The Financial Supervisory Commission (FSC) on Tuesday released its Corporate Governance Roadmap, encouraging publicly listed firms to improve their corporate governance and work toward sustainable development.
Under the roadmap, the regulator is to amend laws from next year to 2023.
Based on the plans outlined in the roadmap, the commission would tighten regulations on listed companies’ independent directors beginning in 2024.
All financial firms and listed companies with paid-in capital of at least NT$10 billion (US$333.8 million) would be required to have independent directors make up at least one-third of their board, Securities and Futures Bureau Deputy Director Sam Chang (張振山) told a news conference at the commission’s headquarters in New Taipei City.
Such companies are currently required to have at least two independent directors, and the number of independent directors should not be less than one-fifth of the total number of directors, Chang said.
Among the 165 firms that would be subject to the new requirements, 66 — including 25 financial firms — already meet the new rules, Chang said.
The other 99 firms would need to appoint more independent directors in the next few years, he added.
Companies that plan to launch initial public offerings from 2024 would also be required to comply with the new rules, he said.
All listed firms, excluding financial firms, would have to name new independent directors if half of them have served more than three terms in office, or nine years, Chang said.
The objective is to keep independent directors from compromising their duties if they are in their position for too long, he said.
However, financial firms would be required to replace all of their independent directors after they serve more than three terms, as it is easier for such firms to find qualified candidates than it is for manufacturing and non-financial firms, he said.
Meanwhile, starting in 2022, all listed companies would be required to reveal details about their board members, including the gender ratio and average age in the boardroom, as a way to encourage companies to broaden their diversity, Chang said.
The commission is also considering asking listed firms that have been lagging to disclose all remunerations for their directors and supervisors by 2022, he said.
At present, listed firms that have reported losses over the past three years, whose non-managerial employees’ average annual salary is lower than NT$500,000 and those that rank poorly in corporate governance evaluations are required to disclose their remunerations.
“The new criteria have not been finalized, but we think that more companies disclosing such information would help lift corporate transparency,” Chang said.
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