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6. OTHER RISKS
Aside from primary risks, the Bank also appreciates the existence of other risks, such as compliance, legal, reputational, strategic, information technology, competitive, human resources and business interruption risks.
Every year, the Bank carries out a top-down assessment and measurement of all risks, including other primary risks, by management through an Enterprise Risk Assessment voting system. Risk proiles are also assessed through a
bottom-up process every quarter.
The management of other risks is conducted through the Operational Risk Committee and directly implemented by supporting line units, such as the Compliance Unit, Legal Unit, Corporate Secretary Unit and IT Operations Unit.
As regards legal risk, the Bank continues to tighten its control of legal risk by, among other things, the placement of Legal Oicers in line units at Head Oice and in Regional Oices, which oicers are obliged to ensure that all
activitiestransactions have been reviewed from the legal perspective.
In the strategic risk arena, the Bank carries out performance reviews and evaluations of business target development policies, and makes improvements to the strategy plan and business targets by considering both
internal and external conditions, whenever required. The Bank continues to enhance the implementation of the inancial performance management support program through the development of automated budgeting, PMS
enhancement, and the Executive Information System EIS.
On compliance risk, the Bank has adopted a Code of Conduct as a part of the Bank Mandiri corporate culture. At the strategic planning stage, the Bank constantly assesses the level of compliance adequacy with the prevailing laws
and regulations. The Bank also applies a consistent and comprehensive rotation and transfer system to employees and oicers in strategic positions.
As regards reputational risk, the Bank has adopted customer service standards that are monitored on a regular basis and are incorporated in the KPIs of branches. The Bank has established a Contact Center so that customers may
submit complaints and inquiries on Bank Mandiri products and services. The Bank also has an extensive Corporate Social Responsibility program that provides assistance in the education, healthcare, culture, sports, environmental,
religious and disaster relief ields.
7. MODEL VALIDATION
Bank Mandiri has an independent validation line unit in the Risk Management Directorate. This unit forms part of internal control structure of the Bank, which helps to simultaneously provide quality assurance as regards the
development of models and fulillment of Bank Indonesia regulations. This line unit validates all risk models that are to be applied and those that are being developed by the Risk Management Directorate. The validation unit is
actively involved in advising on the development and improvement of risk models.
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In 2013, the Bank carried out validation on 31 credit and market risk models which included scoring and rating models including application scoring for the micro, consumer and credit card segments, collectionrecovery
scoring, and rating for project inancing, macroeconomic and retail stress testing models, bond portfolio models, Basel II risk parameter models probability of default and measurement models on market risk exposure re-pricing
gap. The Bank provides advisory services that include Vasicek parameter estimation for the calculation of Potential Future Exposure PFE, Loss Given Default LGD modeling, and the Operational Risk Advanced Measurement
Approach AMA. The validation of risk models is also veriied by the Internal Audit Directorate to ensure that the validation process applied is in compliance with the principles of Good Corporate Governance.
CONSOLIDATED RISK MANAGEMENT
Consolidated risk management has been introduced gradually since 2008 in line with BI Regulation No. 86 PBI2006 on Consolidated Risk Management for Banks with Subsidiaries. The process is a strategic initiative of
the risk management unit of Bank Mandiri and progress is communicated on a regular basis to BI where they are discussed at forums on risk proile and risk based bank rating. This is deemed an important matter as Bank Mandiri
understands that its business may be directly or indirectly inluenced by risk exposure from its subsidiaries.
Bank Mandiri applies consolidated risk management in respect of its subsidiaries operating both in Indonesia and elsewhere by adhering to risk management principles and adjusting them so as to take account of the requirements
set by the local authoritiesregulators, as well as the commercial characteristics of each subsidiary.
Bank Mandiri’s consolidated risk management concept is made up of two major components, namely: 1. First Line, related to BI Regulation no. 86PBI2006 on Consolidated Risk Management for Banks with
Subsidiaries. 2. Second Line, which primarily relects an approach geared to the internal needs of the Bank as a whole,
covering tools, risk awareness, corporate governance, and the risk management information system. Consolidated risk management aims to provide added value to stakeholders as it indirectly shapes a progressive
and safe business environment, ensure compliance with BI regulations on consolidated risk management and reporting, and facilitate monitoring of risk exposure to the operations of subsidiaries in order to enable mitigation
steps to be promptly taken when necessary.
Bank Mandiri conducts consolidated risk management with those of its subsidiaries that operate in the inancial services sector Bank Syariah Mandiri, Bank Mandiri Europe, Bank Sinar Harapan Bali, Mandiri Sekuritas, AXA Mandiri
Financial Services, Mandiri Tunas Finance, Mandiri International Remittance, and Mandiri AXA General Insurance. This provides the framework for the consolidated risk management process and for policy and regulatory alignment
between the Bank as the holding company and its subsidiaries. In order to increase awareness of risk management in the Bank and its subsidiaries, in 2013 Bank Mandiri staged quarterly Enterprise Risk Management Forums FERMA
and an Annual Risk Consolidation Forum ARCC, conducted a Risk Awareness Survey RAWS, provided training for the use of risk management tools, and training on the application of risk management in accordance with the needs
of subsidiaries. The Bank has also developed an RPX system which provides a comprehensive platform for online access by subsidiaries so as to bring about the successful consolidation of risk proile reporting.
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PT Bank Mandiri Persero Tbk.
Bank Mandiri conducts risk management on both an unconsolidated and consolidated basis. As of end December 2013, Bank Mandiri had completed unconsolidated and consolidated risk proile self-assessments, with the results
being as shown in the following table:
RISK INDIVIDUAL
KONSOLIDASI Inherent Risk
Rating Risk
Management Quality
Rating Risk Level
Rating Inherent Risk
Rating Risk
Management Quality
Rating Risk Level
Rating
Credit Risk Low to
Moderate Strong
1 Low to
Moderate Strong
1 Market Risk
Low to Moderate
Strong 1
Low to Moderate
Strong 1
Liquidity Risk Low to
Moderate Satisfactory
2 Low to
Moderate Satisfactory
2 Operational Risk
Moderate Satisfactory
2 Moderate
Satisfactory 2
Legal Risk Low to
Moderate Strong
1 Low to
Moderate Strong
1 Strategic Risk
Low Strong
1 Low to
Moderate Strong
1 Compliance Risk
Low to Moderate
Satisfactory 2
Low to Moderate
Satisfactory 2
Reputational Risk Low to
Moderate Satisfactory
2 Low to
Moderate Satisfactory
2
Composite Rating Low to
Moderate Strong
1 Low to
Moderate
Strong
1
Both on an unconsolidated and consolidated basis, Bank Mandiri achieved Composite Rating of 1. In accordance with BI Circular No. 1324DPNP dated October 25, 2011, this means that the Bank’s risk proile is categorized as
having very low loss potential and a very high quality of risk management, with only insigniicant weaknesses that can be disregarded.
The results of these risk proile assessments show that Bank Mandiri’s consolidated risk management is working well and does not reveal any signiicant diferences in risk management activities. Accordingly, the Bank has a low
composite risk proile and efective risk management.
2014 STRATEGIES AND WORK PLAN
In order to support business growth and to anticipate any changes in the macroeconomic or regulatory situation, Bank Mandiri will continue to develop its infrastructure and risk management capabilities based on the following
strategies:
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PT Bank Mandiri Persero Tbk.
1. Calculation of capital based on Basel II and Basel III Bank Mandiri will continue to develop models and systems required to conduct risk-based capital calculation
simulations based on Basel II for advanced approaches. For trading book market risks, Bank Mandiri will calculate Value at Risk VaR using the historical simulation method for non-linier products to supplement
the parametric approach currently used. For credit risks, Bank Mandiri is currently reining the risk parameters required for the Internal Ratings-Based Approach PD, LGD, EAD. Meanwhile, for operational risks, Bank
Mandiri will prepare the initial components required for the Advanced Measurement Approach such as governance and internal loss data. In addition, Bank Mandiri will prepare simulations and systems in order to
comply with Basel III if it is applied by the regulator.
2. Internal Capital Adequacy Assessment Process ICAAP To integrate the risk assessment process with the capital adequacy assessment process and capital planning
process, Bank Mandiri will develop an ICAAP that covers bankwide risk appetite, comprehensive risk measurement, stress testing, and capital planning management including capital add-ons, with reference
to the domestic regulations and international best practice.
Currently, Bank Mandiri applies risk appetite through policy limits and system limits. The limits are determined based on overall limits, limits per risk type and limits per functional activities that entail risk
exposure. The limit system is developed and proposed by business units to the risk management unit, and approved by the Board of Directors. As part of ICAAP, Bank Mandiri will further develop the limit system and
risk appetite within the framework of a bankwide Risk Appetite Statement, which will relect the capital solvency, liquidityfunding, and operational perspectives.
3. Optimizing stress testing and contingency planning Based on the view that the global and domestic uncertainty will persist in 2014, Bank Mandiri will continue
to implement stress testing, including reining the integrated stress testing process and improving automated credit risk stress testing. In addition, Bank Mandiri will optimize the risk monitoring process and
contingency planning through its crisis management center, the Business Command Center, if economic and banking trends come to crisis point.
4. Application of risk measurement methodology, tools and supporting technology system in line with best practice The implementation of risk measurement methodology and tools is reined continuously with reference to
BI regulations, Basel and international best practice. The rating, scoring, watch list, and portfolio guideline models are reined periodically in order to maintain their accuracy in accordance with the business growth of
each segment.
Bank Mandiri will continue to cooperate with reputable risk management consultants for the purpose of optimizing the implementation of Basel II and ERM. In terms of systems and technology, Bank Mandiri will
start to implement a system to support the management of its integrated central liability system. In line with best practice in integrating risk management with internal control, Bank Mandiri has started to review the
possible application of the Governance, Risk Compliance GRC framework. If applied, GRC will integrate all activities related to governance, risk management and mitigation, and compliance and internal controls so
as to create greater synergies and balance.
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PT Bank Mandiri Persero Tbk.
“Improving Shared Service Capacity to Enable the Best Transaction Bank” was the theme of the transformation
process in the Directorate of Technology Operations in 2013, relecting our work ethic in supporting Bank Mandiri’s goal of “becoming Indonesia’s transaction bank” through the development of innovative solutions,
better products and fast, accountable and reliable services.
The transformation in the Directorate of Technology Operations applies to the technology, operational, and service aspects. Technological support is relected through the application of IT initiatives so as to generate
innovative products and services in the Banks’s three business focus areas: Retail Deposit Payment, Wholesale Transaction and Retail Financing. In addition, various initiatives have been taken to anticipate signiicant transaction
growth, including the consolidation of operational and business units, and the development of operational networks to support business growth.
The Technology Operations Directorate ensures that Bank Mandiri is always ahead of its competitors by maintaining the quality of services in all Bank Mandiri units, as showing by the fact that 2012-2013 saw Bank Mandiri
receive the Best Bank Service Excellence award for the sixth consecutive time.
INFORMATION TECHNOLOGY SUPPORT AND INNOVATION
The process of implementing information technology transformation IT is described in the IT Strategic Plan ISP for 2011-2014, which is derived from the Corporate Plan’s IT development strategy. The Strategic Plan requires the
Technology Operations Directorate’s IT Unit to work closely with the business units to ensure synergies with the needs of business lines and to support the work programs of the business units.
In the Retail Deposit Payment focus area, the Bank has developed a Mass Prepaid System to support the prepaid card business and the modernization of Internet Banking. In addition, customers can also access Bank Mandiri
services at various contact points, such as 11,514 ATMs, 230,352 EDCs, and 2,050 regular and micro branch oices throughout Indonesia. Bank Mandiri is also strengthening the Wholesale sector by way of stabilization and
enhancement of Payment and Cash Management Sistems. As for Retail Financing, Bank Mandiri has improved the processing capacity of the “Loan Factory” in order to enhance the efectiveness and eiciency of the lending
process. The Bank has also developed a Micro Loan Originating System to meet the needs of business processes and micro business models.
To meet the needs of all our customers in Indonesia, Bank Mandiri is always committed to providing the best products and services. One of the innovations that is being continuously developed is e-money. In 2013 Bank
Mandiri developed “e-money Info”, which is an NFC Near Field Communication-based application which allows users to check the remaining balances in Bank Mandiri prepaid products by simply attaching their prepaid cards to
“The ongoing transformation in the Directorate of Technology Operations shows our eagerness to boost national prosperity through
innovative products and services, and fast, accountable and reliable operational processes, while all the time delivering service excellence.”
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PT Bank Mandiri Persero Tbk.
the back of their smartphones. Furthermore, e-money info can help users ind the nearest merchant locations that support transactions using Bank Mandiri prepaid products. This year, Bank Mandiri also started the development
of a non-card form factors as a market diferentiation and segmentation strategy, namely, an e-money wristband developed in collaboration with Wonders Water World Medan.
Another innovation that came on-stream in 2013 was Mandiri e-Cash, a mobile application that gives users “the sensation of having cash in your mobile phone.” With Mandiri e-Cash, customers conduct transfers and payment
transactions using their phone instead of an account number, as would be needed in the case of the conventional payment system. The ease that this provides to customers is expected to drive the growth of the cashless society. It
afords a practical, safe and comfortable way of making such transactions, and also saves taxpayer funds that would otherwise have to be used for the printing and destruction of banknotes. Bank Mandiri’s focus on innovation is a
further proof of our spirit of national prosperity.
INFORMATION TECHNOLOGY GOVERNANCE
The Technology Operations Directorate always ensures that IT governance and management are properly performed. Improvements are consistently made so as to ensure the efective implementation of IT governance and
management and to maintain the reliability of the IT system. One such improvement was the updating the Standard Operating Procedures for Information Technology SPO TI 2013, which became efective on 8 April 2013. This SPO
was issued to unify the provision of information technology, information technology planning and development, operations, and security.
The year 2013 also saw another important milestone with the introduction of our Testing Development Environment, which supports system development capabilities and ensures efective deployment and perfect
integration with existing systems. The continuous improvements made by the Technology Operations in IT governance and management resulted in the Bank being presented with the 2013 IT Banking Excellence Award
from Warta Ekonomi.
FAST, ACCOUNTABLE AND RELIABLE OPERATIONS
Operational support to business units is provided through our operational strategies, which includes the consolidation of operations units and business units, the development of adequate infrastructure, the
strengthening of operational controls, and the improvement in personnel competencies so as to support the application of GCG. The consolidation of operations and business units has been brought about by the opening of 6
Credit Operations Desks and the upgrading of the status of 7 Credit Operations FloorsDesks throughout Indonesia.
Infrastructure development has seen the revitalization of the Strong Room and Custodian Service for Legal Loan Documents in 11 Credit Operations locations. There has also been an increase in cash processing capacity and
infrastructure with the establishment and relocation of cash and clearing processing following the establishment of the Cash Clearing Processing Center CCPC in Batam, the relocation of the Medan CCPC, and the relocation of
clearing units in Semarang and Denpasar CCPCs. Organizational productivity and capacity are also continually being upgraded, with the operations error rate in 2013 for payroll, RAOS, export, import, bank guarantee transactions
being 0.184, compared with a target of 0.342.
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PT Bank Mandiri Persero Tbk.
The success of our operations, in addition to being relected in the error rate, are also relected in customer satisfaction. One of the mechanisms that plays an important role in maintaining customer satisfaction, both in terms
of sales support and complaint handling, is Mandiri Call 14000. Our dedication to this service is evidenced by the awards received by Mandiri Call 14000 in 2013, such as: 1 The Best Banking Service Excellence for Phone Banking
Oicer by Marketing Research Indonesia, the Gold Medal Award of Contact Center World - The Best Green Contact Center by Contact Center World.com, and Platinum Award - The Best Indonesian Contact Center Award for the Best
Contact Center Operations above 100 Seats by ICCA Indonesian Contact Center Association.
SERVICE EXCELLENCE AND PEOPLE DEVELOPMENT
Our commitment to providing the best possible services to our customers is continuously honed so as to meet or exceed customer expectations. This is evident from the fact that Bank Mandiri has received the Best Bank Service
Excellence award six times in a row. Last year also saw the Bank receive The Golden Trophy for Banking Service Excellence for the second time and the award for Most Consistent Bank in Service Excellence for the fourth time.
As one of the important pillars supporting the success of the Technology Operations Directorate, the quality and quantity of human resources continue to be improved. In 2013 the Bank delivered 36 certiication training courses
to 108 employees, including courses for CCNA, EA, CDCP, and BCM-330 and ISO 22301 certiication. As regards the fulillment of manpower needs, 321 new employees were recruited last year. In addition to above, organizational
developments and improvements have been instituted so as to further enhance the capacity of the Technology Operations Directorate to support the business operations of Bank Mandiri.
The proper deployment of people, processes and procedures has resulted in signiicant transaction growth, with the number of transactions in 2013 amounting to 2.5 billion, an increase of 19 year on year. This transaction growth is
supported by maximizing the role of electronic channels, which are more cost-efective than traditional channels. like branches. This is evident from the fact that the ratio between the number of electronic transactions and number
of branch transactions rose to 93:7 in 2013, compared to 92:8 in 2012. This clearly relects an increase in public conidence in Bank Mandiri’s e-channel products.
2014 STRATEGIC TARGETS
At the end of 2013, Bank Mandiri launched the Mandiri New Horizon 2020 program which sets out the Bank’s vision to be the Best Bank in ASEAN by 2020. To help achieve this vision, Bank Mandiri is preparing its 2015-2020 Corporate
Plan. In connection with the expiration of the 2011-2014 ISP period, and in order to address the challenges identiied in the Corporate Plan, the Technology Operations Directorate will prepare the 2015-2020 ISP in 2014 in
tandem with the preparation of the Corporate Plan. Greater synergy and coordination in the process of preparing of IT plan and business plan will help optimize the alignment of the two plans. The 2015-2020 ISP will be accompanied
by a more detailed execution plan so as to ensure the successful application of the IT function in supporting the achievement of business targets and improving competitiveness at regional level.
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PT Bank Mandiri Persero Tbk.
Our commitment to continuous innovation and to improving the quality of services in order to reach all levels of society can be seen from various initiatives that were undertaken in 2014. Bank Mandiri Branchless Banking
represents a diversiication of banking services so as to reach unbanked and under-banked customers. The Bank Mandiri Branchless Banking service currently uses the Mandiri 1416 product which is accessible from mobile
phones. In 2013, a pilot project was carried out, which was evaluated at the end of 2013 so as to identify which aspects could be improved in the future. Bank Mandiri is ready to expand the penetration of Branchless Banking as
part of the Bank’s commitment to the inancial inclusion program, which is a concrete manifestation of the Spirit of National Prosperity.
In addition to branchless banking, 2014 will see the launch of a program to increase the capacity and quality of our e-channels through a modernization process, where the focus in 2014 will be the modernization of internet banking
services for retail customers and the development of Managed File Transfer MFT and Transformation Gateway features for corporate customers that use Mandiri Cash Management. Improvements in quality of service will be
accompanied by improvements in risk management through the implementation of Asset Liability Management ALM Simulations and the Integrated Central Liability System ICLS.
The increase in the number of banking transactions from year to year shows increasing customer conidence in Bank Mandiri, which will need to be responded to through the availability of adequate IT infrastructure. To that end,
Bank Mandiri plans to increase the speed, reliability, and availability of services through the revitalization of Host Core Banking machines. In terms of infrastructure capacity management, the Technology Operations Directorate
has reined the capacity planning framework using the best practices set out in the ITIL Capacity Management Framework and COBIT. The implementation of capacity planning is expected to ensure eicient management of
costs, with the capacity to be purchased being harmonized with the needs of the organization balancing cost against required resources, and to ensure that IT resources are available to meet current and future needs of the
organization. Improvements in capacity management are supported by a suite of capacity management tools to assist with the implementation of better capacity management.
To meet the future challenges that will be faced by Bank Mandiri, the Bank also continues to pay close attention to human resources development. In line with the Mandiri Employee Value Preposition, the Technology Operations
Directorate strives to provide the best possible services by improving the capabilities and professionalism of IT staf through recruitment, training, certiication, internal rotation, and people development programs on an ongoing
basis so as to update their knowledge and skills in order to allow them to keep up with the latest technological developments and business needs. The Technology Operations Directorate has also strengthened capabilities in
transactional banking through the addition of a new unit, the IT Operations Transaction Banking Support Unit, and the consolidation of credit operation units so as to strengthen support to business banking and micro banking.
A number of improvements to operational aspects have been made through the provision of more eicient and reliable document managementcustodian services, increases in operational support for e-channel wholesale
transactions, optimization of the Document Management System DMS, and establishment of cash and clearing processing centers. In addition, the Technology Operations Directorate provides support for the achievement
of the 3 business focuses of Bank Mandiri through service quality management involving Mystery Shopping and Calling for branches, Priority Banking Outlets, Consumer Cards, Consumer Loans, e-channels, reinement of
customer complaint management, and communication programs to heighten the awareness of all employees of Bank Mandiri.
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PT Bank Mandiri Persero Tbk.
The Compliance and Human Capital CHC Directorate continues its transformation through strategies to accelerate human capital value creation and the development of a road map that will help Bank Mandiri evolve from being a
Good Company to being a Great Company.
The Compliance and Human Capital Directorate’s strategic initiatives are focused on improvements in human capital governance quality in order to help further boost the Bank’s performance.
To this end, the following these for the unit’s work program was selected: “Aligning the Human Capital Management System with Best in Class Practices based on the Employee Value Proposition”.
The development of Human Capital strategies and policies has regard to the existing Human Capital Framework Employee Lifecycle and efective best practices, which are:
POLICIES AND PROCEDURES
Policy architecture in the human capital ield consists of the Bank Mandiri Human Capital Policies KHCBM and the Human Capital Standard Guidelines SPHC. These Policies and Standard Guidelines are reviewed and reined on a
regular basis in accordance with the Bank’s needs and best practices.
CAPACITY FULFILLMENT
A well-thought-out human resources strategy is required to support the Bank’s rapid growth based on the principle of “right people with potential right its”. This strategy, which is adjusted from time to time to take account of
business needs, has helped improve the level of employee engagement in the company. Staing needs are fulilled from both internal and external resources.
Employees are required by units throughout Indonesia. In order to provide opportunities for the best candidates from the regions, Bank Mandiri conducts recruitment in collaboration with prominent universities by participating
in job fairs and campus hiring. In addition, recruitment is also conducted online via the Bank Mandiri website www. bankmandiri.co.id.
There are 2 two strategies used to meet manpower requirements, namely: 1.
Bank Mandiri’s internal resources through the following employee development programs: Staf Development Programme SDP, Local Staf Development Program LSDP, Employee Authority Holder Program P3K, Micro
Young Leadership Training Program PPMM, and the transfer of personnel from Front Oice to Back Oice.
2. External resources, through the hiring of fresh graduates and experienced bankers at the senior management
level. Capacity fulillment through external resources is conducted having regard to speciic issues and conditions, including a scarcity of senior management resources in particular areas, and the type of work and
expertise involved, as described below:
compliance human capital
“A spirit of mutual respect, a good attitude and the right principles have helped to improve the quality of industrial relations between
Management and Unions from year to year”
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PT Bank Mandiri Persero Tbk.
a. Recruitment of Executive Management Candidates in certain Regions
Taking into account the limited number of senior management candidates available in particular areas, 2012 saw the introduction of the Papua Region Special Leadership Candidates Program CPKP, whose
participants consist of native Papuans or migrants who have long been resident in the Papua region. Bank Mandiri has also developed a the Regional Oicer Development Program ODP Pegawai for areas such as
Kalimantan, Sulawesi, and Sumatra
b. Recruitment of Employees with Speciic ExpertiseSkills To support the growth of Bank Mandiri and the achievement of its targets, we collaborate with executive
search agencies to as to assist in the recruitment of persons who are expert in certain areas, such as information technology, so as to ill positions in executive management and middle management.
c. Outsourcing To meet the need for manpower, especially in the case of work that is auxiliary in nature, the use
of outsourcing has increased in line with our rapid growth. In 2013, we conducted a review of our outsourcing policy in order to ensure that it complies with Bank Indonesia regulations and labor
regulations. We also increased the monitoring of outsourced manpower use by optimizing the use of the bankwide database system on outsourced resources.
d. Program Kriya Mandiri The Mandiri Development Program is an integrated work and learning program for high school students
and university students graduates that provides an opportunity to learn what it is like to work at Bank Mandiri.
In addition, in order to groom top talent for future leadership roles in Bank Mandiri, the Bank has further improved the procedures for the recruitment of new employees through the Oicer Development
Program ODP, with the focus being on the recruitment, selection and development stages. It is expected that with continuous enhancements, the quality of candidates recruited through the ODP will improve
over time.
EMPLOYEE RELATIONS ENGAGEMENT
Industrial relations at Bank Mandiri are based on the spirit of the parties to provide the best both for the Company and Employees. Employees perform their obligations by devoting their skills to the advancement of the Company,
while the Company provides a comfortable working environment in which employees can develop and receive what they are entitled to, as mandated by the legislation, as well as other beneits.
Based on the spirit and principles of mutual respect, industrial relations, as relected in the relationship between management and the labor union, can be maintained and even improved from year to year. Bank Mandiri has
successfully implemented a series of strategic initiatives in the human capital ield based on best in class practices. This in itself is testament to the harmonious nature of industrial relations in Bank Mandiri.. In 2013, the hc4U
function was improved as the Employee Service Center with the addition counseling services in relation to good inancial management for employees. Engagement activities through the Mandiri I-care program in 2013 individual
commitment actions raises engagement was focused on monitoring the development and follow-up on the Impact Plans in each line unit based on the results of the 2013 engagement survey so as to improve engagement
levels and create an open, positive and progressive working environment in line with the Mandiri Employee Value Proposition.
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ORGANIZATION DEVELOPMENT
An eicient and efective organization, as well as being competitive in the marketplace, are the major requirements for propelling business growth. To that end, organization development is assessed through regular organization
reviews focusing on the productivity and efectiveness of the organizational structure, the development of job competencies and the gradual introduction of lexi time in selected units.
TALENT SUCCESSION MANAGEMENT
Talent Succession Management is an important part of the management of Human Capital. Bank Mandiri regularly reviews its Talent Succession Management program so as to meet business needs in a timely manner time to
market through the development of competent, productive and engaged talent. To prepare candidate successors for the leadership pipeline, Bank Mandiri applies, among others, the following programs:
1. Leadership development program for Senior Management and Middle Management level employees.
2. Assessment programs to obtain Success Proiles that will be used to evaluate suitability for intended positions.
3. Speciic assignments in projects within Bank Mandiri and its Subsidiaries.
PERFORMANCE MANAGEMENT REWARD
Performance Management Rewards are important aspects in the management of Human Capital so as to support a sustainable inancial performance at Bank Mandiri. Consequently, Human Capital continues to make sustainable
improvements in the performance management ield, one of which is the introduction of e-Mandiri EASy, which stands for Electronic Mandiri Employee Appreciation System. e-Mandiri Easy is an holistic appreciation system for
all employees of the Bank. It is a comprehensive Internet-based system that integrates the other human capital functions.
The Company continuously reines and improves the rewards it ofers its employees, such improvements to the staf healthcare program, a lexible beneits program, and other programs to improve staf welfare.
EMPLOYEE VALUE PROPOSITION EVP
Bank Mandiri has adopted an Employee Value Proposition EVP or “prosperous spirit” which serves as a “noble purpose” for all employees working at Bank Mandiri. The Employee Value Proposition is as follows:
Prosperous Spirit: At Mandiri, we have the Prosperous Spirit, through which we can lourish in an open, positive, progressive environment and be inspired to create prosperity for our colleagues, family, customers, community and
country.
EMPLOYEE VALUE PROPOSITION EVP
Bank Mandiri has adopted an Employee Value Proposition EVP or “prosperous spirit” which serves as a “noble purpose” for all employees working at Bank Mandiri. The Employee Value Proposition is as follows:
Prosperous Spirit: At Mandiri, we have the Prosperous Spirit, through which we can lourish in an open, positive, progressive environment and be inspired to create prosperity for our colleagues, family, customers, community and
country.
The internalization of EVP is promoted through various programs and communications media, such as: Training for Line Managers, Change Agents, Unions, Senior Management, preparation of cultural programs in line with the
prosperous spirit, production of Mandiri EVP video, posters, standing banners, wallpaper, Mandiri magazines, and corporate events.
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PT Bank Mandiri Persero Tbk.
The Mandiri EVP provides added value to the company through increased levels of engagement on the part of both employees and customers of Bank Mandiri. It also ofers a high level of competitiveness in attracting the top
talent in the market and to retain such top talent in Bank Mandiri, thereby reducing the rate of employee turnover, improving the image and reputation of the Bank as an employer of choice and ultimately improving the company’s
intangible assets..
CULTURE TRANSFORMATION
To support the 2015-2020 Bank Mandiri Further Cultural Transformation, the Compliance Human Capital Directorate and the Board of Directors, Board of Commissioners, Senior Management, and the Boards of Directors
of Subsidiaries and Generasi Muda Mandiri held a New Horizon Workshop on September 2-3, 2013. During the workshop, Bank Mandiri committed itself “To be the Best Bank in ASEAN in 2020”.
During the workshop, all the participants agreed that cultural values such as Trust, Integrity, Professionalism, Customer Focus, Excellence TIPCE remained relevant as the core values of Mandiri. However, to support the
achievement of the above commitment, several meanings and key behaviors of the core values needed to be adjusted to take account of the challenges to be faced by Bank Mandiri.
Table of Values, Meanings, Key Behaviors in 2005 and 2013
Values Meanings
Key Behaviors 2005
2013 2005
2013
Trust Building trust and
good faith among stakeholders as
part of open and straightforward
relationships based on reliability
Building trust and good faith as part of open
and straightforward relationships based on
reliability Mutual
respect and collaboration
Honest, straightforward
and open 1. Honest,
straightforward and not deferential.
2. Empowering potentials,
eliminating silos, mutual synergies and
mutual respect
Integrity Always thinking,
speaking and behaving in a laudable manner,
maintaining dignity and holding the
professional code of ethics in high regard
Behaving in a laudable manner, maintaining
dignity and holding the professional code of ethics
in high regard 3. Disciplined
and consistent
4. Thinking, speaking and
acting in a laudable manner
Disciplined, consistent
and fulilling commitments
Thinking, speaking and acting in a
laudable manner
Professionalism Committed to
working diligently and accurately based on
top-class competencies and responsibility
Working diligently and accurately based on top-
class competencies and responsibility
Competency and responsibility
Providing optimum
solutions and outcomes
5. Reliable, resilient,
responsible, able to learn and conident
6. Imbued with spirit of
intrapreneurship and courageous in taking
decisions based on measured risks
compliance human capital
Annual Report
2013
PT Bank Mandiri Persero Tbk.
Customer Focus Always treating the
customer as the key partner for
Always positioning the customer internally and
externally as the focus for developing positive,
mutually beneicial and balanced growth
7. Innovative, proactive, and
responsive 8. Prioritizes
customer service and satisfaction
Elicits customer needs and wishes in
a proactive manner and provides total
solutions
Provides the best possible services in
a quick, appropriate, straightforward, and
accurate manner that prioritizes customer
satisfaction
Excellence eveloping and
improving all areas so as to consistently
obtain optimum added value and best possible
results Always striving to achieve
excellence leading to perfection as an expression
of love and pride for Mandiri
Orientated to added value
and continuous improvement
10. Environmentally aware
9. Orientated to added
value and continuous improvement
10. Innovative in creating opportunities so
as to achieve a performance that
exceeds expectations 11. Focus and discipline
in executing priorities
LEARNING DEVELOPMENT
The capability and competencies of Bank Mandiri employees are continuously improved having regard to the People Development Framework. A number of strategic initiatives have been adopted, such as:
1. Coaching Culture Program
This program is aimed at imparting the coaching culture to all employees in order to bring out the best in all Bank Mandiri employees. The Coaching Culture Program is applied in all Regional Oices and units at Head
Oice. The program is a follow-up to the 4 Disciplines of Execution 4DX Program from previous years.
2. Great Leader Program
Leadership capability development is promoted through the Great Leader Program for potential managers of line units. The objective of this program is to enhance the leadership capabilities of Bank Mandiri employees.
The Great Leader Program was implemented in four phases Department level in 2013, with a total of 47 batches participating.
3. Program Leadership Forum
The development of a culture of sharing knowledge and coaching has also been promoted through the Leadership and Executive Education Series Program, in which international-class speakers are invited to share
their knowledge and experience with Bank Mandiri employees.
4. Mandiri University
The Mandiri University is a corporate university being developed by Bank Mandiri through the transformation of the previous Learning Center Group. The learning center policy was changed from tactical learning to
strategic learning, with Mandiri University serving as a strategic partner for business units in striving to achieve the Bank Mandiri vision. To provide an optimal contribution in line with the prosperous spirit, Mandiri
University is aimed at not only equipping Bank Mandiri employees with optimum competencies, but also producing the best leaders.
compliance human capital
Annual Report
2013
PT Bank Mandiri Persero Tbk.
The development of the Mandiri University involves three phases: 1 Phase I, Laying the Foundations in 2011- 2012, 2 Phase II, Mandiri University Implementation in 2013-2014 and 3 Phase III, Learning Organization
from 2014 onwards. The transformation from the Learning Center Group to the Mandiri University was carried out in 2013. Consequently, the focuses in 2013 were on the implementation of business process in Mandiri
University, implementation of end-state organization, and the establishment of a learning culture, in addition to completion of the infrastructure construction work that started in 2012.
The Mandiri University transformation process involves three pillars as the main focuses, namely: 1 People, to ensure that the staf at Mandiri University have the best competencies and capabilities; 2 Infrastructure,
consisting of buildings 1 type A campus building, 8 type B campus buildings, and 19 type C campus buildings around Indonesia and technology system infrastructure Enterprises Learning Management System and
Enterprises Knowledge Management System; 3 Curriculum, so as to ensure that the curriculum designed by Mandiri University supports the development of the necessary competencies and the achievement of the
targets of business and support units in line with Bank Mandiri strategies. The Mandiri University curriculum has been developed having regard to international best practices, including its delivery.
Last year saw the designing of new learning business processes, the establishment of organizational structures focused on improving the role of Mandiri University as a business partner, and the inalizing of the curriculum
based on international best practices. Infrastructure development to support the new business processes continued apace, with the Mandiri University Campus in Medan being oicially inaugurated as the prototype
for the construction of other campuses, the implementation of the Enterprise Learning Management System ELMS, and the development of the Enterprise Knowledge Management System EKMS. The competencies of
trainers also need to be continuously improved by way of certiication for Learning Consultants and Learning Facilitators.
Bank Mandiri is aware that the transformation from a learning center to a corporate university needs to be accompanied by the formation of mindsets, behavior and culture that supports Mandiri University in providing
an optimal contribution. Therefore, in 2014, which marks the last stage of the transformation process, the Bank will focus on the promotion of learning culture and behavioral change by consistently acting as a strategic
business partner, creating new innovations and further reining business processes.
compliance human capital
Annual Report
2013
PT Bank Mandiri Persero Tbk.
PERFORMANCE OF DUTIES AND FUNCTIONS IN COMPLIANCE FIELD
Management believes that the performance of compliance functions by Bank Mandiri has improved investor conidence in the Bank and provided added value to shareholders and other stakeholders.
The Compliance Director has performed his duties and responsibilities properly as relected in:
1. Good Corporate Governance
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