The Financial Supervisory Commission yesterday gave an overview of upcoming changes aimed at bolstering corporate governance through tougher regulation of major stakeholders of financial institutions.
The commission is set to tighten restrictions, barring responsible persons at financial institutions from holding concurrent key positions at other financial firms.
“The change addresses potential conflicts of interest when key people at financial companies are knowledgeable about and actively involved in the management of competitors in the industry,” FSC Chairman Wellington Koo (顧立雄) told a news conference in Taipei.
To ensure fair competition and to foster innovation in the financial sector, restrictions on concurrent engagements would be extended to responsible people at banks and financial holding companies, as well as interested parties, such as spouses and second-degree relatives.
For instance, Sylvia Peng (彭雪芬), spouse of Taishin Financial Holding Co (台新金控) chairman Thomas Wu (吳東亮), would be barred from concurrently serving as a director on the board of Shin Kong Financial Holding Co (新光金控) on behalf of a family-owned investment holding company, the commission said.
To improve oversight, financial companies that own assets worth NT$1 trillion (US$33.44 billion) and have a five-member board of directors would be required to give at least three seats on the board to industry experts, Koo said, adding that for every three seats added to the board of directors, one must be allocated to an industry expert, up from one in every four.
If a board of directors has more than 13 seats, at least five must be occupied by industry experts, to ensure diversity among directors and supervisors, Koo said.
The change would make it more difficult for companies to swap out their board appointees at investee companies, Koo said, adding that having a highly professional board of directors that is not subject to frequent shuffles would go a long way toward improving governance and compliance.
However, the change would not be imposed on state-run financial companies, as they are under additional supervision by the legislature and the government, the commission said.
Changes to the rules on concurrent engagements are expected to come into force by July 1 next year, it said.
Meanwhile, the commission said it would also tighten controls on proxy solicitation following a series of high-profile proxy fights over the past year.
Proxy solicitors must be a shareholder in the target company for at least one year and hold a stake of more than 0.005 percent of shares in circulation, up from a previous requirement of 0.002 percent, Koo said, adding that the change would take effect on Jan. 1 next year.
“The use of proxy solicitation has harmed governance as it allows major shareholders to yield influence that is disproportionate to their ownership of a company,” Koo said.
On Tuesday, US President Donald Trump weighed in on a pressing national issue: The rebranding of a restaurant chain. Last week, Cracker Barrel, a Tennessee company whose nationwide locations lean heavily on a cozy, old-timey aesthetic — “rocking chairs on the porch, a warm fire in the hearth, peg games on the table” — announced it was updating its logo. Uncle Herschel, the man who once appeared next to the letters with a barrel, was gone. It sparked ire on the right, with Donald Trump Jr leading a charge against the rebranding: “WTF is wrong with Cracker Barrel?!” Later, Trump Sr weighed
SinoPac Financial Holdings Co (永豐金控) is weighing whether to add a life insurance business to its portfolio, but would tread cautiously after completing three acquisitions in quick succession, president Stanley Chu (朱士廷) said yesterday. “We are carefully considering whether life insurance should play a role in SinoPac’s business map,” Chu told reporters ahead of an earnings conference. “Our priority is to ensure the success of the deals we have already made, even though we are tracking some possible targets.” Local media have reported that Mercuries Life Insurance Co (三商美邦人壽), which is seeking buyers amid financial strains, has invited three financial
HEADWINDS: Upfront investment is unavoidable in the merger, but cost savings would materialize over time, TS Financial Holding Co president Welch Lin said TS Financial Holding Co (台新新光金控) said it would take about two years before the benefits of its merger with Shin Kong Financial Holding Co (新光金控) become evident, as the group prioritizes the consolidation of its major subsidiaries. “The group’s priority is to complete the consolidation of different subsidiaries,” Welch Lin (林維俊), president of the nation’s fourth-largest financial conglomerate by assets, told reporters during its first earnings briefing since the merger took effect on July 24. The asset management units are scheduled to merge in November, followed by life insurance in January next year and securities operations in April, Lin said. Banking integration,
Artificial intelligence (AI) chip designer Cambricon Technologies Corp (寒武紀科技) plunged almost 9 percent after warning investors about a doubling in its share price over just a month, a record gain that helped fuel a US$1 trillion Chinese market rally. Cambricon triggered the selloff with a Thursday filing in which it dispelled talk about nonexistent products in the pipeline, reminded investors it labors under US sanctions, and stressed the difficulties of ascending the technology ladder. The Shanghai-listed company’s stock dived by the most since April in early yesterday trading, while the market stood largely unchanged. The litany of warnings underscores growing scrutiny of