To promote implementation of the key measures set out in the “Corporate Governance Roadmap (2018-2020)”, the FSC made amendments to the 2 aforementioned Regulations in reference to the regulations issued by leading securities exchanges from around the world and the recommendations set out in “CG Watch 2018”. The amendments were issued on January 22, 2020, and include the following key points:

1.When the positions of chairman and CEO (or equivalent positions) of a company are concurrently taken by a same single person, a marital couple or first-degree relatives, the company must explain the reason for the situation, why it is reasonable and necessary, and the measures it has taken in response. The FSC has also amended attachments that a company is required to fill out to show the state of its corporate governance, its adherence to ethical business practices, and any resignation or dismissal of its chief corporate governance officer.

2.To bring about greater transparency in the remuneration of directors, supervisors, and senior executive officers, and to ensure that such remuneration is set in a reasonable manner, a company is required to disclose the remuneration paid to its individual directors and supervisors if: (a) the company has posted after-tax deficits in a parent-company-only financial report or an individual financial report within the three most recent fiscal years; (b) it is a TWSE-listed or TPEx-listed company that has had poor corporate governance evaluation performance; or (c) it is a TWSE-listed or TPEx-listed company where the average salary of non-managerial full-time employees has been relatively low. In addition, a company must also individually disclose the remuneration received by the five most highly compensated executive officers if: (1) it is a TWSE-listed or TPEx-listed company that has posted after-tax deficits in a parent-company-only financial report or an individual financial report within the three most recent fiscal years; or (2) it has had poor corporate governance evaluation performance.

3.To improve the quality of companies’ non-financial disclosures, the FSC, making reference to important international trends, has amended the items related to corporate social responsibility that must be disclosed, including risk assessments and risk management policies or strategies related to environmental, social, and corporate governance issues. Also, in order to strengthen disclosure of information on CPA professional fees, amended provisions will require annual reports to note any audit fee reduction of 10% or more, down from the previous threshold of 15%.