An Empirical Study on Corporate Governance in Taiwan: Focus on Family-owned Business, Independent Director, and Audit Committee
Date Issued
2015
Date
2015
Author(s)
Chao, Yueh-Ling
Abstract
Compared with other countries’, corporate governance in Taiwan has some distinctive features such as its high ownership concentration, high positive correlation between concentration rate and years of operation, and the common phenomenon of CEO duality, etc. Theoretically, all these factors should have an impact on the performance of corporate governance, but the actual situation can only be concluded by empirical study. As shown by the empirical result in this thesis, given that the business is family-owned, the ratio increase of independent directors and the increase of information disclosure do have positive influence on the firm’s operating performance. However, in the case of CEO duality, there is no relation between the ration of independent directors and the firm’s operating performance. In addition, in either case, the audit committee has no significant positive influence on the firm’s performance. The outcome of the above empirical study indicates that the governance regulation in Taiwan still has much room for improvement. Therefore, it is necessary to juxtapose other country’s governance framework to see if there is any experience we could learn from. After deliberately comparing the governance characters of Taiwan with many Asian countries, this thesis concludes that the governance feature in Korea is the most similar. Therefore, this thesis further introduces the regulations of Korea concerning corporate governance and its history of amendment, and emphasizes the differences between the regulation in Taiwan and the rule in Korea. In the end of this thesis, I conclude that it is imperative to amend relevant regulations to relax the minimum shareholding ratio to exercise shareholder’s rights, to modify Article 10-1 of Securities Investor and Futures Trader Protection Act, to enhance the function of independent director, and to increase the independence of auditor and audit committee.
Subjects
corporate governance
econometrics
multiple linear regression model
independent director
family-owned business
information disclosure
audit committee
Type
thesis
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