From 2024, all financial firms and listed companies with paid-in capital over $340mn will be required to have at least one-third of their boards made up of independent directors.
Taiwan’s FSC (Financial Supervisory Commission) has announced the release of a new corporate governance and sustainable development roadmap for the capital market.
The roadmap is aimed at deepening corporate governance, enhancing corporate sustainability, creating a sound sustainable development and ESG ecosystem, and strengthening the international competitiveness of the capital market, the FSC said.
The roadmap includes plans to tighten regulations on independent directors beginning in 2024, whereby all financial firms and listed companies with paid-in capital of at least TWD 10 billion (USD 340 million) would be required to have independent directors making up at least one-third of their boards.
Currently, such companies are required to have at least two independent directors, making up at least one-fifth of the board.
Among the 165 firms that would be subject to the new requirements, 66 — including 25 financial firms — already meet the new rules, said Sam Chang, director of the FSC’s Securities and Futures Bureau.
Companies that plan to launch IPOs from 2024 would also be required to have at least one-third of their boards comprising independent directors.
Under the roadmap, financial firms will be required to replace all of their independent directors after they serve more than three terms (nine years). Listed companies will likewise have to name new independent directors if half of them have served more than three terms in office.
The objective is to keep independent directors from compromising their duties if they are in their position for too long, Chang said.
The roadmap also include new requirements for listed companies to reveal details about their board members, including the gender ratio and average age in the boardroom, starting in 2022. This is meant to encourage more diversity within boards.
The roadmap also contains measures to strengthen information disclosure in relation to ESG issues, enhance communications with stakeholders, improve foreign investment due diligence governance.
The FSC is also considering asking poorly performing listed firms to disclose all remunerations for their directors and supervisors by 2022.
Additional reporting from Taipei Times.