In order to promote the "Corporate Governance 3.0 - Sustainable Development Roadmap" with the recommendations of "CG watch 2020" taken into account, and to comply with international norms and strengthen the transparency of information disclosure in the corporate implementation of sustainable development and cyber security risk management, the Financial Supervisory Commission (FSC) plans to amend the "Regulations Governing Information to be Published in Annual Reports of Public Companies", with the key points of the amendment as follows:
I.    Improve the quality of information disclosure in implementation of sustainable development: In order to strengthen the implementation of sustainable development, encourage companies to pay attention to the information disclosure of environmental, social and governance (ESG) issues and fully implement corporate governance, the relevant matters are listed as follows:
(I)    Strengthen environmental and social information disclosure:
1.    Revise the article contents and schedule title, and amend performance of social responsibility to performance of sustainable development to follow the international development trend and achieve the goal of sustainable development.
2.    Revise the contents of attached schedule and update relevant disclosure guidelines to guide companies to further enhance their quality of ESG information disclosure and provide more comparable information, so as to facilitate more specific, definite and quantitative contents concerning environmental and social issues.
(II)    Information disclosure for strengthening corporate governance:
1.    Functions of the board of directors:
(1)    Stipulate that a company shall specify the diversification policy, specific management objectives and implementation status of its board of directors, as well as the professional qualifications and experience of individual directors and supervisors, to promote the sound development of the composition and structure of the board of directors.
(2)    Revise the attached schedule to delete the indication of whether the independence requirement is met by box-ticking, but require the company to state the proportion of independent directors of the board of directors and explain whether the board of directors meets the independence requirement, so as to strengthen the information disclosure of the independence of the board members; for independent directors, the independence condition shall described.
2.    Functional Committees:
(1)    Clearly specify that the company shall disclose, in other matters to be recorded, the contents of independent directors' suggestions or objections, so as to strengthen the disclosure of audit committee operation.
(2)    Clearly specify that the company shall state the professional qualifications and independence status of the members of the salary and remuneration committee, so as to strengthen the disclosure of information related to committee members. In addition, if a nomination committee is established, its composition and operation shall be disclosed.
3.    CPA’s fees: In order to enhance the independence of accounting firms and auditors, the international trend is referenced to delete the option that the company may choose to adopt the tiered disclosure method of CPA’s fees, and change the disclosure method to individual amount disclosure; the contents of non-audit services are also required to be disclosed.
II.    Strengthen information disclosure of cyber security management:
(I)    As cyber security has become an important issue for corporate operations, it shall be clearly stipulated that companies shall clearly describe information such as the cyber security policy, specific management plan and resources invested in cyber security management, in order to strengthen the management of cyber security.
(II)    At present, although companies may identify and disclose their cyber security risk exposure by themselves, in order to implement corporate cyber security risk disclosure, it shall be clearly stipulated that companies shall disclose their loss suffered, possible impact and countermeasure due to a severe cyber security incident, as well as the impact of cyber security risk on their finance and business, and countermeasure.
III.    Other:
(I)    Improve the timeliness of information disclosure of the annual report for the shareholders' meeting of TWSE/TPEx-listed companies: According to the current regulations, TWSE/TPEx-listed companies shall file their annual reports seven days before their shareholders' meetings. In order to disclose the information of the annual report earlier to facilitate investors' reference for voting on various proposals of the shareholders' meeting, a step-by-step approach is to be adopted to regulate that TWSE/TPEx-listed companies with paid-in capital of more than NT$10 billion, or with a total foreign and mainland capital holding ratio of more than 30% shall file their annual reports 14 days before the shareholders' meetings.
(II)    After considering actual operation, the relevant schedules are to be revised with the text adjusted as appropriate.

The FSC said that, in addition to being published in the official gazette of the Executive Yuan, the general description of the draft and a comparison table of the amended articles will be published on the FSC website. If you have any comments, please visit the webpage “Preview of Law Draft” on the website “Laws and Regulations” of the FSC and state your comments within 30 days from the date of the announcement.

Contact unit:    Section Chief Huang-Chun Tseng, Corporate Finance Division, Securities and Futures Bureau
Tel: (02) 2774-7401
If you have any questions, please write to: FSCMAIL