News eDaily15 Sep 2017

Taiwan:New FSC Chairman emphasises corporate governance

15 Sep 2017

The newly appointed Chairman of the Financial Supervisory Commission (FSC), Mr Wellington Koo, has said that improving corporate governance would be the regulator's primary objective under his watch.

Rules governing the financial sector are to be bolstered and companies will be regulated with a carrot-and-stick approach, Mr Koo said this week at his first news conference since he was appointed as head of the agency on 5 September.

According to a report in Taipei Times, he said that companies with stronger compliance performance will be rewarded with expanded product approval submissions, while those that perform less well would see more stringent controls.

Improving corporate governance would begin with strengthening the role of independent boards of directors, as well as ensuring the veracity of audits and assessments, Mr Koo said, adding that it will take time to flesh out the plans.

“The Commission will not push for further consolidation between public financial holding companies, nor between private and public companies,” Mr Koo also said. The regulator is neutral on consolidation between private financial companies and will strive to create an environment for such deals to take place, he added.

He said that corporate governance is necessary for Taiwan’s banks and listed companies as many firms are still controlled by their founding families. He emphasised that his reforms are aimed at helping major shareholders in regulatory compliance, including members of financial companies’ founding families.

“Through improved governance, companies with a high family ownership stake would no longer be regarded in a negative light,” Mr Koo said.

“In addition to sound underlying fundamentals, the combination of improved regulatory guidelines and compliance by companies can become a powerful force driving growth across Taiwan’s capital markets and industries,” he added.

Mr Koo reiterated that the Commission’s role is to regulate, contain and manage the risks associated with the industry.

More than half of Taiwan’s 15 financial holding firms as well as many major business conglomerates are family-run, raising concerns about their ability to put their fiduciary duties to shareholders ahead of the controlling family’s interests.


 

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