The concept, corporate governance,
has been emerging since the early 1970’s in response to the
perceived lack of effective board oversight that contributed to
the poor performance problems. In 1997 there were numbers of
scandals and corruption within Asian financial markets that led to
severe Asian financial crises. Inadequate corporate governance
system has been concluded the major reason suffering the serious
consequences on the Asian financial crises. The impact arising
from Enron and Corporate America has now put the issue under a
spotlight. Therefore, the attention to enhance corporate
governance is being emphasized hence after. Furthermore, OECD, in
its ministerial meeting as of 1998, also pointed out the lack of
corporate governance has been one of the root causes of the recent
Asian financial crisis.
The Asian financial crises provide
lessons for Taiwan to esteem the importance of corporate
governance. Knowing that inadequate corporate governance is
identified as the key fact that Asian corporations could not build
the competition in world financial markets, Taiwan securities
regulator (Financial Supervisory Commission, or FSC) has tried its
best to emphasize the importance of advocating corporate
governance to public companies since 1998. It believes that
greater transparency as to corporate governance is needed for
enterprises to control risk. Securities and Futures Institute
(SFI), founded as a quasi-public organization for research,
training and protecting investors, together with Taiwan Stock
Exchange (TSE), Taiwan’s computerized over-the-counter market
(known as GreTai Securities Market, GTSM), and Corporate
Governance Association（CGA）, introduce the system of independent
directors, audit committee, etc. They also established and
promoted “Corporate Governance Best-Practice Principles for
TSEC/GTSM Listed Companies” in Taiwan. To strengthen the
legal base in the field of corporate governance, Taiwan amended
Company Law and Securities & Exchange Act. In the future, all said
organizations will be continue to put their efforts in helping
corporations by adopting best practice as infrastructure tools of
corporate governance.
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