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“Kangxi is Gone, but Corporate Governance has Come” - An Alternative Interpretation of Corporate Governance
Corporate governance is the foundation of corporate sustainability, as well as the most important key to having a robust capital market. In compliance with the Financial Supervisory Commission’s (FSC) “2013 Corporate Governance Roadmap”, the Taiwan Stock Exchange (TWSE) established a Corporate Governance Center to promote significant measures such as the corporate governance evaluation system. TWSE also launched a Chinese/English website designed specifically to increase the quality of corporate governance in Taiwan. Over the past two years, a number of statistics show that overall, TWSE-listed companies managed to achieve the initially expected results in the implementation of processes for the protection of shareholders' equity, equal treatment of shareholders, enhancement of Board Composition and Operation, improvement of information transparency, and the fulfillment of corporate social responsibility (CSR). For example, the number of companies that have adopted a nomination system for directors and supervisors or poll voting has increased, the average filing date of meeting materials prior to the day of the AGM has increased, the amount of audit committees and independent directors established has substantially increased, the number of companies that provide English information has grown, and the number of companies that filled CSR reports have also increased significantly.
Category | Item/Number of companies | 2015 | 2014 | Growth | Growth % |
Protecting Shareholder Rights and Interests/ Treating Shareholders Equitably |
Adoption of a nomination system for directors and supervisors in their Articles of Association | 321 | 201 | 120 | 60% |
Adoption of poll voting at the AGM | 393 | 257 | 136 | 53% | |
The average filing date of English Meeting Handbook prior to the day of the AGM | 28.66 | 25.70 | 2.96 | 12% | |
Enhancing Board Composition and Operation | Set up the Audit Committee-2015.10 | 239 | 170 | 69 | 41% |
Set up the independent directors -2015.10 | 634 | 488 | 146 | 30% | |
Increasing Information Transparency | Filing English AGM Notices | 133 | 73 | 60 | 82% |
Filing English Meeting Handbook at the AGM | 131 | 80 | 51 | 64% | |
Disclosure of non-financial information | Filing CSR Reports-estimated to 2015/12/31 | 230 | 171 | 59 | 35% |
Note: 2015 (As of June 2015) |
The promotion for corporate governance evaluation has played an indispensable role in the aforementioned outcomes, and the evaluation system is also highly valued by various TWSE- and TPEx-listed companies. 5 educational seminars for the second evaluation were held across northern, central, and southern Taiwan in March of this year. In the second half of this year, TWSE held an additional 6 educational seminars in response to the requests of TWSE- and TPEx-listed companies. The 11 seminars together attracted nearly 4,000 participants. From the enthusiasm business representatives have shown in participating, it can be expected that the evaluation system will be successful in prompting TWSE- and TPEx-listed companies to strengthen their efforts in the continuing implementation of good corporate governance practices.
TWSE states that the promotion of corporate governance is not limited to TWSE- and TPEx-listed companies and their practitioners. Investors and potential market participants are also important targets in the promotion of better corporate governance. By specially integrating the current hot topic of “Here Comes Kangxi” going off air after a 12-year broadcast, TWSE has invited graduate students from the Department of Accounting of National Taipei University to perform a play at the “2015 Stock Market Expo”. The play presents in theatre form the experiences and corporate governance characteristics of the 12 TWSE- and TPEx-listed companies that shared their experiences at corporate governance promotions (ScinoPharm, United Microelectronics Corporation, Compal Electronics, Cathay Holdings, First Financial Holding, Global Unichip, Syn-Tech, Win Semiconductors, PAHSCO, Coretronic, Poya and Concord Securities) to the effect of bringing greater attention to the promotion of corporate governance. The performance title of “Kangxi is Gone, but Corporate Governance has Come” also echoes the widespread attention from multiple industries the promotion of corporate governance has gained. TWSE hopes to provide an impressive learning experience for TWSE- and TPEx-listed companies, securities firms, and other market participants and investors seeking to learn more about corporate governance. TWSE also expects that this will also create opportunities for the interaction and exchange of experiences. This performance will take place on 2 p.m. of December 20 at the Taipei World Trade Center Exhibition Hall 3. Furthermore, on December 19 and 20, there will be established at the expo a platform for face-to-face interaction between all market participants and investors. This will allow investors to understand various securities and financial products, as well as overall capital market operations and the services provided by peripheral units of securities and futures. Entrance is free and open to the public.