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A Directors Service Agreement is a crucial document used when appointing directors to Indonesian companies (PT), whether private or public. This agreement serves as the primary contract governing the relationship between the company and its director, incorporating requirements from Indonesian Company Law (Law No. 40 of 2007), employment regulations, and corporate governance standards. It's particularly important as it defines the scope of authority, duties, remuneration, and obligations of directors while ensuring compliance with local regulatory requirements. The document is essential for both Indonesian companies appointing local directors and multinational corporations establishing leadership in their Indonesian subsidiaries. It typically requires approval from the Board of Commissioners and, in some cases, shareholders, especially for public companies subject to OJK regulations.

1. Parties: Identification of the Company and the Director, including complete legal names and addresses

2. Background: Context of the appointment, reference to relevant board/shareholder resolutions, and brief company description

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

4. Appointment and Term: Details of the directorship appointment, commencement date, and duration (fixed term or ongoing)

5. Duties and Responsibilities: Comprehensive outline of director's duties under Company Law and specific to the role

6. Time Commitment and Exclusivity: Expected working hours and any restrictions on other business activities

7. Remuneration and Benefits: Base salary, bonuses, benefits, and review mechanisms in line with Indonesian regulations

8. Expenses: Provisions for reimbursement of reasonable business expenses

9. Location and Travel: Primary work location and travel requirements

10. Compliance and Governance: Obligations to comply with company policies, regulations, and corporate governance requirements

11. Confidentiality: Protection of company information during and after the engagement

12. Intellectual Property: Assignment of IP rights created during the directorship

13. Data Protection: Handling of personal and company data in compliance with Indonesian regulations

14. Termination: Grounds and procedures for termination, notice periods, and consequences

15. Post-Termination Obligations: Continuing duties and restrictions after termination

16. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution