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Corporate governance key to Taiwan's future role as financial hub in Asia


Premier Su Tseng-chang on Thursday directed the Financial Supervisory Commission (FSC) to move forward with the promotion of its Corporate Governance 3.0 plan—a roadmap for the sustainable development of corporate governance in Taiwan—with the goal of building the nation into an Asian corporate financial hub. The premier's instructions came following an FSC briefing on the roadmap at the weekly meeting of the Cabinet.

Taiwan's well-developed corporate governance, high degree of regulatory transparency, robust capital markets, and ability to largely carry on with business as usual from the very beginning of the COVID-19 pandemic have earned recognition both at home and abroad, noted Premier Su. Whereas global stock markets have suffered a general downward trend in reaction to the coronavirus threat, securities markets in Taiwan have been strong. The TAIEX—Taiwan's main trading index—hit a 30-year high in August, while foreign investors hold nearly 42 percent of all listed and over-the-counter shares, also a historical high. Moreover, data released Wednesday showed 11 straight months of growing securities transaction tax revenues. The total collected in the first eight months of 2020 increased by 62 percent year-on-year and likewise set a new 30-year high.

The FSC's corporate governance roadmap proposes five action plans: strengthening the duties and function of boards of directors, increasing the proportion of independent directors, improving information transparency, releasing non-financial information disclosures, and strengthening corporate social responsibility and sustainable operations. Such encouragement of private enterprise to direct capital into environmental and social causes through instruments like green bonds and social bonds is the kind of operational standards foreign investors are looking for. Government agencies should help raise international organizations' confidence in Taiwan's stocks and encourage stronger corporate governance among companies, the premier said.

At a time when the world's economic landscape is shifting and global supply chains are rapidly restructuring, every change should be seized as a new opportunity, Premier Su said. In efforts to improve the investment climate, three government programs to boost investment in Taiwan have registered more than NT$1 trillion dollars (US$33.9 billion) in approved investments, with over NT$620 billion (US$21 billion) expected to be committed to actual projects by the end of the year. Overseas Taiwanese businesses are also anticipated to repatriate NT$210 billion (US$7.1 billion) in funds. President Tsai Ing-wen has declared her intentions of transforming Taiwan into an Asian corporate financial center, which will encourage more multinationals to invest in Taiwan and bring greater capital injections into local industries.

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