After completing the Initial Public Offering (IPO) process, many companies assume that the most challenging phase is behind them. In reality, becoming a public company marks the beginning of far more complex responsibilities. The success of an IPO is not only measured by how much capital is raised from the public, but also by the company’s ability to maintain investor trust and comply with the various legal obligations inherent in its status as a public entity.
One of the main challenges post-IPO is compliance with reporting obligations. Public companies in Indonesia are required to submit periodic and incidental reports to the Financial Services Authority (Otoritas Jasa Keuangan/OJK) and the Indonesia Stock Exchange (IDX). According to Article 2 of the OJK Regulation of the Republic of Indonesia Number 14/POJK.04/2022 concerning the Submission of Periodic Financial Reports by Issuers or Public Companies, once the registration statement becomes effective, the Issuer or Public Company is required to submit and publish its Periodic Financial Reports to the public through OJK’s electronic reporting system. These reports include annual and semi-annual financial statements, each of which must consist of a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity, a statement of cash flows, and notes to the financial statements. This obligation is not merely a matter of legal compliance, but also serves as a critical foundation for ensuring transparency and maintaining investor confidence in the company.
On the other hand, the company is also expected to build and maintain good relationships with shareholders through its investor relations function. This function is vital for promoting transparency, articulating the company’s business strategy, and managing market expectations. Ineffective communication may create negative perceptions among investors, which can ultimately impact the company’s share price and reputation.
Another pressure stems from market expectations for stable and positive financial performance. Once a company becomes public, its management is no longer accountable solely to controlling shareholders, but also to the general public. The demand to deliver strong short-term results often conflicts with long-term business strategies. If not carefully managed, this pressure can lead the company to make risky or unsustainable business decisions.
Public company status also increases exposure to legal risks. Delayed reporting, misleading disclosures, or poorly managed conflicts of interest may lead to legal action, including lawsuits from shareholders. Therefore, companies must ensure that good corporate governance (GCG) principles are thoroughly implemented, including strong oversight by independent commissioners and internal audit functions.
Moreover, undergoing an IPO requires a cultural transformation within the company. Values such as transparency, accountability, and disciplined reporting must be internalized throughout the organization. This necessitates updates to the organizational structure, employee training, and the refinement of operational procedures to ensure that all parts of the company are prepared to operate under greater public scrutiny.
Becoming a public company is not merely a change in capital structure; it is a shift in mindset and operational approach. Companies that are planning or have recently listed on the stock exchange must recognize that the true success of an IPO can only be measured by how well they endure and grow as a public entity over the long term.
If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of the leading corporate law firms in Indonesia, with extensive experience handling similar matters. Our team of professional corporate and civil lawyers makes us one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.
Author:
Dewi Susanti