The Taiwan Stock Exchange (TWSE) announced that it worked with the Taipei Exchange and has held three Corporate Governance Evaluation educational seminars in Taipei, Taichung, and Kaohsiung since March 1, 2018. The seminars offer information on the indicators and guidance in the latest Corporate Governance Evaluation, improvement advice on annual report disclosure, and adoption practices of electronic voting. A large number of listed company representatives attended the seminars and many questions were asked. In particular, companies paid attention to issues of board performance evaluation, release of English financial statements, appointment of full-time corporate governance personnel, plus establishment of adequate corporate social responsibility and governance framework.
　
The TWSE stated that the Corporate Governance Evaluation system has been evolving constantly in content and scoring criteria since its implementation in 2014. Additional emphasis was placed on the new qualitative indicators during the seminars, which attracted more attention and questions. For example, companies are encouraged to appoint independent directors in the first year. Given all listed companies had appointed independent directors in 2017, a number of indicators have been added to guide companies to take the next step to enhance the effectiveness of independent directors. These include disclosure of all opinions raised by independent directors regarding major proposals presented at board of directors’ meetings and the company’s subsequent handling in annual reports, communication with CPAs and internal auditors through an audit committee or other meetings, and the presence of at least one independent director at each board meeting.
　
The TWSE also mentioned that differentiated scoring was added to the 2018 indicators. One of the new scoring types is the "AA Questions – higher weight in scoring", which evaluate excellent examples of corporate governance practices that may still be relatively advanced for companies in Taiwan. Additional points will be awarded for adoption of a candidate nomination system for election of all directors or supervisors, external board performance evaluation once every three years, release of audited financial reports within two months from the end of a fiscal year, and availability of financial statements in English. Furthermore, the new "A+ Questions – scoring by level of practice" award additional points for different degree of implementation. For example, basic points are awarded for disclosing emission of carbon dioxide or other greenhouse gases in the last two years; and additional points will be awarded if the disclosure is certified by a third party. Additional points are also available for voluntary implementation of an audit committee, disclosure of compensation for individual directors and supervisors, disclosure of non-audit remuneration, and compilation of corporate social responsibility reports. The purpose of the additional points is to offer more incentive to companies adopting higher practices in corporate governance to fulfill their corporate social responsibilities. Companies are advised to start planning early.
　
The TWSE would like to guide listed companies further along a stronger understanding of the new evaluation indicators, annual report disclosure, and electronic voting. It aims to help companies strengthen their corporate governance practices, thereby taking corporate governance in Taiwan to the next level. In addition to the three seminars earlier, two more were held in Hsinchu and Taipei on March 8 and March 13, respectively. The Q&A from the sessions will be included in the disclosure examples and score guidance for the 2018 evaluation system, which are expected to be available on the Corporate Governance Center and the Securities & Futures Institute website by the end of March.