The Asian Corporate Governance Association (ACGA) on Dec. 13 released its latest Corporate Governance Watch report, which ranked Taiwan third alongside Singapore among 12 Asia-Pacific markets this year, trailing only Australia and Japan. Taiwan moved up one notch from the previous rankings released in 2020, with its total score rising 0.6 points to 62.8, the nation’s highest.
In what has been the biggest shakeup to the rankings since the association began compiling the reports in 2003, Japan climbed from fifth place in 2020 to second this year, while Hong Kong dropped from second to sixth.
Other markets that gained ground include India, moving up to sixth place alongside Hong Kong, and South Korea climbing one place to eighth. Thailand fell one spot to ninth, while China, the Philippines and Indonesia remained unchanged at the bottom in 10th, 11th and 12th place respectively.
Corporate governance, the standards of conduct and procedures for managing a firm, provides the legal framework for efficient operations and is crucial for companies to raise their competitiveness and maximize shareholder value. Well-designed corporate governance creates a robust environment for companies to flourish and pursue sustainable development.
This year’s report covers seven categories: governance and public governance, regulators, corporate governance rules, listed companies, investors, auditors and audit regulators, and civil society and media.
Taiwan ranked second in three categories — governance and public governance, regulators and auditors and audit regulators. It also showed significant progress in corporate governance rules, which the ACGA attributed to Taiwan in 2021 setting up a new commercial court to handle corporate and securities-related disputes, as well as this year lowering the threshold for reporting substantial shareholding from 10 percent to 5 percent.
The association also praised Taiwan for revising its corporate governance blueprints after the Financial Supervisory Commission (FSC) initiated a corporate governance strategy in 2013, including last year launching the Sustainable Development Road Map for Taiwan Stock Exchange and Taipei Exchange-listed companies and this year’s “action plans.”
However, Taiwan scored relatively low in the investors, and civil society and media categories. In the former, Taiwan collected only 40 points compared with Australia’s 69, while in civil society and media, it scored 62 points to Australia’s 82.
The FSC attributed Taiwan’s low score in the investors category to weak engagement by institutional investors with companies compared with other markets. The commission also said that Taiwan’s lackluster performance in civil society and media showed it had room to improve, such as by promoting the effectiveness of corporate governance or reporting and explaining corporate scandals.
It is not that the local media have not performed their duty to monitor publicly traded companies. On the contrary, many listed companies simply do not interact with the media, with some even declining requests to report on their firms. For instance, journalists were able to attend listed companies’ earnings conferences and interact with executives directly before the COVID-19 pandemic, but that changed as companies shifted to online meetings and decreased their interactions with the media.
If things continue like this, it would be difficult for Taiwan to make gains in that category. After all, firms’ openness in their interactions with the media is as important as their financial transparency with shareholders.
The prospects of making Taiwan a healthy market in terms of corporate governance require not just the efforts of the public sector, but also contributions from the private sector.
Taiwan’s fall would be “a disaster for American interests,” US President Donald Trump’s nominee for undersecretary of defense for policy Elbridge Colby said at his Senate confirmation hearing on Tuesday last week, as he warned of the “dramatic deterioration of military balance” in the western Pacific. The Republic of China (Taiwan) is indeed facing a unique and acute threat from the Chinese Communist Party’s rising military adventurism, which is why Taiwan has been bolstering its defenses. As US Senator Tom Cotton rightly pointed out in the same hearing, “[although] Taiwan’s defense spending is still inadequate ... [it] has been trending upwards
There is nothing the Chinese Nationalist Party (KMT) could do to stop the tsunami-like mass recall campaign. KMT Chairman Eric Chu (朱立倫) reportedly said the party does not exclude the option of conditionally proposing a no-confidence vote against the premier, which the party later denied. Did an “actuary” like Chu finally come around to thinking it should get tough with the ruling party? The KMT says the Democratic Progressive Party (DPP) is leading a minority government with only a 40 percent share of the vote. It has said that the DPP is out of touch with the electorate, has proposed a bloated
In an eloquently written piece published on Sunday, French-Taiwanese education and policy consultant Ninon Godefroy presents an interesting take on the Taiwanese character, as viewed from the eyes of an — at least partial — outsider. She muses that the non-assuming and quiet efficiency of a particularly Taiwanese approach to life and work is behind the global success stories of two very different Taiwanese institutions: Din Tai Fung and Taiwan Semiconductor Manufacturing Co (TSMC). Godefroy said that it is this “humble” approach that endears the nation to visitors, over and above any big ticket attractions that other countries may have
A media report has suggested that Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫) was considering initiating a vote of no confidence in Premier Cho Jung-tai (卓榮泰) in a bid to “bring down the Cabinet.” The KMT has denied that this topic was ever discussed. Why might such a move have even be considered? It would have been absurd if it had seen the light of day — potentially leading to a mass loss of legislative seats for the KMT even without the recall petitions already under way. Today the second phase of the recall movement is to begin — which has