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The 2017 Corporate Governance Evaluation Indicators are officially announced.

Publish time:2017-01-06

The Taiwan Stock Exchange (TWSE) announced that the 2017 Corporate Governance Evaluation, which measures five dimensions and includes 99 indicators, would take effect for the period from January 1, 2017 to December 31, 2017, with the evaluation results to be released by the end of April 2018.
 
The TWSE pointed out that the evaluation is about to enter its fourth year, having begun in 2014. The statistical data clearly shows that the Corporate Governance Evaluation has guided TWSE/TPEx-listed companies to adopt better practices and gear to international standards. To continue to build corporate governance core values among listed companies and further enhance the differentiation of the overall evaluation, six new indicators were added and ten were removed in 2017. The total number of indicators decreased from 103 to 99. In addition, ten indicators were amended while types of two indicators were adjusted. The changes reference experiences gained over the past three years, global corporate governance trends, newly revised domestic regulations, and feedback received from all sectors. 
 
The TWSE further indicated that, to continuously promote the effectiveness of the board of directors, relevant indicators were amended for 2017, including “honestly disclosing opinions or resolutions of major proposals by independent directors or the audit committee in annual reports,” “setting up functional committees other than statutory requirements,” and “disclosing the implementation of the board diversity policy in annual reports and company website.” Moreover, some of the indicators were reviewed and amended to strengthen corporate governance, such as increasing the weight of providing English information, including English financial statements in order to improve shareholders equality. Other added indicators are:“disclosed the examination criteria and procedures for nomination in the cases of directors/supervisors elections”;“shareholders meetings attended by a majority of the directors and at least one supervisor in person” to better protect the interests of the shareholders; and “establishing a unit dedicated to promoting corporate governance” to encourage a company to designate a unit or personnel exclusively dedicated to relevant matters on corporate governance.
 
Furthermore, to encourage companies to voluntarily adopt better corporate governance practices rather than just following regulatory requirements, three indicators were added, including “voluntary adoption of electronic voting,” “voluntary establishment of an audit committee,” and “voluntary preparation of corporate social responsibility report” to enhance voluntary adoption of relevant measures by increasing the weight of such indicators. Additionally, a number of indicators related to basic compliance were deleted and some indicators with similar meaning were consolidated; types of some indicators were adjusted to continuously enhance the differentiation effect.
 
The TWSE emphasized that the purpose of the Corporate Governance Evaluation is to gradually guide companies to adopt best practices, and through the evaluation on all the listed companies, those companies who carry good implementation results are identified as excellent examples. This establishes the benchmark and drives companies to augment corporate governance and corporate social responsibility practices and thus improve the global capital market image and Taiwan competitiveness. The 2016 corporate governance evaluation and the results are currently underway and are expected to be announced by the end of April 2017. What will be different from 2014 and 2015 is that the 2016 evaluation results of all evaluated companies will be announced.