Corporate Governance
In order to reinforce and supervise the fiduciary obligation of enterprise operators, all types of management mechanisms related to corporate governance are promoted in the Republic of China. Through the establishment of relevant legislations and self-disciplinary charters as the basis for the companies’ compliance, the objective is to procure that companies manage and supervise their finances and businesses and improve information disclosure in a self-governance manner, maintaining the interest of the shareholders, employees, stakeholders and the society while maximizing the profits.
Taiwan CG Environment
The promotion and implementation of corporate governance are dependent on the cooperation among the government, non-governmental organizations and the companies. This Commission is the authority that is responsible for the legislative environment of corporate governance by companies with stocks listed on the Taiwan Stock Exchange or the GreTai Securities Market. The Taiwan Stock Exchange or the GreTai Securities Market have also carried out establishment of standards, supervision and execution in a self-disciplinary regulatory manner. Other non-governmental organizations such as the Securities & Futures Institute, Taiwan Corporate Governance Association and the Securities and Futures Investors Protection Center also organize seminars, evaluations, appraisals or actually participate as shareholders in shareholders meetings or supervise the operations by companies, using all measures to jointly improve the companies’ governance environment.
Governance Organization
Taiwan Securities Markets:
1. Taiwan Stock Exchange
2. GreTai Securities Market
Non-Profit Organization:
1. Securities and Futures Investors Protection Center
2. Securities and Futures Institute
3. Taiwan Corporate Governance Association
Regulations and Principles
The central competent authority of the Company Laws of the Republic of China is the Ministry of Economic Affairs. At the municipal level, the competent authority is the municipal government. Securities issuing public companies are governed by the Securities and Exchange Act of which the competent authority is this Commission. Regarding the management organ of stock limited companies, the Company Laws currently provide that the board of directors is the business execution authority, the supervisors supervise the execution of the businesses by the board of directors and the shareholders’ meeting is the organ of the highest level representing the intention of the company. Also, companies that have issued stocks in accordance with the Securities and Exchange Act should establish either an audit committee or put in place supervisors. However, this Commission may order the establishment of an audit committee in lieu of supervisors depending on the size, business nature and other necessary situations of the company.
Ethical Corporate Management
The global financial crisis puts in focus the importance of ethical operation by companies and enterprises. In addition to procuring the establishment of the code of ethical operation for public companies by relevant securities authorities, this Commission also organizes seminars, symposiums or training sessions every year to promote the responsibilities of directors (including independent directors) and to provide companies with reminders of possible forms violations of regulations or illegalities as reference to corporate management.
Corporate Social Responsibility
In order to consolidate the consensus of ethical operation by public companies, reinforce corporate governance and promote enterprise social responsibilities, the Commission procures that the Taiwan Stock Exchange and the GreTai Securities Market organize relevant ad hoc events such as the “Seminar for Ethical Operation and Enterprise Corporate Responsibility”, for which enterprise owners are invited to share relevant practical understanding and results of their experiences, leading enterprises to gradually implement the ideology of ethical operation and fulfillment of enterprise social responsibilities.