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The 2021 (8th Round) Corporate Governance Evaluation Indicators Are Officially Announced

Publish time:2020-12-30

The Taiwan Stock Exchange (“TWSE”) has officially announced the 2021 (8th Round) Corporate Governance Evaluation. The system consists of four dimensions and 79 indicators, and will be effective from January 1, 2021 to December 31, 2021. The 2021 evaluation results are expected to be announced by the end of April 2022.

The TWSE points out that the revision of the 8th evaluation refers to the significant trends, regulations and policies of corporate governance in Taiwan and abroad, as well as the feedback from evaluated companies and the CG eco-systems. Three indicators were removed, nine indicators revised and seven indicators types adjusted in order to continuously drive the corporate governance culture of enterprises.

The TWSE further stated that in order to speed up the bilingualization of Taiwan's capital market and enhance its international competitiveness, there are seven indicators included in the evaluation regarding information provisions in English, and many of them are encouraged in the form of differentiation in point granting. For example, in this revision, bonus points are given to "disclosing interim financial reports in English within two months after the deadline for reporting the Chinese version" and extra points will be given to the company when it provides its annual report or annual financial report in English 16 days before the AGM.

In addition, in order to develop sustainable financing, encourage enterprises to invest in the environment, society and corporate governance (“ESG”) and in accordance with the Corporate Governance 3.0 - Sustainable Development Roadmap, Green Finance Action Plan 2.0 and Capital Market Roadmap (2021~2023), issuing or investing in sustainability financial instruments where the proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social Projects is included in the scope of extra point indicators.

The TWSE articulated that in order to continuously deepen Taiwan's corporate governance and enhance sustainable corporate development, the Financial Supervisory Commission has recently announced the Corporate Governance 3.0 - Sustainable Development Roadmap, where many measures regarding corporate governance evaluation indicators encourage companies to adopt them. Listed companies may prepare in advance by referring to the implementation schedule.

The TWSE emphasizes that the purpose of the Corporate Governance Evaluation is to lead companies to the goal of best practice in corporate governance through the content of the indicators, and it also serves as a mechanism for healthy competition among the companies listed on the TWSE or TPEx. The ultimate goal is to improve the image of these companies and make them more competitive in the global capital market. At present, the Corporate Governance Evaluation for 2020 (the 7th round) is actively under way and the evaluation results are expected to be published by the end of April 2021.