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TWSE releases amended "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies"

Publish time:2016-10-14

In keeping with Taiwan’s commitment to the highest possible standards of business ethics and integrity, the Taiwan Stock Exchange amended the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies in response to the latest G20/OECD Principles of Corporate Governance. The changes cover 22 articles relating to key corporate governance issues in Taiwan, and were announced on September 30, 2016.
 
1. Chapter 2, Section 2 Enabling Interaction with Shareholders is added in response to the growing importance of the Stewardship Principles. Furthermore, the G20/OECD Principles of Corporate Governance (III) for Institutional investors, stock markets and other intermediaries were also considered. Articles on relations with shareholders and creating positive dialogue with investors were reviewed from corporate governance codes in the UK and Japan.
 
2. In reference to the board secretary position (a.k.a. company secretary or corporate governance officer) that exists in capital markets in the United States, the United Kingdom, Hong Kong, and Singapore, an addition to the Taiwan CG Best Practice Principles was made. This suggests companies appoint an employee/unit (full-time/part-time unit) to handle corporate governance related matters. It also requires that a senior manager be appointed as a supervisor. The addition article 3-1 specifies the qualifications and experiences needed and the scope of corporate governance.
 
3. Other provisions are amended for the purposes of encouraging independent directors to attend shareholder meetings, promoting the electronic voting system, eliminating the voting barrier for international shareholders and disclosing shareholder meeting information in both Chinese and English.  This facilitates a sound board of directors, encourages board diversity, and imposes restrictions on the number of companies on which independent directors may serve simultaneously.
 
The TWSE also said that the Stewardship Principles of Taiwan was released on June 30. Seventeen institutional investors, including the four largest state funds as well as SITEs and life insurance companies owned by financial holding companies, had signed the Principles as of the end of September. One special note is the signatory, Robeco, whose RobecoSAM assesses ESG globally in over 3,000 listed companies to create the Dow Jones Sustainability Index rankings.
 
The TWSE sees this as an opportunity to further engage institutional investors to enhance corporate governance practices in the companies in which they invest. This can augment governance matters in the capital market both domestically and internationally. It is the TWSE goal to encourage listed companies to adopt the latest provisions of the Stewardship Principles, a major part of which is to have active dialogue with institutional investors to create mutual long-term value.