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  • Print publication year: 2013
  • Online publication date: July 2013

4 - Taiwan

from A - Australia and Asia

Summary

General information on corporate governance

Definition of corporate governance

Corporate governance could be defined as how a company is structured to improve its strategic management and supervisory systems. In practical terms, the systems are designed and executed in a manner that protects investors' benefits and other stakeholder interests. The goal of corporate governance is to create an optimal structure that lawfully maximizes the company's value. Corporate governance is achieved through the company's management and supervision mechanisms.

Legal basis of corporate governance

The legal basis of corporate governance in Taiwan is primarily found in the Company Act, the Securities and Exchange Act, and their related rules and regulations. The Company Act has rules to protect present and future shareholders and creditors. The Securities and Exchange Act enhances the disclosure and transparency obligations of listed companies. The Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies includes many standards for listed companies, but compliance is not mandatory.

Capital market acts

Taiwan’s government and corporate managers regard hostile takeovers as detrimental to corporate governance.

The Securities and Exchange Act regulates the duty of disclosure, the duty of compensation (for example, for making changes to the conditions of takeover without authorization, obtaining the target’s share in other situations, making fraudulent statements in the tender offer prospectus), and the requirements for suspending a public tender offer.

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Lin, K.-C., “Fat Cat Provisions,”Taiwan Jurist 81 (2009), 28–29
Lin, K.-C., “Review and Analysis on the Third Amendment of the Company Act in the First Half Year of 2009,”Taiwan Law Journal 137 (2009), 1–8
Tseng, W.-R., “Supervisors v. Audit Committee: Whether Supervisors could Serve as Company Attorney or Legal Counsel,”Cross-Strait Law Review 12 (2006), 75–89
Liu, L.-Y., “The Important Reform on Board and Supervisor in the Public Company: The Amendment of the Securities and Exchange Act on the Independent Directors and Audit Committee – An Introduction and Review,”Taiwan Law Journal 79 (2006), 320
Tseng, W.-R., “Fiduciary Duty in Practice in Taiwan: Relevant Cases Observation,”Cross-Strait Law Review 29 (2010), 145–156
Tseng, W.-R., “The Shareholder's Meeting and Corporate Governance,”NTU Law Journal 39(3) (2010), 109–166