensuring compliance with Indonesian Company Law (Law No. 40 of 2007), Manpower Law, and relevant OJK regulations for listed companies. This document is essential for establishing clear terms of engagement, protecting both the company's and director's interests, and meeting corporate governance requirements. It becomes particularly important in contexts involving listed companies, foreign directors, or group company structures, where additional regulatory compliance may be necessary. The contract typically requires approval from the Board of Commissioners and may need to be bilingual if involving foreign directors.

1. Parties: Identification of the company and the director, including their respective addresses and registration details

2. Background: Context of the appointment and any relevant corporate approvals or shareholder resolutions

3. Definitions: Key terms used throughout the agreement including Company, Board, Confidential Information, etc.

4. Appointment and Term: Terms of appointment, duration, and any renewal provisions

5. Duties and Responsibilities: Director's key duties, reporting lines, and compliance with corporate governance requirements

6. Time Commitment: Expected working hours and dedication requirements

7. Remuneration and Benefits: Base salary, bonuses, benefits, and review mechanisms

8. Expenses: Provisions for reimbursement of business expenses

9. Leave Entitlements: Annual leave, sick leave, and other permitted absences

10. Confidentiality: Protection of company information and trade secrets

11. Intellectual Property: Ownership and protection of IP created during directorship

12. Non-Competition and Non-Solicitation: Post-termination restrictions and their geographical/temporal scope

13. Termination: Grounds for termination, notice periods, and consequences

14. Company Policies: Compliance with internal policies and procedures

15. Governing Law and Jurisdiction: Application of Indonesian law and dispute resolution mechanisms