The Taiwan Monthly

Feb. 2021

Corporate Governance

The 2021 Corporate Governance Evaluation Indicators are officially announced

The Taiwan Stock Exchange (“TWSE”) has officially announced the 2021 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 this year’s revision is based on the 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 states 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 will be 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 companies who provide annual reports or annual financial reports 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 promote 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.

 

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, in which many measures are included in the corporate governance evaluation indicators to 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 guide companies to adopt 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 and 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 2020 Corporate Governance Evaluation is actively under way and the evaluation results are expected to be published by the end of April 2021.

 

For further inquiries, please contact Ms. Hsieh at 1124@twse.com.tw