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New Edition of OECD Corporate Governance Principles Incorporates Sustainability Implications, and Taiwan’s Promotion Direction Consistent with International Standards

The Organization for Economic Cooperation and Development (OECD) held the OECD Asia Roundtable on Corporate Governance in Malaysia from October 11 to 12, 2023, with a focus on promoting the recent key amendments in the new edition of the G20/OECD Principles of Corporate Governance. The chapter “Sustainability and Resilience” was added to the new edition of corporate governance principles, which emphasizes that the sustainable information disclosed by enterprises should have a certain quality and comparability, the board of directors needs to identify risks and opportunities related to sustainability and take responsibility, and enterprises should maintain a dialogue with various stakeholders on sustainability issues. Since 2013, Taiwan has issued three editions of roadmaps based on the OECD corporate governance principles, and since the third edition, sustainable development has been the focus echoing international development trends. In March and August of this year, the “Sustainable Development Action Plans” and the “Roadmap for Taiwan listed companies to align with IFRS Sustainability Disclosure Standards” were respectively released for the country’s continuous commitment to promoting sustainability policies.
During this Roundtable session, discussions were held on the development of corporate governance in the capital markets of various Asian countries and the practical operation of video shareholders’ meetings, focusing on the following:
1.    The objectivity and independence of the board of directors' decisions are one of the key points emphasized by OECD’s corporate governance principles. At this meeting, ASEAN countries shared their mandatory requirements for the number and term of independent directors; for example, most countries require that the number of independent directors be no less than 1/3 of the total number of board members, and the term no more than 9 years. The measures promoted by the FSC to strengthen the independence of the board of directors are similar to the practices of ASEAN countries.
2.    Video shareholders’ meetings have been widely adopted by various countries in the post-pandemic era, and the OECD launched best practices for the convening of video shareholders’ meetings (including before, during and after meetings). The FSC has referred to the best practices proposed by the OECD above and formulated relevant domestic regulations and operational norms, such as ensuring the rights of shareholders to attend video shareholders’ meetings and raise questions and vote online, providing appropriate alternative measures for shareholders with a digital gap, and requiring platform operators to possess relevant professional skills. In the future, regulations for video shareholders’ meetings will be continuously refined with the rights and interests of small and disadvantaged users taken into account, in order to ensure that the rights of all shareholders are equally protected.
On October 11, 2023, the OECD released a report on the sustainability policies and practices of Asian countries. Taiwan stands out in the proportion of sustainability information disclosure, greenhouse gas emissions disclosure, and assurance obtained by TWSE and TPEx listed companies, showing the effectiveness of the FSC’s promotion of sustainable development policies in recent years. The FSC will continue paying attention to the latest international trends, take into account the domestic practical development, and refine Taiwan’s corporate governance and sustainable development policies, in order to enhance the competitiveness of Taiwan’s capital market.
Visitor: 182   Update: 2024-02-27