If a Company Faces Criminal Charges, Must Its Directors Also Be Held Liable?

Andri Yanto, President Director of PT Abimanyu Pustaka Utama, has once again challenged the provisions governing corporate criminal liability before the Constitutional Court (Mahkamah Konstitusi or “MK”). On 7 September 2026, the MK declared Andri’s petition inadmissible in Case No. 290/PUU-XXIV/2026. However, in that case, the MK did not assess the substantive constitutionality of the challenged provision.

Andri subsequently filed another petition for a substantive review of Article 326 paragraph (1) of Law No. 20 of 2025 concerning the Criminal Procedure Code (“KUHAP Law”) in Case No. 371/PUU-XXIV/2026. At the preliminary hearing on 8 October 2026, he challenged the use of the word “and” in the provision stipulating that liability for criminal offenses committed by a corporation shall be imposed on the corporation and the person responsible for the corporation.

According to the petitioner, this wording could give rise to an interpretation that the corporation and the person responsible for it must be held criminally liable simultaneously, without sufficient differentiation between the respective grounds for their liability. Accordingly, he requested that the word “and” be interpreted to mean “and/or.”

The Position of Director Is Not Proof of Guilt

Within a company, authority and responsibility are distributed among many individuals. The actions of an employee are not necessarily known to or ordered by the board of directors. Accordingly, a criminal offense committed in the course of a company’s business activities does not, in itself, establish that every member of its management is guilty.

Two matters must be distinguished: the criminal liability of the corporation and the individual criminal liability of those who manage it.

Both forms of liability may arise simultaneously, but this is not invariably required. A corporation may be held liable without this meaning that all its directors are automatically guilty. Conversely, a corporate officer may also be held liable where there is a legal basis and sufficient evidence satisfying the applicable requirements.

The assessment must take into account the role of the individual concerned, their involvement, the requisite elements of culpability, and the applicable legal provisions. For example, a corporate officer who orders or participates in a criminal offense is in a different position from one who has had no involvement whatsoever.

However, the absence of a direct order or knowledge of the criminal offense does not automatically absolve a corporate officer of liability in all circumstances. Liability may still arise where the relevant elements and legal grounds are satisfied, including in certain circumstances involving negligence or acquiescence.

Accordingly, holding a particular position is, by itself, insufficient to establish criminal guilt. However, holding such a position does not automatically exempt a person from liability either.

Does the Word “And” Actually Require Both Parties to Be Punished?

This is the aspect of the petition that requires further examination. The word “and” does indeed connect the corporation with the person responsible for it. However, does that word necessarily mean that both must be punished in every case?

The inclusion of two subjects in a single article does not always mean that both must be subject to criminal punishment simultaneously. The meaning of the provision must be interpreted together with other rules governing the grounds for criminal liability.

Article 49 of Law No. 1 of 2023 concerning the Criminal Code (“KUHP”), as amended by Law No. 1 of 2026 concerning Criminal Adjustments, distinguishes liability imposed on a corporation from the possibility of imposing liability on certain individuals, such as corporate officers holding functional positions, persons issuing orders, persons exercising control, or beneficial owners of the corporation.

This provision is important because it demonstrates that individual liability must be assessed on the basis of the applicable categories and legal grounds, rather than solely because an individual works for or holds a position within a company.

Accordingly, the issue is not merely whether the word “and” should be replaced. The more important question is whether Article 326 paragraph (1) of the KUHAP Law truly requires both subjects to be held liable, or whether it can still be interpreted consistently with the provisions of the KUHP.

Is “And/Or” the Solution?

The petitioner proposes the use of the words “and/or” so that liability may be imposed on the corporation alone, the person responsible for it alone, or both.

This proposal allows for greater flexibility. However, changing the wording does not automatically resolve the issue. Law enforcement authorities must still determine who may be held liable and the legal grounds for doing so.

If only the corporation is held liable, there must be a supporting legal basis. If corporate officers are also prosecuted, their involvement and the grounds for their individual liability must still be examined. If both are held liable, each must satisfy the applicable legal requirements.

This means that the central issue is not merely the choice between “and” and “and/or,” but rather the need for clarity regarding when and on what grounds each party may be held criminally liable.

This need for clarity is connected to Article 28D paragraph (1) of the 1945 Constitution of the Republic of Indonesia, which guarantees fair legal certainty. The law must provide clear grounds to ensure that a person is not criminally punished solely because of their position. At the same time, the rules must not create loopholes that enable corporations or corporate officers who are genuinely liable to evade law enforcement.

The MK Has Not Yet Ruled on the Merits of the Case

Previously, in Case No. 290/PUU-XXIV/2026, the MK declared Andri’s petition inadmissible on 7 September 2026 because the arguments concerning the conflict between the challenged provision and the 1945 Constitution were deemed insufficient. That decision did not mean that the MK had declared the challenged provision constitutional or unconstitutional.

At the preliminary hearing in the latest case on 8 October 2026, the MK requested that the petitioner clarify his legal standing, the grounds of his petition, and the relief sought. The petitioner was given an opportunity to amend the petition until 12:00 p.m. Western Indonesia Time (WIB) on 21 October 2026.

Accordingly, the MK has not yet ruled on the substantive issues in this latest case.

Ultimately, corporate criminal liability should not automatically mean that the board of directors must also be criminally punished. However, corporate officers cannot shield themselves behind their positions or the company’s organizational structure where there are legal grounds for holding them liable.

What must be ensured is that the corporation and its corporate officers are held liable on the respective legal grounds applicable to each, rather than merely because both are associated with the same criminal offense.