The Financial Supervisory Commission (FSC) held the two-day “11th Taipei Corporate Governance Forum” at Howard Civil Service International House on 20-21 Oct, 2016. On the first day of the forum, the acting Chairman of FSC, Dr. Tian-Mu Huang, delivered the opening remarks; Chairman of Chung-Hua Institution for Economic Research, Dr. Sheng-Cheng Hu, and Mr. Bert Chanetsa, Vice Chairman of The Growth and Emerging Markets Committee of IOSCO, also attended as keynote speakers.
The domestic participants for this year’s forum included directors, supervisors, general managers, and other representatives from listed companies, financial institutions, and securities organizations. There were approximately 800 participants, including government officials from concerned departments that promote corporate governance, representatives from academic institutions, and media. International participants included representatives from regulatory authorities, corporate governance research institutions, as well as exchanges and related institutions from Asia and neighboring countries (including representatives from institutions in Thailand, India, Malaysia, Vietnam, Indonesia, Canada, Japan, the USA and Iran).
Chairman of Chung-Hua Institution for Economic Research, Dr. Sheng-Cheng Hu, gave a presentation titled “Implementing Corporate Governance and Social Responsibility for Corporate Value Creation.” As Chairman Hu pointed out, in response to the global trend, Taiwan started to promote legislation and an implementation plan on corporate governance in 2001. Taiwan’s information, communications, and financial industries have invested plenty of resources in promoting corporate governance, resulting in fruitful corporate performance. Successful implementation of corporate governance involves well-functioned internal organizations such as independent directors, auditing committee and compensation committee. Corporate social responsibility should also be another feature of corporate governance. We should pay equal attention to corporate governance and corporate social responsibility for promotion of social welfare, social development, and value creation.
Mr. Bert Chanetsa, Vice Chairman of The Growth and Emerging Markets Committee of IOSCO delivered a keynote speech on the subject of “Trends in Non-Financial Information Disclosure and Global Sustainability Policies”. Taking the example of corporate governance implementation experience in South Africa, Mr. Chanetsa pointed out that companies’ mere disclosure of  financial performance is still inadequate; only through the disclosure of qualitative information such as sustainability and non-financial performance can the corporate performance reports be complete.
Mr. Mitchell Van der Zahn, Managing Consulting Partner of WolfBar ESG Research Partners Singapore, and Ms. Anne Molyneux, Corporate Governance Consultant and Governing Board Member, International Corporate Governance Network (ICGN) were invited to the forum as moderators. They chaired two panel discussions of “Corporate Governance of Family-Controlled Businesses” and “Shareholder Activism”, respectively.
In the first panel discussion “Corporate Governance of Family-Controlled Businesses,” Ms. Yoo-Kyung Park, Director of Sustainability & Governance Asia Pacific, APG Asset Management Asia, Mr. Joseph P.H. Fan, Professor from the Department of Finance & School of Accountancy, the Chinese University of Hong Kong, Mr. Li-Hsuan Cheng, Associate Professor from the Department of Sociology of National Chengchi University, and Mr. Allen Tsai, Founder and Executive Director of Taiwan Institute of Directors, discussed global competition and sustainability challenges that Asian family-owned businesses encounter. Corporate culture inheritance, corporate value enhancement, creation of profits for investors and society, succession plan implementation, and corporate governance issues were also discussed and covered.
Ms. Yoo-Kyung Park presented a comparison on ACGA related corporate governance ratings in Taiwan and South Korea; she also analyzed the corporate governance premium of listed Taiwanese company stock prices. Lastly, the implementation of corporate governance in Taiwan for both of the businesses and regulators were highly praised. Mr. Joseph P.H. Fan presented “Tapping into Market Mechanisms; Strengthening Corporate Governance.” Based on ownership concentration and family control, Professor Fan explained key aspects of corporate governance such as ownership, organization structure, transparency, board of directors, and critical events. Mr. Allen Tsai released statistics on percentage of family-owned businesses in Taiwan, China and Hong Kong, foreign investor’s holdings, business scale, net profit, business pattern, and different generation of the ownerships to offer a clearer understanding of the traits in different markets and implications. Associate Professor Li-Hsuan Cheng took Japanese family-owned businesses as an example and indicated that Japanese company structure transformed from family-owned to professional manager-controlled after WWII. Corporate governance in Japanese family businesses adopted the pattern of cooperation between both family and professional managers, which served as a model for the promotion of corporate governance.
In the second panel discussion “Shareholder Activism,” Ms. Pru Bennett, Director of Corporate Governance in Asia-Pacific, Blackrock, Mr. George Iguchi, Head of Corporate Governance, Nissay Asset Management Corporation, and Mr. Chung-Chun Tsai, Deputy Director General of the Bureau of Labor Funds, emphasized the importance of institutional investors’ involvement in corporate governance. This echoed the promotion of shareholder activism outlined in Taiwan’s “Corporate Governance Roadmap”. Through the influences of institutional investors, the long-term interests of the capital provider and invested companies could be aligned.  Moreover, market participants could promote the culture of stewardship and direct capital to authorized economic operators (AEO), improving the quality of corporate governance in invested companies, creating long-term value for the public, and, at the same time, boosting the development of the investment industry, hence creating an all-win situation. In addition, the origin of Stewardship Principles, the latest developments of international practices, and the application of and outlook for the principles were also discussed.
Professor Jerry Fong presented “Developments in Taiwan—why was the Stewardship Code introduced in Taiwan and its effects.” The Stewardship Code for institutional investors was announced and implemented this year in Taiwan. In the first two months, there are a total of 15 domestic and international institutional investors signed up for it, including Taiwan’s four major funds and National Development Fund. In addition, 605 issuers have adopted e-voting, which shows the prominent achievement of corporate governance. Mr. George Iguchi shared the effects and changes after the implementation of the Stewardship Principles and corporate governance code in Japan. Corporate CEOs are more willing to communicate with investors on issues such as corporate governance and compensation policy, and more willing to declare mid-term plans and integrated reports.
On the Second day of the forum, roundtable discussion was chaired by Dr. Konan Chan, Professor from the Department of Finance, National Chengchi University. Case studies of scandals in well-known international enterprises and global fraud will be conducted in order to promote communication and experience sharing among participants from international securities authorities.