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The 2016 Corporate Governance Evaluation Indicators Are Officially Announced
Publish time：2016-01-04
Today, the Taiwan Stock Exchange (TWSE) announced that the 2016 Corporate Governance Evaluation, which measures five dimensions and includes 103 indicators, will take effect for period from January 1, 2016 to December 31, 2016, with the evaluation results to be released by the end of April, 2017. TWSE emphasized that, different from the 2014 and 2015 Evaluations which only disclosed companies that were ranked in the top 20th and 50th percentile, the 2016 Corporate Governance Evaluation will announced the ranking results of all companies.
TWSE pointed out that the 2016 indicators were amended by referencing 2014 and 2015 evaluation practices and taking suggestions from listed companies and industry experts into consideration. Altogether, twelve new indicators have been added and seven were removed. The total number of indicators increased from 98 to 103.
TWSE explained that, to further enhance the corporate governance level of all listed companies, the threshold of many existing indicators was raised in 2016. Examples include:“minimum director attendance rate at the AGM to be one third,”, “annual reports disclosed at least fourteen days prior to the day of the AGM,” and “overall attendance rate of 80 percent for board meetings.” Every indicator in each corporate governance dimension was also strengthened, such as increasing the weight of providing English information, including English financial reports, annual reports, and meeting agenda handbook in order to improve investor equality. To promote board diversity, indicators such as “any gender ratio of the board members exceeding one third” and “number of executive directors be limited ” were included. In addition, to better protect investors’ interests, indicator such as “both the electronic voting and candidate nomination system for all elections of directors/supervisors adopted in the AGM” was included. These aforementioned amendments were made to improve corporate governance across all aspects.
Furthermore, having functional independent directors is crucial for companies to implement good corporate governance. Therefore, indicators relating to independent directors were also enhanced, such as “independent directors’ completion of annual training”, “good communication between independent directors, internal auditors and external auditors,” and “attendance of independent directors at the AGM.” The scoring method of indicators regarding independent directors was also amended, and thus the weight of such indicators was increased.
TWSE emphasized that the purpose of the Corporate Governance Evaluation is to recognize and reward listed companies that adhere to good corporate governance practices. By doing so, these companies can become the benchmarks for other companies. With such measures, not only corporate governance practices and protection for investors in Taiwan can be massively improved, but also the global image of Taiwan and a well-functioning investment environment can be created. Full efforts are currently underway to complete the 2015 evaluation and the self-evaluation by listed companies is expected to be completed by January 31, 2016. By the end of April 2016, the list for companies that rank in the top fifty percent of 2015 corporate governance evaluation will be announced.
TWSE pointed out that the 2016 indicators were amended by referencing 2014 and 2015 evaluation practices and taking suggestions from listed companies and industry experts into consideration. Altogether, twelve new indicators have been added and seven were removed. The total number of indicators increased from 98 to 103.
TWSE explained that, to further enhance the corporate governance level of all listed companies, the threshold of many existing indicators was raised in 2016. Examples include:“minimum director attendance rate at the AGM to be one third,”, “annual reports disclosed at least fourteen days prior to the day of the AGM,” and “overall attendance rate of 80 percent for board meetings.” Every indicator in each corporate governance dimension was also strengthened, such as increasing the weight of providing English information, including English financial reports, annual reports, and meeting agenda handbook in order to improve investor equality. To promote board diversity, indicators such as “any gender ratio of the board members exceeding one third” and “number of executive directors be limited ” were included. In addition, to better protect investors’ interests, indicator such as “both the electronic voting and candidate nomination system for all elections of directors/supervisors adopted in the AGM” was included. These aforementioned amendments were made to improve corporate governance across all aspects.
Furthermore, having functional independent directors is crucial for companies to implement good corporate governance. Therefore, indicators relating to independent directors were also enhanced, such as “independent directors’ completion of annual training”, “good communication between independent directors, internal auditors and external auditors,” and “attendance of independent directors at the AGM.” The scoring method of indicators regarding independent directors was also amended, and thus the weight of such indicators was increased.
TWSE emphasized that the purpose of the Corporate Governance Evaluation is to recognize and reward listed companies that adhere to good corporate governance practices. By doing so, these companies can become the benchmarks for other companies. With such measures, not only corporate governance practices and protection for investors in Taiwan can be massively improved, but also the global image of Taiwan and a well-functioning investment environment can be created. Full efforts are currently underway to complete the 2015 evaluation and the self-evaluation by listed companies is expected to be completed by January 31, 2016. By the end of April 2016, the list for companies that rank in the top fifty percent of 2015 corporate governance evaluation will be announced.