The Securities and Futures Institute last week announced this year’s corporate governance evaluation results with rankings for all companies listed on the Taiwan Stock Exchange and the Taipei Exchange. Although Taiwan has made progress in corporate governance, more effort is needed to protect the rights and interests of investors, improve how boards of directors function and implement corporate social responsibility.
This is particularly true in the financial industry, as the number of financial companies in the top 5 percent of the annual evaluation has fallen from 11 last year to five this year. King’s Town Bank, China Life Insurance Co, Fubon Financial Holding Co, Cathay Financial Holding Co and E.Sun Financial Holding Co are the only five financial companies out of a total of 43 companies that made the top 5 percent this year, with King’s Town and Cathay Financial being new entries.
Eight financial firms have slipped from the top 5 percent this year, including state-run First Financial Holding Co and Hua Nan Financial Holding Co, because of their poor internal controls in the high-profile scandal involving Ching Fu Shipbuilding Co, as well as state-controlled Chang Hwa Commercial Bank due to a kickback scandal involving two executives at its Dongguan branch in China.
Among the action plans proposed by the Financial Supervisory Commission (FSC) in its Corporate Governance Roadmap 2018-2020 released in March, are the introduction of corporate governance professionals to support boards of directors by providing necessary information and assistance; the implementation of a candidate nomination system for the election of directors and supervisors; and the promotion of qualitative indicators for corporate governance evaluations.
The FSC likely means well by proposing such ideas to improve how boards are governed and keep them from being reduced to a mere rubber stamp for business owners or major stakeholders.
The proposal to provide corporate governance professionals, for instance, is a sensible move that would help firms avoid potential governance risks by moving toward the separation of ownership and management, especially in family businesses.
Based on the FSC’s proposal, financial institutions such as banks, insurance companies and securities brokerages, as well as listed companies with paid-in capital of NT$10 billion (US$336.5 million) or more, would be from next year required to set up positions for the corporate governance professionals within their organizations. People qualifying for the positions would include lawyers and accountants, as well as managers with legal and financial experience.
Being different from audit and compliance officers, corporate governance professionals would need to have strong integration and coordination abilities to establish an effective corporate governance network fortified by international gatekeepers, such as audit and compliance officers; external supervisors, such as accountants and credit rating agencies; and major stakeholders, including employees and business partners.
Unlike audit and compliance officers, who ensure that companies do not engage in unlawful activities, corporate governance professionals would design and develop a new corporate culture with better governance built into it.
Nonetheless, the FSC still needs to address local businesses’ concerns that the cost of compliance would go up markedly.
The FSC also needs to consider whether the corporate governance professionals should be granted a higher status and have sufficient power to participate in corporate affairs, and most importantly, how they would stand up to pressure from management or controlling shareholders.
Thus far, the FSC has been moving in the right direction, but it should gather more feedback from experts and communicate more with businesses.
A 50-year-old on Wednesday last week died while under anesthesia at a Taipei cosmetic clinic shortly after undergoing a penis enlargement procedure. The surgeon was arrested for suspected medical malpractice, again bringing to the surface shortcomings in the regulation of cosmetic medicine. Media reports said the clinic owner and surgeon, surnamed Ting (丁), was previously convicted of negligent homicide for a postsurgical death and had been charged with coercion and aggravated assault after allegedly stopping a patient from calling for an ambulance. He had also been fined for failing inspections and had allegedly permitted people without medical licenses to assist
It was most annoying last week to read Chairman Xi Jinping’s (習近平) fulsome encomium to the People’s Liberation Army during the Eightieth Anniversary celebrations of victory over Japan in World War II. Comrade Xi’s soaring rhetoric was stuffed with “martyrs, sacrifice, solemnity and unwavering resolve” in praise of the “Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War.” His aspirations overflowed with “world peace” and love of the United Nations, of which China is a founding member. The Liberation Army Daily said that every word from General Secretary Xi Jinping “resounded in his powerful voice, illuminating the
The Chinese Communist Party (CCP) will stop at nothing to weaken Taiwan’s sovereignty, going as far as to create complete falsehoods. That the People’s Republic of China (PRC) has never ruled Taiwan is an objective fact. To refute this, Beijing has tried to assert “jurisdiction” over Taiwan, pointing to its military exercises around the nation as “proof.” That is an outright lie: If the PRC had jurisdiction over Taiwan, it could simply have issued decrees. Instead, it needs to perform a show of force around the nation to demonstrate its fantasy. Its actions prove the exact opposite of its assertions. A
An American Institute in Taiwan (AIT) spokesperson on Saturday rebuked a Chinese official for mischaracterizing World War II-era agreements as proving that Taiwan was ceded to China. The US Department of State later affirmed that the AIT remarks reflect Washington’s long-standing position: Taiwan’s political status remains undetermined and should only be resolved peacefully. The US would continue supporting Taiwan against military, economic, legal and diplomatic pressure from China, and opposes any unilateral attempt to alter the “status quo,” particularly through coercion or force, the United Daily News cited the department as saying. The remarks followed Chinese Minister of Foreign Affairs
RSS