Taiwan takes 4th spot in Asia corporate governance rankings

Taiwan took fourth place in corporate governance watch (CGW) rankings in Asia in 2016, up two notches from the previous rankings released in 2014, according to the Taiwan Stock Exchange.

Citing the latest CGW released by the Asian Corporate Governance Association (ACGA), the TWSE said that the total score of Taiwan in the latest rankings stood at 60 points, trailing Singapore (67), Hong Kong (65) and Japan (63).

After Taiwan, Thailand came fifth (58), Malaysia (56), India (55), South Korea (52), China (43), the Philippines (38), and Indonesia (36), the TWSE said.

Among the 11 Asian markets, Taiwan made the most significant progress in terms of total score in the 2016 rankings, rising four points from two years earlier, while the total scores of Singapore, Japan and South Korea rose three points, and India witnessed its total score improving 1 point, the TWSE added.

The TWSE said that Taiwan’s ranking was the highest level in the country’s history, which shows that its efforts in strengthening corporate governance in the equity market have paid off and have been recognized by the ACGA.

The ACGA is an independent, non-profit membership organization set up in Hong Kong in 1999. The organization is dedicated to working with investors, companies and regulators in the implementation of effective corporate governance practices throughout Asia.

In the 2016 rankings, the TWSE said, Taiwan made progress in all of the five factors in the overall assessment — corporate governance rules and practices, law enforcement, political and regulatory environment, International Generally Accepted Accounting Principles (IGAAP), and corporate governance culture.

The TWSE said that the increase in Taiwan’s scores ranged between one and seven points, with progress in the law enforcement and corporate governance rules and practices improving seven and six points, respectively, from two years earlier, the largest rises among the five sub-items.

TWSE Vice President Chien Lih-chung (???) said that the ACGA has been impressed by Taiwan’s push for electronic voting by shareholders, which has boosted corporate governance.

In addition, Chien said, the ACGA has also praised an advocacy by the Taiwanese authorities for listed companies to set up internal auditing committees and to promptly disclose material information in a bid to strengthen transparency, which will protect the interests of investors.

However, the TWSE said that the ACGA mentioned Mega Financial Holding Co. (???), which was fined US$180 million in August when a branch of Mega International Commercial Bank (???) violated New York’s anti-money laundering laws and its complete lack of a compliance structure.

The ACGA also noted Phison Electronics Corp. (??), a Taiwan-based NAND Flash controller supplier, which was suspected of falsifying its financial statements.

Apart from these two examples, the TWSE said, Taiwan has showed its determination to strengthen corporate governance in the past two years so that its ranking in the 2016 CGW improved.

The exchange added that the government and the exchange will continue to push for corporate governance initiatives and attend international and regional meetings for reforms in its equity market and help the local capital market live up to global standards.

Source: Focus Taiwan News Channel