TWSE gives fresh look to corporate governance evaluations

The Taiwan Stock Exchange (TWSE) has increased the weighting of three criteria in evaluating the corporate governance of companies listed on Taiwan’s stock market.

The TWSE said the exchange has started its evaluation of listed companies’ corporate governance practices in 2016 and will put more emphasis than in the past on whether a listed company uses an electronic voting system at its general meetings so that shareholders who cannot attend can still express their opinions.

Other criteria being given more weight are whether a listed company has voluntarily set up an audit committee and whether it has taken the initiative to compile and issue a corporate social responsibility report.

If a listed company meets the three criteria, it should score higher in the corporate governance evaluation, said the TWSE, which is conducting the evaluating for the fourth straight year. The results are expected to be released by the end of April.

The latest evaluation is based on 99 criteria in five major categories — how a listed company protects shareholder value, and whether it treats its shareholders in a fair manner, strengthens the structure and operations of the board of directors, improves information transparency, and fulfills its social responsibility.

After reviewing previous evaluations, the TWSE decided to revise its criteria and cut their number to 99 from 103 to be able to track a listed company more efficiently and better assess its actual corporate governance practices.

In addition to increasing the weighting of the three particular criteria, the TWSE will also look more closely at whether a listed company has made its board of directors more diverse and reported board policies accurately on its website.

More attention will also be paid to how a listed company issues results in English so that foreign shareholders are on an equal footing, and whether a listed company discloses details on the nomination process of directors and supervisors, the TWSE said.

The exchange has made considerable efforts to improve the corporate governance practices of companies listed in Taiwan and evaluate their progress in recent years.

In October, Taiwan took fourth place in the 2016 Asian corporate governance watch rankings conducted by the Asian Corporate Governance Association, up two notches from the previous rankings released in 2014.

Source: Focus Taiwan News Channel

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