The Taiwan Monthly
ESG
Listed companies continue to improve corporate governance in 2020
In order for listed companies to keep pace with the times and international standards, the Taiwan Stock Exchange (hereinafter “TWSE”), in line with the Corporate Governance Roadmaps at all stages issued by the Financial Supervisory Commission, has been conducting the Corporate Governance Evaluation, promoting various new regulations, and is committed to guiding enterprises to strengthen corporate governance.
Among the measures, the Corporate Governance Evaluation shoulders the mission of shaping Taiwan's corporate governance culture, and has entered the seventh year since implementation in 2014. Through various evaluation indicators of different categories such as protecting shareholders’ rights and interests and treating shareholders equitably, enhancing the board composition and operation, increasing information transparency and putting corporate social responsibility into practices, enterprises are prompted to closely monitor corporate governance and corporate social responsibility, and are guided to voluntarily adopt best practices. As of June 30, multiple statistics show that the quality of corporate governance of listed companies has continued to improve, indicating that the promotion over the years has achieved remarkable results.
According to the TWSE, the nomination system shall be adopted for the election of directors and supervisors of all listed companies as of 2021. As of June 30, a total of 926 TWSE-listed companies have stipulated in their articles of association to adopt the nomination system for their election of directors and supervisors, an increase of 21% from 764 in 2019 and a significant increase of 361% from 201 in 2014. In addition, in line with the implementation of electronic voting, voting by poll is adopted for the annual general meetings of all listed companies, and 920 TWSE-listed companies filed the results on the same day the annual general meetings were held, an increase of 9.6 times compared with 87 in 2014.
In the aspect of “composition and operation of the board of directors”, all listed companies set up independent directors in 2017, and non-financial listed companies with a paid-in capital of less than NT$2 billion are required to set up an audit committee to replace supervisors from 2020 onward. By the end of June, 790 TWSE-listed companies had established an audit committee, accounting for more than 80% of the total, an increase of 3.6 times from 170 companies in 2014.
In the aspect of “information disclosure”, the number of TWSE-listed companies filing financial reports for the previous year by the end of February 2020 was 98, an increase of 13% from that in 2019, and 345% from 22 companies in 2014. In line with the New Corporate Governance Roadmap(2018-2020), listed companies with a paid-in capital of NT$10 billion or more or with a foreign shareholding ratio of more than 30% are required to provide corporate information in English from 2019 onward; the number of TWSE-listed companies which provided an English version of their meeting handbook and annual report for the shareholders' meeting and annual financial statements this year are 434, 388 and 434 respectively, which have multiplied from those in 2014 and accounted for more than 40% of the TWSE-listed companies.
In the aspect of “non-financial information disclosure”, as of June 30, a total of 245 TWSE-listed companies have filed their corporate social responsibility report (CSR report) for 2019. Among them, 208 companies were mandated by the regulation, 37 were voluntary. Pursuant to the rule there were also 61 TWSE-listed companies that can postpone their filing until September 30. It is estimated that by the end of 2020, about 375 companies will file their CSR report for 2019.
The TWSE stressed that good corporate governance is the most important foundation for a sound capital market, and the key to attracting investors for long-term investment. In the future, the TWSE will continue to promote relevant corporate governance measures to strengthen the competitiveness of listed companies, and improve the quality of the overall capital market. Relevant corporate governance statistics can be found in the database of the Corporate Governance Center (https://cgc.twse.com.tw/).
For further inquiries, please contact Ms. Lee at 1008@twse.com.tw
|
Aspect |
Item/number of companies |
2020* |
% of change in two years |
% of change in seven years |
2019 |
2018 |
2017 |
2016 |
2015 |
2014 |
|
Protecting Shareholder Rights and Interests / Treating Shareholders Equitably |
Adoption of a nomination system for directors and supervisors in their Articles of Association |
926 |
21% |
361% |
764 |
669 |
583 |
424 |
322 |
201 |
|
Disclose the numbers of votes cast "For" and "Against" as well as the number of "Abstentions" on each motion reported on MOPS on the same day of the AGM |
920 |
3% |
957% |
890 |
887 |
735 |
578 |
354 |
87 |
|
|
Enhancing Board Composition and Operation |
Set up an Audit Committee |
790 |
14% |
365% |
696 |
586 |
474 |
327 |
243 |
170 |
|
Information disclosure |
Listed companies reporting their audited annual financial results within two months of the end of the accounting period |
98 |
13% |
345% |
87 |
82 |
81 |
70 |
47 |
22 |
|
Filing English Financial Reports |
434 |
11% |
1569% |
391 |
144 |
115 |
93 |
35 |
26 |
|
|
Filing English Annual Reports |
388 |
8% |
385% |
360 |
196 |
177 |
144 |
107 |
80 |
|
|
Filing an English Meeting Handbook at the AGM |
434 |
9% |
443% |
398 |
267 |
232 |
183 |
131 |
80 |
|
|
Non-financial information disclosure |
Filing CSR Reports (375 companies are expected to complete the filing before the end of the year.) |
245 |
- |
43% |
359 |
352 |
342 |
275 |
267 |
171 |
|
*Data of 2020 as of 2020, June 30 |
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