The Operation of the Board and The Transfer of Management Power
Date Issued
2015
Date
2015
Author(s)
Hsiao, Yuan-Hua
Abstract
The most critical 10 years of corporate governance development for our country is from the release of The Policy and Action Plan on Strengthen Coporate Governence in 2003 to the release of The Vision of Strengthen Coporate Governence in 2013. During this period,policies on enforcing board independence,creating functional committee,and promoting electronic voting are amount the most important agendas from the competent authority with expectation of the listed （OTC）companies to abide by and implement in order to improve our capital market standard and to protect the interests of investors. But there are loopholes on the mechanisms and regulations,as the result；there are rooms for the board to maneuver in actual practice of these regulations. Again and again,market stockholders have been amazed by such maneuver in particular when there is a dispute on management right that even lead to the deterioration of our country’s corporate governance rankings. The corporate gorvernance and regulation in this country is based on Anglo- American legal system. Since the development and practice of corporate governance in America is very mature, hence, this study on board of directors and its subordinate functional organizations will be focused on compare with the American system and learn from it. Furthermore, numerous case studies will be used for analyzing different correlation factors between operation of board of directors and change of management right. Taking the case study of Kao Hsing Chang Iron&Steel Corp. and Ting Hsin International Group, issues will be eplored are board of directors structure and corporate shareholder information, proxy fight, and shareholder meeting giveway will be looked into. Sanyang Industry is the problem showcase for Chang Hwa Bank (CHB), shareholder information< proxy fight and shareholder meeting giveaway will be looked into. Sanyang Industry is the problem showcase for stock voting rights restrictions; the voting rights of elect and dismiss director of board; and on information transparency. Finally, study CPDC case can provide insight on stock affair management,shareholder meeting agenda changes, shareholders meeting registration process, and the board member nominees qualification riveiw by board of directors. In all, by paying close attention to how above companies challenge regulations, improvement practice and method can be derived and served. The board of director is the core of a company that serves the roles of decision-making and oversight. Yet, in recent years, the occurrences of dispute over the right to mange the company have not been stopped. To eliminate such, reform should start from the quality and quantity of the composition of the board of directors. Asan unbiased organization, the nomination committee should nominate and evaluate if the composition of the board of directorsfulfills diversity, professional, and independent standard. To avoid a board of directors been manipulated by controlling stockholders, and to facilitate the composition and operation of the other functional committee, the proportion of independent directors should be increased. Thought the competent authority and its designated market governing enforcer have gradually set preventive measures to suppress law-circumventing behaviors during a company management right dispute, but more time should be given to cope as the preventive measures have their short comings . Since our country’s legislative process is relatively slow, therefore, one can consider to order the code of practice as part of the contract between the competent authority and company been or to be listed（OTC）. Once these code of practices are part of the contract, then implementation can be realized amount the company been or to be listed or traded over the connter. Regarding to many recommendations from 2011 ACGA Taiwan Company Goverance White Paper address to the competent authority and listed（OTC）company around three major topics which are the stockholders’ meeting and voting, the effectiveness of the board of directors, and the shareholders’ rights, this paper attempts to take a closer look on these recommendations in conjunction with our current status quote to provide the insight of the portion that have been implemented and review the shortcomings so further continuous efforts in response to the those recommendations can be derived.
Subjects
corporate governance
the board
the audit committee
the compensation committee
the nomination committee
proxy statement
electronic voting
the transfer of management power
Type
thesis
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