The Financial Supervisory Commission (FSC) hosted the 10th Taipei Corporate Governance Forum (TAICGOF), a two-day event, at the Howard Civil Service International House. Mr. Ming-Chung Tseng, Chairman of the FSC, made the opening remarks. In addition, Mr. Sush-Der Lee, Chairman of the Taiwan Stock Exchange (TWSE), and Mr. Jamie Allen, Secretary General of the Asian Corporate Governance Association, both delivered keynote speeches on corporate governance. The FSC arranged two panels for important corporate governance topics.
Forum participants from domestic organizations included directors, supervisors, general managers, and other industry representatives from listed companies and financial institutions. They were joined by government officials involved in the promotion of corporate governance, and representatives from research institutions and the media. In all, there were approximately 700 participants. Foreign institutions and authorities were represented, as were various international CG organizations, listed companies, and neighboring Asian stock exchanges.
Chairman Tseng of the FSC stated that the government has been working since 1998 to improve corporate governance, and launched the "Corporate Governance Roadmap" in 2013. As part of the effort to implement the Roadmap, the FSC oversaw the establishment of the Taiwan Stock Exchange Corporate Governance Center to coordinate the use of CG resources in Taiwan and cultivate a stronger CG culture. With international development trends moving from West to East, and with Asian economies maturing, it is necessary to improve CG.
Chairman Lee of the TWSE delivered a keynote speech on the subject of “Taiwan Corporate Governance Roadmap and Prospects.” Mr. Lee stated that Taiwan’s corporate governance has been developing for some time. Moreover, last year, the FSC adopted the "Corporate Governance Roadmap 2013," which aims to encourage corporations and investors to actively participate in corporate governance reforms. Chairman Lee stated that good corporate governance can produce value for companies and shareholders alike. If companies, “serve their customers, take care of employees, and reward shareholders,” they will create three “wins” and achieve three “benefits,” namely, “economic growth, public welfare, and environmental sustainability.”
Mr. Jamie Allen discussed “Recent Asian Corporate Governance Developments.” Mr. Allen stated that Taiwan’s government has worked hard in the past two years, and its success has been reflected in Taiwan’s improved scores in CG Watch 2014. In the past 15 years, there have been a lot of corporate governance reforms in Asia, but there is still room for further improvement. For example, regulations could be brought more closely in line with global standards to create a fair investment environment.
Ms. Jennifer Wang, Vice Chairperson of the Financial Supervisory Commission, and Mr. Jamie Allen, led discussions on “Trends in Non-Financial Information Disclosure and Global Responsible Investment” and “Corporate Governance Trends from the Perspective of Investors,” respectively.
In the first panel discussion, Dr. Hans-Christoph Hirt, Executive Director of Responsible Investment and Stewardship at Hermes Equity Ownership Service Limited, pointed out that the institutional investor focuses on environmental, social, and corporate governance (ESG) when they invest in companies. Therefore, he suggested that companies disclose related information in the integrated annual report. Mr. Yoshiaki Shin, Senior, Advisor of the Mitsui Sumitomo Insurance Company, discussed trends in non-financial information disclosure and responsible investments in Japan. With regard to non-financial information disclosure, CG reports including CSR activities are required by stock exchanges. There has been an increasing trend toward integrated reports among the top 500 companies in Japan since 2011. Dr. Eugene Chien, Chairman of the Taiwan Institute for Sustainable Energy, stated that the international trend is to have sustainability reporting, and Taiwan’s government asked specific sectors to write and announce CSR reports. Moreover, Dr. Louis Chen, Professor at the Graduate Institute of Intellectual Property, National Taipei University of Technology, pointed to a 2013 survey by Ernest & Young of 163 institutional investors which showed that: 1. non-financial information plays an important role in the investment decision-making process, and 2. the preparation of ESG reports can minimize risk.
In the second panel discussion, Ms. Anne Molyneux, Director of CS International and a representative of the International Corporate Governance Network, noted that the institutional investor generally sees CG as a means to an end and recognizes that good CG could promote company performance and accountability. Moreover, she pointed out what kind of information investors are concerned with and how to promote a company’s CG quality. She stressed that companies need a deeper level of dialogue with shareholders who have an economic interest in their long-term performance.
Mr. Bruce Babcock, Head, Business Development Global Proxy at Broadridge Financial Solutions, spoke on global trends in proxy voting, and discussed shareholder rights in the AGM. Mr. Sherman Lin, President of the Taiwan Depository & Clearing Corporation, described the adoption of E-voting in Taiwan, which has been overseen by the FSC since 2012. There are now 208 companies using E-voting here. Dr. Jerry G. Fong said that three fundamental principles are essential for the establishment of an effective corporate governance regime—accountability, transparency and engagement. E-voting is a common model in many countries, and thanks to the ongoing development of internet technology, virtual shareholder meetings have gradually come to be accepted in many countries.
On November 21st, the forum took the form of roundtable talks moderated by Dr. Soushan Wu, Chairman of the GreTai Securities Market, to discuss “Post-Crisis Corporate Governance Reforms and Enforcement among APEC Economies.” Each representative shared their opinions based on the corporate governance research papers and questionnaires circulated among APEC members. In addition, Dr. Konan Chan discussed individual cases with the participants. Participants thoroughly enjoyed the learning and sharing that took place, and developed a deeper understanding of CG issues during the two-day forum.