The Financial Supervisory Commission (FSC) yesterday said it would amend regulations to tighten the process of removing chairpersons at publicly listed companies.
In particular, the commission said it would ban directors from proposing the dismissal or removal of a chairperson through an extraordinary motion.
The Regulations Governing Procedures for Board of Directors’ Meetings of Public Companies (公開發行公司董事會議會辦法) stipulate that board members should be notified at least seven days in advance about important matters they plan to discuss in a board meeting, except in cases of emergencies or for other legitimate reasons.
Photo: Kelson Wang, Taipei Times
The commission said it would tighten regulations to prohibit any director from proposing important matters via a motion using an emergency as an excuse.
“Board directors should have enough time to consider matters that would affect the companies’ operations considerably,” the commission said.
The amendment would take effect after 60 days for public review, it said.
Companies that contravene the rules would face a fine of NT$240,000 to NT$4.8 million (US$8,127 to US$162,547), and their removal or appointment of a new chairperson would not be approved by the Ministry of Economic Affairs, the commission said.
The commission’s move follows the removal of the chairperson of Solar Applied Materials Technology Corp (光洋科) via an extraordinary motion at a board meeting in November last year.
Former chairman Ma Chien-yung (馬堅勇) of Solar Applied, a supplier of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), was replaced by Taiwan Steel Group (台灣鋼鐵集團) chairman Wang Chiung-fen (王炯棻), who was favored by some activist directors, local media reported.
Activist directors said at the time that it was a legitimate strategy to dismiss Ma by a motion, but the ministry in December rejected the motion, saying the case was not an emergency.
“We have seen several companies dismiss their chairperson through extraordinary motions in regular board meetings, so we have to decided to block this method. Such an important matter should not be raised at the last minute and directors should not be ambushed with such a proposal,” Securities and Futures Bureau Chief Secretary Kao Ching-ping (高晶萍) told the Taipei Times by telephone.
The proposed rules would also apply to extraordinary board meetings, Kao said.
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