By Patricia Lee
(Complinet) Taiwan’s Financial Supervisory Commission has stepped up enforcement of its corporate governance regulations by making it mandatory for listed firms and financial institutions to appoint independent directors and set up a remuneration committee. The latest regulations will carry a penalty in the event of any breaches, an FSC official told Complinet, speaking on condition of anonymity.
According to the FSC official, although the requirement to appoint independent directors was not entirely new, the commission’s latest move built on its existing corporate governance regulations. It further expands their reach to cover the entire spectrum of the financial services sector.
Securities investment trust enterprises and integrated securities firms which are not subsidiaries of a financial holding company, exchange- or over-the-counter-listed futures commission merchants, as well as exchange- or OTC-listed non-financial institutions each with a paid-in capital of at least NT$10 billion ($344.7 million), but not exceeding NT$50 billion ($1.7 billion), are the four additional types of firms in the financial sector now covered under the corporate governance regulations.
The FSC official said: “The fact that the corporate governance regulations now cover as many different types of companies within the financial sector including those with a paid-in capital of NT$10billion shows that the FSC is serious about raising the standards of corporate governance of financial institutions in addition to that for listed companies.”
The FSC’s move to make setting up a remuneration committee mandatory for firms listed on the Taiwan Stock Exchange or traded over-the-counter, underscores its commitment to strengthening corporate governance and risk management. According to a recent FSC statement, the new regulation set out requirements governing the composition of the committee, the scope of its powers, rules of procedure, professional qualifications, independence, and the exercise of its powers. “The purpose of the regulations is to ensure a sound remuneration system for companies’ board members, supervisors, and executive officers,” it said.